Financial Leave Accounting George Gomez 03/26/2014

FINANCIAL LEAVE ACCOUNTING Overview  Background  VACLAC  Vacation Accrual  Vacation Usage  Operating Ledger  Transferring Funds (PETs)  Additional Considerations

FINANCIAL LEAVE ACCOUNTING Background  Implemented over 30 years ago  Relieves the need to monitor vacation reserves within various funding sources  Eliminates cumbersome financial transfers to, from or between funds  Eliminates financial hardship to departments when employees terminate with large vacation balances

FINANCIAL LEAVE ACCOUNTING How does it work?  Leave code rate from 1 st lowest Appt. in PPS  Utilizes Vacation Pool Concept  Departments assessed for vacation monthly  Vacation is reimbursed when taken  Restricted Funds, Title Codes are not assessed

FINANCIAL LEAVE ACCOUNTING VACLAC  Found in FinancialLink – Reports - Payroll Reports  Shows Accruals and Usage  Identifies amounts to Ledger

FINANCIAL LEAVE ACCOUNTING

VACLAC

FINANCIAL LEAVE ACCOUNTING Calculating Vacation Accrual  Monthly Employees: Divide monthly salary rate by 174 (average monthly hours) and multiply result by hours earned for Accrued Pay  Biweekly Employees: Use hourly rate and multiply by hours earned for Accrued Pay  Multiply Accrued Pay by Benefits Code rate for Accrued Benefits

FINANCIAL LEAVE ACCOUNTING Accrued Pay = Rate X Hours (Monthly Rate / 174) 6, / 174 = X = Benefits = Accrued Pay X Benefits Code BC 04 = 22.89% X.2289 = Net to Sub 6 Financial Cost = Totals (Pay + Benefits + Used Benefits) Sub Account 1 ~ Net to Sub 6 5, , ( ) = 5, Accrual Only

Vacation Liability Account FINANCIAL LEAVE ACCOUNTING LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 Budget Financial Transactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions Salary Amount Reallocated to Sub Account 6 DOC – PAS91XXX LEAVE ACCRUAL 6, , , , (5, ,091.81) Entire Amount (Cost of Salary Accrual and Benefits) Assessed Against Sub Account 6 and Credited to the Vacation Liability Account (Pool). DOC – PAS90XXX – LEAVE ACTIVITY VACATION ACCRUAL

FINANCIAL LEAVE ACCOUNTING Calculating Vacation Usage  Use actual hours when vacation was taken  Monthly Employees: Divide hours used by actual hours in the pay cycle, multiply result by monthly salary rate for Used Pay  Biweekly Employees: Multiply hours used by hourly rate for Used Pay  Multiply Used Pay by Benefits Code rate for Used Benefits

FINANCIAL LEAVE ACCOUNTING Usage Only Usage Pay = Rate X Hours (Hours/Monthly Working Hrs) 16/176 = , X = 1, _________________________ Benefits = Pay X Benefits Code BC 12 = 16.96% 1, X.1696 = _________________________ Net to Salary Sub = Pay Total Sub 1 = 1,895.74

FINANCIAL LEAVE ACCOUNTING Vacation Liability Account Pay Usage is Credited Back to Department (Benefit Portion Credited to Benefits Sub 6) The Credit or Debit to Sub 6 Depends on the Net Value of Usage Credit and Accrual Debit. DOC – PAS90XXX – LEAVE ACTIVITY LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 (601850, , ) Budget Financial Transactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions VACATION USAGE Usage Pay Amount is Credited Back to the Department Salary Sub Account (0,1, or 2) DOC – PAS90XXX LEAVE USAGE - 1, ,

LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 Budget Financial Transactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 Budget Financial Transactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions FINANCIAL LEAVE ACCOUNTING 5, , Vacation Liability Account Usage Pay Amount is Credited Back to the Department Salary Sub Account (0,1, or 2) DOC – PAS90XXX LEAVE USAGE Salary Amount Reallocated to Sub Account 6 DOC – PAS91XXX LEAVE ACCRUAL If Accrual Cost is Greater Than Usage Reimbursement, Then Net to Sub 6 is a Debit. If Usage Reimbursement is Greater Than Accrual Cost, Then Net to Sub 6 is a Credit. DOC – PAS90XXX – LEAVE ACTIVITY VACATION ACCRUAL VACATION USAGE 6, , , ,

FINANCIAL LEAVE ACCOUNTING Ledger Activity  Budget and Financial Transactions  Totals for Applicable Sub Sub 0- Academic Sub 1- Staff Sub 2- General Assistance

FINANCIAL LEAVE ACCOUNTING From the VACLAC to the Operating Ledger Acct Acct Acct Acct

FINANCIAL LEAVE ACCOUNTING Sub 1 Usage Pay Sub 1 Usage Benefits Sub 0 Accrual Pay Sub 2 Accrual Pay Sub 1 Accrual Pay Sub 0 Accrual Pay Sub 1 Accrual Pay Sub 2 Accrual Pay Sub 1 Usage Pay

FINANCIAL LEAVE ACCOUNTING Fund Sources  Contract & Grants Budgetary Reallocation  General Funds Funding pre-determined based on FTE Usage Reimbursement drawn-off Accrual charges are automatically funded Termination payments cannot be projected, so reimbursements are journalized by Payroll quarterly

FINANCIAL LEAVE ACCOUNTING Transferring Funds with PETs  Vacation usage can only be moved in timekeeping within a 12 month period.

FINANCIAL LEAVE ACCOUNTING Additional Considerations  Employee Leave Code in PPS  Employee must be below maximum accrual  Timekeeping adjustment cannot exceed 12 months Retroactive adjustment  Terminal Vacation uses Benefit Code 31

FINANCIAL LEAVE ACCOUNTING Vacation Accrual and Usage Accounting Policy

FINANCIAL LEAVE ACCOUNTING Questions?

FINANCIAL LEAVE ACCOUNTING Thank You George Gomez Payroll