financial leave accounting - university of california, … leave...vacation liability account...
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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 1st 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
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)
6,438.85 / 174 = 37.00
37.00 X 12.92 = 478.04
Benefits = Accrued Pay X Benefits Code
BC 04 = 22.89%
478.04 X .2289 = 109.42
Net to Sub 6 Financial Cost =
Totals
(Pay + Benefits + Used Benefits)
Sub Account 1 ~ Net to Sub 6
5,009.16 + 1,091.81 + (-356.19) = 5,744.78
Accrual Only
Vacation Liability
Account
FINANCIAL LEAVE ACCOUNTING
LEDGER ACTIVITYSALARY ACCOUNT
SUB ACCOUNT 0,1 or 2
Budget Financial
Transactions Transactions
BENEFIT ACCOUNT
SUB ACCOUNT 6 (668930)
Budget Financial
Transactions Transactions
6,100.97
Salary Amount Reallocated to
Sub Account 6
DOC – PAS91XXX LEAVE ACCRUAL
6,100.971,091.81
5,009.16
+ 6,100.97(5,009.16 + 1,091.81)
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 OnlyUsage Pay = Rate X Hours
(Hours/Monthly Working Hrs)
16/176 = 0.0909
11,641.39 X 0.0909 = 1,058.20
_________________________
Benefits = Pay X Benefits Code
BC 12 = 16.96%
1,058.20 X .1696 = 179.47
_________________________
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 ACTIVITYSALARY ACCOUNT
SUB ACCOUNT 0,1 or 2
(601850, 611850, 621850)
Budget Financial
Transactions Transactions
BENEFIT ACCOUNT
SUB ACCOUNT 6 (668930)
Budget Financial
Transactions Transactions
VACATION USAGE
Usage Pay Amount is Credited Back to the
Department Salary Sub Account (0,1, or 2)
DOC – PAS90XXX LEAVE USAGE
- 1,895.74
- 356.19
-1,895.74
-359.19
LEDGER ACTIVITYSALARY ACCOUNT
SUB ACCOUNT 0,1 or 2
Budget Financial
Transactions Transactions
BENEFIT ACCOUNT
SUB ACCOUNT 6 (668930)
Budget Financial
Transactions Transactions
LEDGER ACTIVITYSALARY ACCOUNT
SUB ACCOUNT 0,1 or 2
Budget Financial
Transactions Transactions
BENEFIT ACCOUNT
SUB ACCOUNT 6 (668930)
Budget Financial
Transactions Transactions
FINANCIAL LEAVE ACCOUNTING
6,100.97
5,009.16
1,091.81
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
6,100.97
+ 6,100.97 -1,895.74
-356.19
-1,895.74
-356.19
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. 668930
Acct. 601850
Acct. 611850
Acct. 621850
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
http://adminrecords.ucsd.edu/PPM/docs/395-9.pdf
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