financial leave accounting george gomez 03/26/2014

Financial Leave AccountingGeorge Gomez

03/26/2014

FINANCIAL LEAVE ACCOUNTING

Overview Background VACLAC Vacation Accrual Vacation Usage Operating Ledger Transferring Funds (PETs) Additional Considerations


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


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


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


VACLAC


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


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 LiabilityAccount


LEDGER ACTIVITYSALARY ACCOUNT

SUB ACCOUNT 0,1 or 2

Budget FinancialTransactions Transactions

BENEFIT ACCOUNTSUB ACCOUNT 6 (668930)


Salary Amount Reallocated toSub 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 Accrualand Benefits) Assessed Against SubAccount 6 and Credited to the VacationLiability Account (Pool).

DOC – PAS90XXX – LEAVE ACTIVITY

VACATION ACCRUAL


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


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



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.



SUB ACCOUNT 0,1 or 2(601850, 611850, 621850)




VACATION USAGE

Usage Pay Amount is Credited Back to theDepartment Salary Sub Account (0,1, or 2)

DOC – PAS90XXX LEAVE USAGE

- 1,895.74

- 356.19

-1,895.74

-359.19












5,009.16

1,091.81


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.


VACATION ACCRUAL VACATION USAGE

6,100.97

+ 6,100.97 -1,895.74

-356.19

-1,895.74

-356.19


Ledger Activity Budget and Financial Transactions Totals for Applicable Sub

• Sub 0- Academic• Sub 1- Staff• Sub 2- General Assistance


From the VACLAC to the Operating Ledger

Acct. 668930

Acct. 601850

Acct. 611850

Acct. 621850


Sub 1 Usage Pay

Sub 1 Usage Benefits

Sub 0 Accrual Pay

Sub 2 Accrual PaySub 1 Accrual Pay

Sub 0 Accrual Pay Sub 1 Accrual PaySub 2 Accrual Pay

Sub 1 Usage Pay


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


Transferring Funds with PETs Vacation usage can only be moved in timekeeping

within a 12 month period.


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


Vacation Accrual and Usage Accounting Policy

http://adminrecords.ucsd.edu/PPM/docs/395-9.pdf


Questions?


Thank You

George Gomez Payroll 858-534-3245 [email protected]

financial leave accounting george gomez 03/26/2014

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