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Financial Leave Accounting George Gomez 03/26/2014

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

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Financial Leave Accounting George Gomez 03/26/2014

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  1. Financial Leave Accounting George Gomez 03/26/2014

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

  3. 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

  4. 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

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

  6. FINANCIAL LEAVE ACCOUNTING

  7. FINANCIAL LEAVE ACCOUNTING

  8. FINANCIAL LEAVE ACCOUNTING VACLAC

  9. 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

  10. FINANCIAL LEAVE ACCOUNTING Accrual Only 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

  11. FINANCIAL LEAVE ACCOUNTING VACATION ACCRUAL Vacation Liability Account LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 Budget Financial TransactionsTransactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions Transactions + 6,100.97 (5,009.16 + 1,091.81) Salary Amount Reallocated to Sub Account 6 DOC – PAS91XXX LEAVE ACCRUAL 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 5,009.16 6,100.97 1,091.81

  12. 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

  13. FINANCIAL LEAVE ACCOUNTING Usage 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 Usage Only

  14. FINANCIAL LEAVE ACCOUNTING Vacation Liability Account VACATION USAGE LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 (601850, 611850, 621850) Budget Financial TransactionsTransactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions Transactions - 1,895.74 -1,895.74 Usage Pay Amount is Credited Back to the Department Salary Sub Account (0,1, or 2) DOC – PAS90XXX LEAVE USAGE - 356.19 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 -359.19

  15. FINANCIAL LEAVE ACCOUNTING VACATION ACCRUAL VACATION USAGE Vacation Liability Account LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 Budget Financial TransactionsTransactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions Transactions LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 Budget Financial TransactionsTransactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions Transactions + 6,100.97 -1,895.74 -1,895.74 -356.19 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 -356.19 5,009.16 6,100.97 1,091.81

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

  17. FINANCIAL LEAVE ACCOUNTING From the VACLAC to the Operating Ledger Acct. 601850 Acct. 611850 Acct. 621850 Acct. 668930

  18. FINANCIAL LEAVE ACCOUNTING Sub 1 Usage Pay 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

  19. 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

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

  21. 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

  22. FINANCIAL LEAVE ACCOUNTING Vacation Accrual and Usage Accounting Policy http://adminrecords.ucsd.edu/PPM/docs/395-9.pdf

  23. FINANCIAL LEAVE ACCOUNTING Questions?

  24. FINANCIAL LEAVE ACCOUNTING Thank You George Gomez Payroll 858-534-3245 ggomez@ucsd.edu

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