Financial Leave Accounting - University of California, … leave...Vacation Liability Account...

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 Liability

Account


LEDGER ACTIVITYSALARY ACCOUNT

SUB ACCOUNT 0,1 or 2

Budget Financial

Transactions Transactions

BENEFIT ACCOUNT

SUB ACCOUNT 6 (668930)

Budget Financial


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


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


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.




(601850, 611850, 621850)

Budget Financial


BENEFIT ACCOUNT


Budget Financial


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



Budget Financial


BENEFIT ACCOUNT


Budget Financial




Budget Financial


BENEFIT ACCOUNT


Budget Financial



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.


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 Pay

Sub 1 Accrual Pay

Sub 0 Accrual Pay

Sub 1 Accrual Pay

Sub 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 - University of California, … leave...Vacation Liability Account...

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