This checklist provides an overview of the end of year payroll accrual process used to post payroll expenses for employees that work in one fiscal year but do not get paid until the next fiscal year. 1
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The district will need to decide which pieces of the accrual system it should use to best meet its needs. Note: In prior years, it was necessary to use the monthly accrual process to ensure all payroll expenses were posted to the books by the end of June for grants ending in June. However, since most grants no longer end in June, there may no longer be a need for the district to accrual monthly which requires additional work for the district. 3
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In Human Resources, go to the Reports > HR Reports > Year To Date Reports page and run the HRS3050 School Year to Date Report. Print the report for both 2017 and 2018. Once the report is displayed, verify that the Accrued Pay balance is $0 for each employee for 2017. If accruals exist for 2017, those amounts will need to be corrected prior to this process by using the Zero School YTD Accruals utility. If the district chooses to accrue employees who receive their first check in August (11 and/or 13 month employees), the accrual totals for August should display on the 2018 report. 13 month employees are new employees to the district who have elected the option to receive a check from August 2017 to August 2018 if allowable by the district. 12 month employees do not need to be accrued since they work each month as they are paid. 6
In Finance, go to the Inquiry > General Ledger Inquiry > General Ledger Account Summary page. Verify that all accrual amounts are cleared for 216X and 221X accounts, or that they represent just 11 and/or 13 month employees who receive their first check in August. The totals in Finance should match the School Year To Date totals in HR. If accruals exist in Finance but not on the School YTD report, those amounts will need to be corrected prior to this process by creating a Journal Entry. 7
Go to Next Year > Copy CYR Tables to NYR > Clear Next Year Tables page to clear any previous accrual calculation performed for the previous year. 1. Select Clear EOY Accrual Data Only. Do not use the arrows to move tables to the right. Doing so will clear all of next year payroll. 2. Click Execute. 8
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Go to the Tables > Tax/Deductions > TRS Rates to input rates for the 2018 year. 1. Enter 2018 in the School Year field. 2. Click Retrieve. 3. Input the new rates. Be sure the 2018 rates are being updated and NOT the 2017 rates. 4. Once the rates have been entered, click Save. 10
In Human Resources, go to Reports > User Created Reports > HR Report page to verify the accrual data for each employee is setup correctly. Build a user created report to verify employee information. Select the following fields to be included on the report: Employee Number First Name Last Name Termination Date Pay Status Job Code Job Description Pay Type Contract Begin Date Contract End Date Payoff Date Nbr Days Employed Contract Total 11
Contract Balance Daily Rate Accrual Code Accrual Rate TRS Year Fund TRS Grant Cd 11
Open the report as a CSV report or in Excel. Sort by Pay Status and then by Fund: Verify all Active and Inactive employees. Be sure inactive employees have a Termination Date. Verify federal funds have a grant code. Filter by Pay Status to exclude Pay Status 2 (inactive) and sort by Accrual Code: Verify everyone who needs to be accrued has an Accrual Code and Accrual Rate if the district is going to accrue monthly. If the district is NOT going to accrue monthly, employees should NOT have an accrual code. Generally, 12 month employees and hourly employees do not accrue and therefore should not have an accrual code. Verify the Daily Rate matches the Accrual Rate. 12
Verify the Contract Begin Date, Contract End Date, Payoff Date, and # of Days Empld. Verify the TRS Year is N for employees paid from September to August and verify it is a Y for nonstandard employees. Verify the Contract Total, Contract Balance, and Job Codes. 12
In Human Resources, go to Reports > HR Reports > Payroll Information Reports and run HRS6050 Contract Balance Variance Report. This report compares the Computed Balance (Pay Rate X Remaining Payments) to the Actual Balance. If a variance exists, the employee may be underpaid or overpaid during the year. Enter A to sort alphabetically. Enter an acceptable difference. Assuming the district has 12 monthly payrolls, $.11 has been entered as the acceptable difference. Any more than that could be divided into the 12 monthly payments. This report is designed for Pay Type 1, contracted and Pay Type 2, non contracted employees who have an annualized salary so the report can be run for each Pay Type separately or for all employees at once. Disregard variances for Pay Type 3, hourly employees and Pay Type 4, substitutes. Resolve variances under HR > Maintenance > Staff Job/Pay Data > Job Info Tab. 13
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Go to the Payroll Processing > EOY Payroll Accruals > Accrual Table page to populate the Accrual Table with the number of days or hours to be accrued. 1. Under Table Type, select Hourly for pay type 3 and 4 employees. Select Daily for pay type 1 and 2 employees. 2. Click Populate Table. 16
When the Populate Table button is selected, a pop up box will display with the available Contract Begin Dates from Next Year Payroll. 1. Enter the Estimated Days worked for EOY Accruals for the Start Dates to be included in EOY accrual calculations. If populating the hourly table, enter hours rather than days. 2. Click Execute. 3. Once you receive a message that the Process completed successfully, click Cancel. 17
After you have clicked Cancel, the accrual table will be populated. 1. Review the table for accuracy. Delete or Add information as needed. 2. Click Save. 18
Go to the Payroll Processing > EOY Payroll Accruals > Decrement page to select the funds that should not be decremented during this process. Employee distributions currently have been incremented to the upcoming fiscal year (8) in next year payroll. To post to the 2016 2017 August books where accounts are primarily fiscal year 7, TxEIS will automatically decrement all distributions. This tab is used to select funds that should not be decremented to a 7 but rather should post as a 8 in the August books. Do NOT select local funds. Grant funds should be considered individually to determine which funds open for expenditures prior to September 1. When grant funds that pay salaries are chosen on this page, they keep the fiscal year in next year payroll and are not automatically decremented. Click Funds/Yr List button to select the funds to be posted to a year 8 account in the 2016 2017 August books. 19
When the Funds/Yr List button is selected, a pop up box will display with the funds available to exclude from the decrement process. 1. Select the Funds to be excluded from decrementing. Fund 211 and 225 are used as examples only. Each district will need to determine which funds if any, need to be selected. 2. Click OK. 20
Once you click OK, the decrement table will be populated. 1. Review the table for accuracy. Delete and/or Add funds as needed. 2. Click Save. 3. Click Print and/or save in the Accrual Reports subfolder created in step 1. 21
Go to the Payroll Processing > EOY Payroll Accruals > Run Calculations page to run calculations. The Run Calculations tab uses the employee's pay information and the estimated hours or estimated days in the accrual table to calculate the pay for each employee that is to be expensed in current year but paid in the next school year. First, the system computes the salary by taking either the next year accrual daily rate or the hourly rate, depending on the person's pay type, and multiplying it by either the number of days or the number of hours worked as set up in the accrual table. Next, the Year To Date amounts for associated benefits, such as FICA and TRS are calculated by multiplying the pay by the appropriate percentages. 1. Enter the Calculation Date as 08 31 2017. 2. Select the Exclude Non Standard Employees box. These are 11, 12, and 13 month contracts that receive their first pay check of the new school year before September. They should have the TRS Year box checked on the Maintenance > Staff/Job Pay Data page. 3. Select the Exclude Substitutes box. 22
4. Use the arrows to select the employees. 5. Click Run. 22
Once calculations have been run, a report will display. 1. Review all messages and make corrections as needed. Employees on this list will NOT be included in the EOY Accrual calculations. NOTE: If any corrections are made on the employee records, you must return to the EOY Accrual Table (Step 2) and repeat from there. 2. Click Close. 23
Go to the Payroll Processing > EOY Payroll Accruals > Accrual Reports page to review each report and verify employee data for EOY accrual calculations. 1. Click Select ALL Reports 2. Click Generate Reports. 3. Save reports in the Accrual Reports subfolder created in step 1 as needed. 24
Go to the Payroll Processing > EOY Payroll Accruals > Create General Journal page to create the General Journal. Once reports have been verified, the general journal can be created to interface amounts to Finance. 1. Select the File ID that represents the 2016 2017 school year. 2. Enter the JV Number: EOYACC which stands for End of Year Accrual. 3. Select the Calculation. 4. Click Execute. 25
After selecting Execute, a report will display. 1. Review the EOY Accrual General Journal Transactions report by comparing the amounts for each fund with those displayed on the EOY Accrual Distribution report from Step 5. 2. Save in the Accrual Reports subfolder created in step 1. 3. Click Save as Pending. NOTE: If any corrections need to be made follow the steps below: a. Go to the Interface to Finance tab (Step 6) and click Delete Pending. b. Change to current year payroll to repeat Step C Clear EOY Accrual Data. c. Change to next year payroll and make changes as needed. d. Repeat EOY Accrual Table Step 2. 26
Go to the Payroll Processing > EOY Payroll Accruals > Interface to Finance page to interface the calculations to Finance. 1. Under Next Year Frequency select the August accounting period. 2. In the Interface Transaction Date field, enter 08 31 2017. 3. Select the calculation. 4. Click Preview Report. 27
After the Preview Report button is selected, a report will display. 1. Review the EOY Accrual General Journal Transactions report and verify everything is correct. 2. Save in the Accrual Reports subfolder created in step 1. 3. Select Emp Report to toggle to the employee report. 28
1. Review the EOY Accrual Information report and verify everything is correct. 2. Save in the Accrual Reports subfolder (refer to EOY Payroll Accruals Process Step 1). 3. Click Interface. 4. Make a backup when prompted and save in the Interface to Finance Backup subfolder created in step 1. 29
After clicking Interface, in Finance go to Inquiry > General Ledger Inquiry > General Ledger Inquiry page to verify the accrual amounts have been posted. Save in the Accrual Reports subfolder created in step 1. The balances should reflect the EOY accruals (and August payroll accruals if the district accrues 11 and/or 13 month employees. 30
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This chart shows how expenditures will be posted under each scenario and why the reversal is necessary. The yellow represents the old fiscal year, and the blue represents the new fiscal year. No Accrual If the district does not accrue salaries, the employee s pay is expensed as paid, evenly over 12 months. EOY & Monthly If the district uses both the end of year accrual and the monthly accrual system, the EOY expense will post in August and then as EARNED (not paid) throughout the new year. EOY Only Without Reversal If the district uses only the EOY accrual system and does not post the reversal, the employee will be overexpensed by the amount of the August EOY accrual because the full salary will be expensed in the new year as paid. EOY With Reversal If the district uses the EOY accrual system, it will need to post the reversal to the new year. The EOY accrual and reversal is a way to move a portion of the expense out of the new year into the old year. 32
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