Determine the Labor and Payroll Process

Terminal Learning Objective Action: Determine the Labor and Payroll Process Conditions: You are a GFEBS user with access to a computer, the GFEBS training database, applicable GFEBS references, and awareness of Operational Environment (OE) variables and actors Standards: With a minimum of 80% accuracy, learners must demonstrate proficiency to: Identify labor cost and payroll activities Capture labor cost through time-tracking Communicate Labor and Payroll Reporting Functions

Capturing Payroll Cost To account for financial impact of labor costs and pay/expenses Payroll costs include salary, benefits (health insurance, workman’s compensation insurance, matching retirement contributions by employer), awards/bonuses, and deductions (payroll taxes, social security, allotments) Defense Civilian Payroll System (DCPS) – System used to capture civilian payroll details

Capturing Payroll Cost (Cont.) Payroll files are received automatically through an interface or entered manually in GFEBS GFEBS posts actual payroll commitments, obligations, expenses, and disbursements ECC sends detailed payroll records to Business Intelligence (BI) Received Automatically thru an Interface Entered Manually in GFEBS

Full Costs The entire cost of goods/services received, whether or not the items were paid for/funded by the receiver FFMIA and the Statement of Federal Financial Accounting Standards 4: Managerial Cost Accounting Standards and Concepts (SFFAS 4) Require Army to record full costs of payroll and labor Require reporting of full costs against benefitting cost objects

Federal Guidelines on Costing DOD Financial Management Regulation (DOD FMR) Defense Finance and Accounting Service (DFAS) Blue Book: A guide to Federal Requirements for Financial Management Systems

GFEBS Payroll Interfaces Two payroll entitlement systems that Interface with GFEBS: Defense Civilian Payroll System (DCPS) Army Time and Attendance Production System (ATAAPS) Other associated Interface systems: Italian Local National Payroll System (ILNPS) Korean National Payroll System (KNPS) US Army Europe (USAREUR) Local National Pay System Interface (ULNAPSI)

Budget-Relevant Cost Payroll or labor costs that affect budget and available funds Budget-relevant activities include: Actual payroll expenses – civilian and foreign/local national Reimbursable or direct charge labor transactions Actual payroll expenses – military

Non-Budget Relevant Payroll or Labor Cost Do not affect budget or available funds, and are visible only via secondary cost elements Non-budget relevant activities include: Labor cost allocations within the same fund, FA and funded program Labor cost allocations of military time tracking hours

Standard Rates / Rate Formula Standard Rates: Based on estimated or budgeted costs; used to assign costs to cost objects Standard Rate Formula: Total value of costs planned for an activity type divided by planned output quantity of the activity type Maintenance Cost Center Rate of Activity Type = $37.50 The Number of Hours Worked = 10 $375.00 $375.00 Sender Credited $375.00 Receiver Debited $375.00 The Standard Rate charged is $37.50 per hour worked

Detailed Transactions in BI Conform to policies: Office of Personnel Management (OPM) requirements for personnel reporting Meet Office of Management and Budget (OMB) payroll reporting requirements Enable Analysis: Labor costs for full time equivalents (FTEs) Labor rates and variances Labor and payroll costs for budget and cost planning Labor costs and payroll expenditure details at individual worker-level

LSA #1 Check on Learning Q1: How is labor cost calculated? A1: Q2: Describe a time tracking system? A2: Q3: Payroll file is either received_____through an interface or entered ______ in GFEBS? A3:  

LSA #1 Summary

Capture Labor Cost Through Time Tracking

Related Key Terms Standard Rates - Total value of costs planned for an activity type divided by the planned output quantity of the activity type (Planned Input $ / Planned Output Qty) Labor Costs – Work hours multiplied by the Standard Rate for the activity type and cost center for civilian employees, contractors, or military personnel. Labor costs reflect the planned or actual work on various tasks, activities, service, or projects. Funded Costs - Value of goods or services received based on obligation of funds by the organization performing the work funded in the organization’s AFP Unfunded Costs - Costs that are financed by another organization or activity's appropriations, which do not result in any obligation of funds by the organization performing the work (e.g., depreciation, military labor and workmen's compensation payments).

Key Terms (Cont.) Time Tracking - Process or system of recording hours worked against one or more cost objects. Productive hours are recorded against the benefiting cost object for the task, activity, or project where the work was performed. Non-productive hours (e.g., leave taken, administrative meetings) are recorded against the overhead cost center or cost object. Payroll - Costs of employees for a stated period, which includes salary/wages, bonuses, severance pay, benefits, and other compensation paid to employees, as well as, withholdings, collections, taxes, employer contributions and other deductions paid to other organizations. Activity Type - Categorizes a production or service output provided by one cost center for another for use in internal activity allocations. Activities are assigned rates to be used during activity allocation

Refer to VG# 6 & 7 Key Terms (cont’d) Automated Time, Attendance, and Production System (ATAAPS) - provides an automated, single-source input for reporting and collecting civilian employee time and attendance (T&A) and labor data; interfaced with GFEBS and Defense Civilian Pay System (DCPS) Budget Relevant Labor Allocations - Labor costs allocated to direct charge and reimbursable orders that consume available budget and funds Cost Plan – Estimate costs to provide products/ services; anticipates outcomes from those costs to calculate the cost per output or service Tracking - Process or system of recording hours worked against one or more cost objects

Key Terms (Cont.) Reimbursable – Contractual relationship between two organizations under which the performing activity provides a product or service to the requesting activity, the costs of which are reimbursed. Receiver Cost Objects - Activities, tasks, and/or projects where an employee works (internal orders, WBS) Sender Cost Center - Organizational cost centers to which employees are assigned

How GFEBS Captures and Allocates Labor Costs Roles / Responsibilities: Payroll Interface Processing Monitor Cost ECC Display and Reporter

Capture Labor Cost Labor costs are calculated based on the hours reported in a time-tracking system multiplied by the planned standard rate for that employee. Time-tracking requires individuals to track their time against Cost Objects (e.g., where they perform their work) GFEBS allocates the cost of an individual’s hours to the appropriate Cost Objects by multiplying the individual’s hours by a standard activity type rate. Time tracking file is either received automatically through an interface or entered manually in GFEBS. Two systems used to capture Labor Costs are: ATAAPS and DCPS

Inbound Time-Tracking Data from System Interfaces Used by Army organizations using the Work Mapping Tool (WMT) and ATAAPS to track labor hours Upon receiving the info from the interface, GFEBS allows allocation costs of labor hours to the appropriate cost objects (i.e., CC, IO or WBS Element) Hours provided on the inbound file that have been assigned for a specific pay period to a sender cost center, sender fund, sender functional area, sender activity type, receiver cost object, receiver fund, receiver functional area and action code are summed together

Inbound Time-Tracking Data from System Interfaces (Cont.) Labor hours multiplied by standard activity type rates calculate labor costs and perform direct activity allocation on a bi-weekly basis to pass relevant costs from the sender cost center to the appropriate cost object After the inbound WMT or ATAAPS interface is run, GFEBS users check their business workplace for emails regarding file-level errors If no email in workplace inbox, the file processed successfully.

Inbound Time-Tracking Data from System Interfaces (Cont.) - If emails are received, the user notifies WMT or ATAAPS of the specific kind of file-level error that occurred: Data missing in header record Duplicate file check (file already processed) Mismatch on record count/file count File sequence not in order with last file processed (ATAPPS only) - After error resolution, cost allocation documents are created for all valid posting. Records that do not generate valid postings fall to the time-tracking error extension

Mid-Point Check on Learning Q: This term reflects the planned or actual work on various tasks, activities, service, or projects. A: Q: T/F: The Cost Plan process is the system of recording hours worked against one or more cost objects Q. A reimbursable is a contractual relationship between _____ organizations. A.

Examine Time-Tracking Errors An allocation will not take place for the following reasons:  Insufficient funds on the receiver cost object for a budget relevant direct activity allocation Missing or invalid master data on the time tracking file (Fund, FA, Cost Center, or Activity Type) Derivation rules for the funding or associated cost element were not properly established Errors are written to an error log and the interface continues processing subsequent records  

Job Order Numbers (JON) and Work Centers in ATAAPS Associated with a work center Represent an organizational element in ATAPPS and are the key link between an employee and job orders Cost centers sent to ATAAPS populate the Job Order Number field The cost center in the work center field is identical to the Cost Center value in the Job Order Number field GFEBS Cost Objects require a description field to help identify the object for those entering time

Manual Time Tracking GFEBS Manual Spreadsheet Manual Spreadsheet Summarized Direct Activity Allocation of labor hours to the appropriate cost objects where the work was performed Manual Spreadsheet GFEBS Cost Object Home Cost Center Labor Files Unique File Name UIC Work Date/Pay Period Inbound Interface Hours x Standard Rate Cost Object Cost Object

Direct Activity Allocation Cost Object GFEBS Home Cost Center Cost Object Hours X Standard Rate Cost Object GFEBS uses the hours on the inbound file, and performs Direct Activity Allocations on a daily basis. GFEBS then passes costs from the home cost center to the appropriate cost object where the hours were documented in the applicable time-tracking system.

Budget Relevancy A transaction is budget relevant if the sender side of a transaction involving Fund, Functional Area (FA), and/or Funded Program differs from the receiver side If a Fund, FA, or Funded Program on the sending side of a transaction is different from the Fund, FA, or Funded Program on the receiving side of the transaction, the direct activity allocation of costs could be budget relevant or have an impact on funds, depending on the organization's treatment of budget and funds distribution. A commitment item is either budget relevant or cost relevant, not both. A budget is a guide to spending that ensures all expenses will be paid on time, while cost are payment rendered for services or products provided.

Derivation Rules Control how the commitment carry-forward and budget carry-over to the new fiscal year are carried out for individual funds management account assignment Describe the relationship between a sender account assignment for the old fiscal year and a receiver account assignment for the new fiscal year

End-Point Check on Learning Q1: What are the 2 systems that are used to capture Labor Costs? A1:   Q2: T/F: A time tracking file is only received automatically through an interface. A2: Q3. After the inbound interface is run, users check their emails regarding file-level errors. If no mails, the file ___ / _____ A3.

Practical Exercises 32

Practical Exercise: Enter Manual Direct Activity Allocation Transaction Code: KB21N Use this procedure to allocate costs from a Cost Center to a Cost Object (e.g. Internal Order, WBS Element, or another Cost Center). Perform this procedure when an activity charge (i.e. Labor) is transferred from one cost center to a cost object (WBS Element, Internal Order, Business Process, etc.). Note: Please write down the GFEBS assigned reference number at the completion of this exercise; it is needed to complete the next user procedure (KB23N)

Walkthrough: Transaction Code: KB23N Practical Exercise: Display Direct Activity Allocation Walkthrough: Transaction Code: KB23N Practical Exercise 1.2 Use this procedure to display a direct activity allocation. The user is able to view the quantity, amount, sender and receiver cost object. Fund and Functional Area associated with a direct activity allocation. In this example the direct activity allocation credits the sender cost center and debits the receiver cost center using a secondary cost element. This cost element is one of the attributes on the Activity Type master data records. This activity could also display an activity allocation from a sender Cost center to a cost object such as WBS Element, Internal Order, or Business Process. Perform this Procedure when you need to validate posting or view associated accounting document.

LSA #2 Check on Learning Q1: T/F: When speaking on time track errors, these errors are written to an error log and the interface continues processing subsequent records A1: Q2: GFEBS uses the hours on the inbound file, and performs _____ / _____ / _____on a daily basis A2:

LSA #2 Summary

Communicate Labor and Payroll Reporting Functions

Key Terms Associated with Cost/Labor Reporting Functions Unfunded Costs Plan v. Actuals Standard Rate Disbursement Funded Costs Variance Actual Costs General Ledger (GL) Account Labor / Report Function

Examine Detailed Labor and Cost Reports in BI Compares detailed employee-level payroll records in BI to summary payroll postings made in ECC Compares detailed employee-level labor records in BI to summary time-tracking posting made in ECC Provides comparison of the ATAAPS daily labor charges to the DCPS GPF detailed labor records

Detailed Labor Cost Report (Cont.) Identifies variance between standard labor allocations and actual payroll expenses for analysis and adjustment of the standard rates Provides labor costs by cost object, employee, gross reconciliation code, and fund/functional area

Payroll Audit Report Provides original employee-level, detailed payroll records from various system interface files or manually created files Displays changes made to master data on payroll records received from DCPS Displays changes made to non-financial attributes (e.g., civilian type (C-Type)) on payroll records edited directly in BI Provides the original record, the correction made, and the corrected record in the same view

Labor Management Report Generated by the BI Managerial Reporter. The BI Detailed Labor Management report eliminates sensitive information from the Defense Civilian Pay System (DCPS) file, enabling access to a broader range of users to access labor cost data for analysis. Provides the following: System detailed information for time-tracking Labor costs and summary payroll data by organization Labor costs by receiving cost object and employee Cost objects to which an employee charged his/ time Summary of pay and labor posting from ECC (Cost and Budget Execution)

Ad Hoc Queries Use-specific report compiled within BI May be customized and saved within the user preferences menu by clicking “Save As” button at the top of the screen, naming the query in the description field, and clicking OK to save. Format may be customized to operate like a pivot table Formulas available to enable users to calculate based on report attributes: Right-click on any of the attributes, click on Calculation and Translations, then Formulas, then New Formula. Enter an Ad Hoc formula for any attribute in the report and create a separate column for calculation results.

Additional Cost Reports Detailed Labor Cost Report – Provides information by employee for payroll and labor tracking Payroll Audit Report – Used to reconcile and adjust payroll-related issues Detailed Labor Management Report – Eliminates sensitive information from DCPS files, which enables a broader range of users to access labor cost data for analysis Payroll Source Data Report – Displays detailed labor from payroll system via interface Time-Tracking Source Data Report – Provides employee-level analysis for charged hours from the time-tracking system

Additional Cost Reports (Cont.) Budget Alignment and Hours Comparison Report – Compares paid and unpaid hours to charged hours to determine if there is a budget misalignment between payroll and time-tracking Standard Rate Comparison Report – Displays standard rates (prices) and actual payroll costs by cost center and activity type to enable user to compare standard labor rates to actual labor rates and identify variances Civilian Manpower Report – Provides data on manpower-related items such as man hours, man months, work years, and end strength, as well as C-Type. Displays data at summary level, across multiple dimensions by fund center, time, and cost centers. Financial Reconciliation Report - Reconciles payroll detail noted in BI with the payroll summary in ECC for both payroll amount and hours

LSA #3 Check on Learning Q1. It is the total value of costs planned for an activity type divided by the planned output quantity of the activity type (planned input $ / planned output quantity) A1. Q2. T/F: With Ad Hoc Queries, the report format may be customized to operate like a pivot table A2.

LSA #3 Summary

Conduct Practical Exercises 48

Walkthrough: Generate Detailed labor Cost Report Conduct Practical Exercise 18.1 NOTE: There is not a transaction code for this report; instead, the report is pulled out of BI and discussed.   Use this procedure to generate a Detail Labor Cost Report. This report supports GFEBS Labor and Payroll processes for all civilian and local nationals. Perform this procedure when viewing detailed labor costs by hours, overtime pay, fringe pay, type hours. Student Challenge: Perform this procedure and its appropriate step-by-step user procedure by accessing the PSW user procedures, tutorials, or MilWiki.

Walkthrough: Generate Payroll Audit Report Conduct Practical Exercise 18.2 NOTE: There is no transaction code for this report; instead, the report is pulled out of BI and discussed.   This report supports GFEBS payroll process for all civilians and local national to date. The purpose of this report is to provide capability to: View original employee-level, detailed payroll records provided to GFEBS from various sources or system interface files or manually created files that produce errors and get flagged in the error file. View changes made to the financial master data on the payroll records provided via interface in order to make successful summary postings in ECC. Student Challenge: Perform this procedure and its appropriate step-by-step user procedure by accessing the PSW user procedures, tutorials or MilWiki.

Questions?

TLO Summary Action: Determine the Labor and Payroll Process Conditions: You are a GFEBS user with access to a computer, the GFEBS training database, applicable GFEBS references, and awareness of Operational Environment (OE) variables and actors Standards: With a minimum of 80% accuracy, learners must demonstrate proficiency to: Identify labor cost and payroll activities Capture labor cost through time-tracking Communicate Labor and Payroll Reporting Functions