1. Salary Overpayments “Write-off” Threshold Financial UL Meeting June 2007

2. Page 2 Background Information All salary overpayments for current faculty and staff are pursued, regardless of dollar amount – Gross Pay Deductions – Recall of direct deposit or stop payment of check – Repayment by personal check from staff member Salary overpayments for terminated faculty and staff are processed as a General Receivable invoice – Except when the net amount owed is less than $50.00 (“write-off” threshold)

3. Page 3 Recommendation for New “Write-off” Threshold Effective 7/1/07, implement the following changes – Change threshold test to gross pay amount rather than net pay amount Eliminates the need to do complex gross-to-net calculations – Change the threshold amount to $300.00 gross pay Reduce number of General Receivable (AR) invoices and associated workload by 30% Only reduce the dollar amount of overpayments pursued by 4% $300.00 is also the dollar amount under which we do not report adjustment amounts to the National Science Foundation (NSF) after we create & submit the final financial report to the federal sponsor

4. Page 4 Analysis of Overpayment AR for FY06 Range of Gross Pay # of Overpayments % of Total # Overpymts Amount of Gross Pay % of Total $ Overpymts Amt Absorbed by Dept $.01 thru $100.00318.40%2,499.300.36%1,937.83 $100.01 thru $150.00308.13%3,623.650.52%2,766.67 $150.01 thru $200.00267.05%4,657.060.67%3,688.14 $200.01 thru $250.00164.34%3,571.860.52%2,749.74 $250.01 thru $300.00112.98%2,977.150.43%2,235.03 Over $300.0025569.11%673,292.3197.49% TOTAL369100.00%690,621.33100.00%13,377.41 BACKGROUND: 1. Currently overpayments that have a net amount of $50.00 or less are not pursued through the Accounts Receivable process. The overpayment is absorbed by the departmental salary shortcode. The corresponding gross pay is typically between $80-$100. 2. Based on overpayment data from Fiscal Year 2006, the above volume by gross pay range was determined. 3. Based on an analysis of all of the steps done in the Payroll Office and Accounts Receivable, on the average an overpayment costs $90 per AR invoice to process. RECOMMENDATIONS: 1. Change the "measure" from net pay to gross pay to reduce work needed to calculate gross-to-net for all overpayments. 2. Change the threshold to to gross pay of $300.00. With this threshold, departmental shortcodes would have absorbed $13,377.41 of overpayments.