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 1 st 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

8. 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 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

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

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 Only 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

14. FINANCIAL LEAVE ACCOUNTING 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. DOC – PAS90XXX – LEAVE ACTIVITY LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 (601850, 611850, 621850) Budget Financial Transactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions 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

15. LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 Budget Financial Transactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions LEDGER ACTIVITY SALARY ACCOUNT SUB ACCOUNT 0,1 or 2 Budget Financial Transactions BENEFIT ACCOUNT SUB ACCOUNT 6 (668930) Budget Financial Transactions FINANCIAL LEAVE ACCOUNTING 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. DOC – PAS90XXX – LEAVE ACTIVITY VACATION ACCRUAL VACATION USAGE 6,100.97 + 6,100.97-1,895.74 -356.19 -1,895.74 -356.19

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. 668930 Acct. 601850 Acct. 611850 Acct. 621850

18. FINANCIAL LEAVE ACCOUNTING 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

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