Payroll Encumbering Process

Effective Date:

January 4, 2016

Function:

Labor Distribution

Contact:

Kathy Shattuck

Basis for Procedure

The payroll encumbrance process allows budgeted labor costs to be set aside from available project funds. By reserving funds from a budget for expenses committed but not expended, a more accurate available funds figure can be maintained.

Procedure Summary

This procedure describes the Research Foundation's payroll encumbering process.

RF Payroll Encumbering Process

The payroll encumbrance process allows budgeted labor costs to be set aside from available project funds. By reserving funds from a budget for expenses committed but not expended, a more accurate available funds figure can be maintained.

The payroll encumbrance process automatically encumbers salaries and fringe benefits for

Encumbrance Calculations

The payroll encumbrance calculation associated with each Project Task Award Organization Expenditure (PTAOE) is based on daily rate times the number of working days in the period being encumbered.

The daily rate, which is the rate of encumbrance on a daily basis prorated by the labor schedule line, is based on rules associated with each earnings element.

i.e., A person is paid a biweekly rate of $2,000. The overall daily rate would be $200. If the person had three labor schedule lines LS1 50%, LS2 30% and LS3 20%; the daily rate associated with the PTAOE related to each would be LS1 $100, LS2 $60 and LS3 $40.

Encumbrance Changes

The following changes will cause the recalculation of encumbrance to occur the next time the encumbrance process is run (which is nightly):

Encumbrance Exceptions and Encumbrance Shortages

Encumbrances are created for encumbrance exceptions or encumbrance shortages but are not posted to Grants.

Encumbrance Exceptions

Encumbrance exceptions occur when various conditions are present during the payroll encumbering process. If encumbrance exceptions are not addressed, actual expenditures may or may not be posted to Grants based on the Exception Reason. For a complete list of Exception Reasons, refer to "RF Payroll Shortage and Exception Report".

Encumbrance Shortages

Encumbrances will not be posted to Grants if there are insufficient funds available. If encumbrance shortages are not addressed, actual expenditures for payroll or grants batches (usage, miscellaneous transactions, or time card) will be charged to a project/task/award which may result in overexpended projects, tasks, and awards.

Monitoring

Frequent monitoring of encumbering exceptions and shortages should be done and corrective action taken. For more information, refer to reports below.

Reports to Use

The following reports should run at least weekly to monitor payroll encumbering:

Report Name

Description

RF Projected Suspense Charges Report

Run this report to monitor future payroll dates and potential transactions to suspense resulting from incomplete/incorrect charging instructions or data/status issues with the project/task/award. These will also affect actual payroll charges, if not addressed timely.

RF Payroll Shortage and Exception Report

Run this report to monitor

Shortages (previously known as Failed Funds transactions) - Identifies payroll encumbrance amounts that will not be posted as encumbrances due to budget limitations.

Exceptions - Identifies transactions that will not be posted as encumbrances for the exception reason listed.  For a description of the report and exception reason codes, refer to "RF Payroll Shortage and Exception Report" in EPSS under Grants Management, Reports/Queries, GM Oracle Reports.

Definitions

None

Related Information

None

Forms

None

Change History

Date

Summary of Change

January 4, 2015

Removed the following sections: Element caluculations, Determining Number of Working dats and added Monitoring Payroll Encumbering reports because the guidance document is being eliminated.

January 30, 2004

New document

 

 

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