Balancing Payroll Accruals with Finance Object Code 2161 Accrued Wages Payable

1
Tech Fiest a 2006
Balancing Payroll Accruals with Finance Object
Code 2161 Accrued Wages Payable
April 2006
2
Human Resources current School YTD District total
Accrued Pay for all payroll frequencies should
balance to Object Code 2161 for all Finance funds.
Tech Fiest a 2006
Step One
Use the General Ledger Summary Inquiry to view
the amounts in Object Code 2161 for all funds in
Finance
Use HRS3050 School YTD for the current school
year.
3
During the School Year, Object Code 2161 should
always have a negative balance
Tech Fiest a 2006
- 975,856.27
4
Tech Fiest a 2006
Frequency 5 current School YTD
Frequency 6 current School YTD
55,184.39 plus 919,281.32 974,465.71
Finance Object Code 2161 975,856.27
Difference 1,390.56
5
Tech Fiest a 2006
Identify the difference between Finance and
current School YTD for all pay frequencies.
Step Two

• Compare total Accrued Pay on the YTD Accrual
  Account Distribution Journal with the current
  School YTD for both pay frequencies.

• The From Pay Date on the YTD Accrual Account
  Distribution Journals should include EOY Accruals
  but not include the last payroll in August and
  the To Pay Date can be blank

6
Balance School to YTD Accrual Acct Dist Jrnl for
Frequency 6
Tech Fiest a 2006
Frequency 6 YTD Accrual Acct Dist Jrnl
Frequency 6 current School YTD
Difference 21,511.19
7
Tech Fiest a 2006
Difference 21,511.19
Step Three
One of the main reasons that a YTD Accrual
Account Distribution Journal for EOY Accruals to
present would not balance with the current School
YTD is due to non-standard employees.
How can the non-standard employees be identified
and included in the YTD Accrual Account
Distribution Journal totals?
8
Filtering (aka isolating) information on the
User Created Report
Tech Fiest a 2006
9
Tech Fiest a 2006
Results of Distribution Journal for selected
employees plus all other employees
21,211.22 plus 897,770.13 918,981.35
918,981.35 - 919,281.32 - 299.97 Difference
10
Tech Fiest a 2006
STEP 4
Before the difference between Finance Object Code
2161 and current School YTD can be determined,
the current School YTD for each frequency must
balance to the YTD Accrual Account Distribution
Journal for the same frequency.
What caused the two reports to reflect different
total Accrued Pay balances?
Primary reason is there are accrual balances in
either the prior or next School YTD that are
affecting the current School YTD.
11
Tech Fiest a 2006
Prior School YTD
Identified Employee
Prove it!!
12
-299.97 plus 9,381.51 ,9082.54 Matches
total Accrued Pay for YTD Accrual Account
Distribution Journal
Tech Fiest a 2006
Prior
Current
How can this be corrected??
13
Special Adjustments Accruals Only
Tech Fiest a 2006
Step 5
14
Current School YTD
Tech Fiest a 2006
YTD Accrual Acct Distr Jrnl
Non-Standard Employees School YTD
897,770.13 plus 21,211.22 918,981.35
15
Tech Fiest a 2006
Step 6
Balance School to YTD Accrual Acct Dist Jrnl for
Frequency 5
16
YTD Acct Dist Jrnl for Non-Standard Employees
Tech Fiest a 2006
YTD Acct Dist Jrnl
56,574.95 minus 55,184.39 1,390.56 (This is
the difference between Finance and current School
YTD)
Current School YTD
48,434.49 plus 8,140.46 56,574.95
17
Step 7
Tech Fiest a 2006
Since the YTD Accrual Account Distribution
Journals do not equal the School YTD, the next
step would be to determine if the prior or next
School YTD has total Accrued Pay.
After checking, it was found that the prior and
the next School YTD total Accrued Pay are both
zero. The next step would be to compare the
accrual amounts for each employee between the
School YTD and the YTD Accrual Account
Distribution Journal.
18
Tech Fiest a 2006
The School YTD Accru Pay field for this employee
is zero, but the YTD Accrual Payroll Account
Distribution Journal shows 1,390.56 for Accrued
Pay. This amount matches the difference between
the current School YTD and Finance Object Code
2161.
19
Tech Fiest a 2006
If the Pay Off date on the Job Info screen
matches a Pay Date, then accruals will
automatically be cleared and the YTD Account
Distribution Journal would reflect this
transaction.
In this case, the Accrual Code was removed from
the Job Info screen. When the employee paid off
in November, the accruals cleared from the School
YTD but did not clear from the YTD Account
Distribution Journal and Finance Object Code 2161.
20
Tech Fiest a 2006
Normally, in this situation the system would have
left the accruals in the School YTD and the Zero
School YTD utility would have to be used to make
the necessary transactions.
Since this did not happen, this amount will need
to be manually deducted from the YTD Account
Distribution Journal and from Finance until the
record is corrected.
21
Step 8
Tech Fiest a 2006
RECAP
YTD Accrual Account Distribution Jrnl Freq 6
Accrued Pay 897,770.13 Freq 6 Non-Standard
21,211.22 Freq 5 Accrued Pay 48,434.39 Freq 5
Non-Standard 8,140.46 Less Employee 483
(1,390.56) Total Accrued Pay 974,165.74
Current School YTD Freq 6 Accrued Pay
918,981.35 Freq 5 Accrued Pay 55,184.39 Total
Accrued Pay 974,165.74
22
Step 8(cont)
Tech Fiest a 2006
RECAP
Current School YTD Total Accrued Pay 974,165.74
YTD Accrual Account Distribution Jrnl Total
Accrued Pay 974,165.74
Finance Object Code 2161 975,856.27 Less
Employee 483 (1,390.56) Total Accrued Wages
Payable 974,465.71 Less School YTD Accrued Pay
(974,165.74) Difference 299.97
23
Step 8(cont)
Tech Fiest a 2006
RECAP
Since current School YTDs and YTD Account
Distribution Journals for all pay frequencies
equal each other and Finance does not match these
reports, all entries to Object Code 2161 must be
reviewed.
24
Step 8(cont)
Tech Fiest a 2006
RECAP
Non-Standard accruals for both pay frequencies
29,351.68
Total 364,153.63
Difference of 299.98
EOY Accruals for both pay frequencies
Total carried over from previous FY
25
Tech Fiest a 2006
Conclusion
Without further investigation, it is not possible
to completely balance Finance Object Code 2161 to
current School YTD. However, it is known that
from the EOY Accruals forward plus the
non-standard employees accrual amounts, Payroll
balances with all entries to Finance.
26
Tech Fiest a 2006
Conclusion

• Items discovered during review
• Zero School YTD was performed on 5 employees and
  not interfaced to Finance for a total of
  5,396.30.
• 2004 School YTD has Accrued Pay that was not
  cleared that totals 5,492.38
• An adjusting entry of 99,036.93 was made and if
  the first two had been posted to Finance, it may
  have made the adjustment less.

27
Tech Fiest a 2006
Conclusion

• District can either make the adjusting journal
  entry for the 299.98 now or wait until the end
  of the school year.

It is highly recommended that the Accrual
Variance Extract be utilized to identify
potential employee accrual issues and clear them
prior to the end of the fiscal year.
28
Tech Fiest a 2006
A checklist of steps to take when balancing
Finance to Human Resources will be available
soon.
April 2006