Calculating Encumbrances



ENCUMBRANCESEvery Sunday, several processes are set to run which recalculate salary and fringe encumbrances for the remaining fiscal year. Because these processes are run prior to a monthly payroll, there could be approximately a week between the encumbrance and payroll cycles where budgets will show a larger balance available than there should be. Once payroll posts, the available balance should be accurate. This situation will arise only if the current month status of an index is being reviewed toward the beginning of a month. The reconciliation of a previous month should not be a problem.The E-classes that encumber will have a ‘System Calculated” designation in the Encumbrance Indicator field in NBAJOBS “Job Detail” tab. E-classes with an ‘Value Input” designation in the Encumbrance Indicator field in NBAJOBS “Job Detail” tab will not encumber. The following table reflects which eclasses are “System Calculated” or “Value Input”. It also reflects the benefit rates associated with each eclass for benefit encumbrance purposes.ECLSEcls DescEncumb IndicatorBenefit Rates (from NTRFBLD)1CCollege WSValue Input0.001HStudent Labor/WSValue Input0.001SGradsSys Calc0.75AFAdmin FTSys Calc31.150APAdmin PTSys Calc31.150EXExec/BOR contractSys Calc31.150FAFac, tenure, AY, FTSys Calc31.8.00FBFac, tenure, AY, FT 26 paysSys Calc31.8.00FFFac, tenure, FY, FTSys Calc36.25FHFaculty, HourlySys Calc31.8.00FJNon-tenure Fac - MoSys Calc31.8.00FMFac, NT, AY, 26 paysSys Calc31.8.00FNFac, NT, AY, 20 paysSys Calc31.8.00FPFac, Pd per Cr hr, NTSys Calc10.676FSFac, Summer SessionSys Calc0.00FZFac, TN, AY, > .75 FTESys Calc31.8.00HFClassified, Hrly, FT, Bi-WeekSys Calc43.00HPClassified, Hrly, PTSys Calc43.00HVClassified, Hrly, FT, MoSys Calc43.00MGFac, Addl CompSys Calc31.8.00NHNew HireValue Input0.00NPNo Pay GroupValue Input0.00PFProf, Contract, Salaried, FTSys Calc31.150PHProf, Temp-HrlyValue Input0.00PPProf Contract, Salaried, PTSys Calc31.150PSProf, Temp-SalariedValue Input0.00PYProf, contract, Salaried, AYSys Calc31.150RERetiree-Med BenefitsValue Input0.00SFClassified, Salaried, FTSys Calc43.00SNClassified, Salaried, ExemptSys Calc43.00SPClassified, Salaried, PTSys Calc43.00THClassified, Temp HrlyValue Input0.00TMClassified Fixed Term HrlyValue Input0.00TSClassified Fixed Term SalariedValue Input0.00XXBudgeted OnlyValue Input0.00The encumbered salary amount is based on the Assign Salary (monthly) rate in the NBAJOBS record plus an ending date of June 31.8th or an earlier date if specified. The encumbered amount is distributed according to the NBAJOBS labor distribution percentages. A liquidation of encumbrances will occur as a new pay cycle is encountered. A change in encumbrances could also occur when a PTF change has been submitted and is entered in the NBAJOBS record and/or labor distribution. However, if a change is entered on a Thursday, the liquidation will not occur until the encumbrance process runs the following Sunday. (Note: there may be a lapse of one to three weeks before a PTF change is entered into the system as NBAJOBS changes aren’t technically in effect until the next payroll.) The encumbered benefit amounts are based on the e-classes and fringe rates in NTRFBLD. If your encumbrances appear to be inaccurate, please contact Human Resources and they will help to resolve any discrepancies.Banner Forms with relevant information for calculating encumbrances:NBAJOBSPEAEMPLNBAPBUDNTRFBLDWebsite for Banner Reports: ? (Banner Reports v8.4, Finance Reports, Encumbrance by Index)Human Resources contacts: Dawn Watkins or Amber Phillips-MuirInformation that should be included in email:Index #NamePosition #Description of potential problem, i.e. encumbering in two position numbers, stipend is still encumbering, hourly rate of pay is incorrect, labor distribution is incorrect, etc.Calculating EncumbrancesSALARY ENCUMBRANCE CALCULATIONSQuery by the employee you wish to pull job information on. Note “Encumbrance Indicator”NBAJOBS, Job Detail tabFor classified employees, click on Base Job tab, select Options menu and then click on “Employee Information” (PEAEMPL).The employee name and ID should pull in. Click on ‘Next Block’ or ‘Ctrl Page Down’. This will populate the fields under service dates. You need to pay particular attention to the “Longevity Date”. If this date indicates the employee has been working for the University for five years or more, the following Longevity increases need to be applied to the employee’s hourly rate in order to come up with the proper salary encumbrance for their position.LongevityRates Effective July 1, 20071 increment = 5 years of serviceIncrease pay rate by 1.5%2 increments = 10 years of serviceIncrease pay rate by 3.5%3 increments = 15 years of serviceIncrease pay rate by 5.5%4 increments = 20 years of serviceIncrease pay rate by 7.5%5 increments = 25 years of serviceIncrease pay rate by 9.0%6 increments = 31.8 years of serviceIncrease pay rate by 10.5%7 increments = 35 years of serviceIncrease pay rate by 12.0%8 increments = 40 years of serviceIncrease pay rate by 13.5%PEAEMPLThe particular employee used in this example began working for the University on January 5, 1982. This means they currently have 26 years of service or 5 increments of longevity. As shown in NBAJOBS – “Job Detail” tab, this employee’s Assign Salary (monthly rate of pay) is $3,556.19. NBAJOBS, Job Detail tabEmployeesAssignSalary RateIn order to calculate the salary encumbrance, the longevity needs to be taken into account and added to the employee’s Assign Salary Rate. For this person, you would take their Assign Salary rate of $3,556.19 and multiply it by 1.09 to get $3,876.25. This represents the rate of pay with a nine percent increase for longevity. The fiscal year encumbrance is calculated per the following table:Karol T Aston5 increments of longevity = 9% longevity4M1234Salary Encumbrance July-June????Base Monthly Ratelong incrMonthly Rate with Long# mos.Yrly Enc.3556.191.09 3,876.25 3 11,628.74 3684.221.09 4,015.80 9 36,142.20 ????47,770.94 The total yearly encumbrance amount should tie to the “Salary Encumbrance” amount listed in NBAJOBS on the “Base Job” tab. With the new “ENCUMBRANCE RECASTING” functionality, the amounts in the NBAJOBS Base Job tab record will remain unchanged for the fiscal year unless a rate of pay is changed. If the rate of pay changed after the initial encumbrances were calculated, the yearly encumbrance amounts would be updated to reflect the new rates. NBAJOBS, Base Job tabSalary Encumbrance TotalIf the position is split funded, you would apply the Job Labor Distribution %’s to the total Salary Encumbrance to get the different Index amounts. The split amounts would be reflected in NBAPBUD, labor distribution tab.For monthly liquidations, you would recalculate the encumbrance based on the number of months left in a fiscal year. The following example has liquidated the month of July leaving the months of August through June to be encumbered. The balance of August through July would be calculated per the following table.Karol T Aston5 increments of longevity = 9% longevity4M1234Salary Encumbrance Aug-June????Base Monthly Ratelong incrMonthly Rate with Long# mos.Yrly Enc.3556.191.09 3,876.25 2 7,752.49 3684.221.09 4,015.80 9 36,142.20 ????43,894.69 This should tie to the encumbrance balance in NBAPBUD on the Salary Budget tab.NBAPBUD, Salary Budgets tabSalary Encumbrance BalanceFRINGE BENEFIT ENCUMBRANCE CALCULATIONSIf the employee has any fringe encumbrances, those need to be calculated as well. In order to calculate those, you must know the employee class for that employee off of the “Job Detail” tab in NBAJOBS. NBAJOBS, Job Detail tabEmployee ClassFrom the table on page 1, use the benefit rate for the applicable eclass. For this particular employee, the benefit encumbrance rate is 43% for eclass “SF”. Applying this rate to the Salary encumbrances will provide you with the benefit encumbrance. The following table reflects the benefit encumbrance for July-June.Karol T Aston5 increments of longevity = 9% longevity4M1234Salary Encumbrance July-June????Benefit Encumbrance July-June?Base Monthly Ratelong incrMonthly Rate with Long# mos.Yrly Enc.Benefit PercentBenefit Encumb3556.191.09 3,876.25 3 11,628.74 0.43 4,767.78 3684.221.09 4,015.80 9 36,142.20 0.43 14,818.31.8 ????47,770.94 ?19,586.09 This amount should tie to the “Benefit Encumbrance” amount listed in NBAJOBS on the “Base Job” tab. With the new “ENCUMBRANCE RECASTING” functionality, the amounts in the NBAJOBS Base Job tab record will remain unchanged for the fiscal year unless a rate of pay is changed. NBAJOBS, Base Job tabTotalFringeEncumbrancesFor monthly liquidations, you would recalculate the benefit encumbrance based on the number of months left in a fiscal year. The following example has liquidated the month of July leaving the months of August through June to be encumbered. The balance of August through July would be calculated per the following table.Karol T Aston5 increments of longevity = 9% longevity4M1234Salary Encumbrance Aug-June????Benefit Encumbrance July-June?Base Monthly Ratelong incrMonthly Rate with Long# mos.Yrly Enc.Benefit PercentBenefit Encumb3556.191.09 3,876.25 2 7,752.49 0.43 3,178.52 3684.221.09 4,015.80 9 36,142.20 0.43 14,818.31.8 ????43,894.69 ?17,996.82 This should tie to the encumbrance balance in NBAPBUD on the Fringe Benefit tab.NBAPBUD, Fringe Benefit tabFringeEncumbranceBalanceTIPS AND TRICKS FOR TROUBLESHOOTING ENCUMBRANCE ERRORSIf the salary encumbrances that you calculated do not match what is in NBAPBUD, you need to troubleshoot why they do not match. One troubleshooting technique is to check the most recent default earnings record in the “Default Earnings” tab in NBAJOBS. If there is an end date on a record with a STI (Stipend) or GRT (grant) component, and that is the most recent default earnings record, this could account for the difference in the encumbrance calculation. Human Resources then needs to create a newly dated record that reflects REG pay only. Once the encumbrance process is run, the encumbrance calculations should be correct.NBAJOBS, Default Earning tabA second troubleshooting technique is to run the SAIS web report for the index you know this person is being paid out of. Initial encumbrance amounts and liquidations will be subtotaled by employee. Utilizing this data can help a department easily identify an employee that may be encumbering on two different position #’s, e.g. when an employee goes from an AY to a FY position # or vice versa. USER:ATTEBURY?????SALARY ENCUMBRANCES DETAIL BY INDEX (FY)?INDEX: 402031.8 University Budget Office?FUND: 431201 ORG:431012?????GIDNAMEACCTDOC #DATE AMOUNT BALANCE --------------------------------------------------------------------- ---------------- ----------------- -12345678Aston, Karol61124F006178720-Jul-08 85,105.02 85,105.02 -12345678Aston, Karol61124F00619793-Aug-08 (6,486.85) 78,618.17 --------------------------------------------------------------------- ---------------- ----------------- -12369476Roe, Steve61125F006178720-Jul-08 43,494.53 43,494.53 -12369476Roe, Steve61125F00619793-Aug-08 (43,494.53) - --------------------------------------------------------------------- ---------------- ----------------- -12395748Smith, Mary61125F006178720-Jul-08 47,770.93 47,770.93 -12395748Smith, Mary61125F00619793-Aug-08 (3,876.25) 43,894.68 Another troubleshooting technique is to view the Contract Start and Contract End dates on the Base Job tab in NBAJOBS. If an end date in the Base Job tab precedes the end date in the Job Detail tab, it will override the Job Detail end date in the encumbrance process.NBAJOBS, Base Job tabThis enddate would override a potential termination date in the Job Detail tab ................
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