2014-15 Fiscal Year-End
Date:
June 27, 2015
Memo:
Compensated Absences Year-end Accruals
PS2160-Year End Leave Liability Report
John Ginther
From:
Ref: 15-32-19
Colleges are required to record the amount of annual leave, sick leave and comp time
both earned and taken. Information about how to record accrued annual, sick leave,
and comp time is provided annually by SBCTC as Accrued Leave Liability Worksheets.
Colleges run the PS2160 Report (scheduled after the final June payroll – 06B, but prior to
any posting of leave for the new fiscal year). Actuarial and benefit factors have been
provided to SBCTC-IT for inclusion in that job. Numbers from the PS2160 Report are input
into the Accrued Leave Liability Worksheets. For simplicity and consistency, SBCTC also
provides each colleges’ prior year ending Accrued Leave Liability General Ledger
ending balances.
SBCTC-IT has added a new, more detailed report to the PS2160-Year End Leave Liability
Report. It is the PS2160B – Year End Leave Liability Detail Report. This report is added to
show the detail calculations by employee and support how the totals for the summary
report are arrived.
The report sequence will be by Leave Type by Fund By Employee Name.
By employee, it will report the ACTUAL hours earned and taken within the 12 month
fiscal year and the ending June balance. It will also show by employee those hours with
the cost factors applied: Actual hours * employee hourly/daily rate * leave type factor.
Totals will be shown by each Fund within each Leave Type and total Leave Type. The 3
column totals of Leave Costed “should” match the current summary report. There may
be minor discrepancies due to rounding.
Please note that if an Employee is paid out of multiple different funds, then he would be
listed in each fund.
If “XXX” is reported under the Fund column, that employee had no jobs in order to
develop an hourly rate, but had a leave balance.
Leave Taken and Leave Accrued costs are calculated for the current fiscal year only. If
you have scheduled this job prior to May 27, 2015 you will need to delete and
reschedule.
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2014-15 Fiscal Year-End
Accrued Leave Liability Worksheets:
1) Proprietary Funds:
For each fund, fill in the "Data Input" cells at the top of the first worksheet with the
fund number and the leave liability values noted. With that data, the worksheet will
automatically calculate the earned leave value, as well as the breakdown of the
Earned and Taken leave liability between salaries and benefits. The bottom section
of the worksheet provides the required journal entries for the fund. It is
recommended that the worksheet be printed and used as documentation for the
journal voucher. This process is repeated for each proprietary fund with leave
liability balances.
Note: If your college has leave balances in both current (51xx) and long-term (52xx)
ledgers, you need to add both amounts for the "Data Input" "Beg. Liability 6/30/xx".
For example, if Fund 524 has a balance in both 5125 and 5225 for accrued annual
leave, the sum of these ledgers would be the "Data Input" value. (See ShortTerm/Long-Term Recommendations below.).
If you have more than one proprietary fund you will need to copy the worksheet as
noted below:
2) Governmental Funds:
The second worksheet is designed to provide the required journal entries to be
booked into the General Long-Term Obligations Subsidiary Account, 999. It
functions much the same as for proprietary funds except that there is no need to
distinguish the portion of the liability relating to benefits. Simply complete the "Data
Inputs" section and the worksheet will do all the necessary calculations and provide
a list of the required journal entries.
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2014-15 Fiscal Year-End
Short-Term/Long-Term Guidance:
1) Annual and Sick Leave:
OFM recommends that colleges record both the annual and sick leave liabilities as
long-term. This conclusion is based on the observation that these balances
generally increase over time. There are certainly circumstances when individual
employees may spend down leave balances or cash them out at retirement.
However, these factors seem to be offset by employees who continue to bank
increasing numbers of leave hours that are typically valued at higher rates of pay. It
is therefore recommended that in addition to the entries provided by the
worksheets, colleges use the appropriate transaction code (823 for Annual Leave
and 824 for Sick Leave) to reclassify any short-term balances to long-term. Per OFM,
colleges should record current (short-term) liabilities for annual leave and sick leave
if they are aware of any employees planning to retire during the upcoming fiscal
year. The calculated amount of those cash-outs should be re-classified to 51xx from
52xx.
2) Compensatory Time:
Due to the strict requirements on how comp-time must be used, any outstanding
liability at year-end should be classified as short-term. After recording the entries
provided via the worksheet for this liability, it is recommended that colleges reclassify
any long-term liability to short-term using transaction code 821R.
Please call John Ginther at 360-704-4380 or Denise Nguyen at 360-704-4378 if you
have any questions.
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