Contracts and Grants Accounting

TRANSFERS FOR PAYROLL EXPENSES

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Current policy requires that all payroll cost transfers be processed through the OPTRS payroll system (UPAY) to ensure: 1) adequate payroll recordkeeping and proper audit trails, and 2) compliance with effort reporting requirements.

Although it is inappropriate to process payroll cost transfers directly in the Actuals Ledger through an on-line GL journal entry rather than the payroll system, at this time the transfer of payroll expenses via an auto-reversing GL journal entry during the award’s Adjustment Period will be allowed. This practice is being temporarily allowed to facilitate timely award closeout. During the closeout Adjustment Period (i.e., by the GL close of the 2nd month after the Award's expiration date), a payroll expense can be reclassed in the second accounting period and then automatically reversed the next month.

Process an auto-reversing journal entry for payroll transfer after payroll posts but before the cut-off date for the second accounting period following the award expiration.

This “work around” procedure has been implemented specifically so that all award expenses are recorded in the Ledger in time to submit the Closeout Certification (i.e., to manage the lag between submitting a UPAY request and seeing the subsequent payroll costs posted in the Ledger). RAs and Fund Managers should still process/request a payroll transfer via UPAY to properly document the transfer, but also process an auto-reversing journal entry to ensure salary costs are correctly posted to the Ledger in time to close the award. Note: it is not necessary to include lines for Benefits/Fringe on the journal transaction, as BFS will create these entries automatically based on the account value used for the salary transaction. (click example image to enlarge)

Example of Payroll Transfer Journal

As soon as payroll cost transfers are executed in a more timely fashion, this temporary procedure will be rescinded, and then it will be required to process payroll transfers only through the payroll system (UPAY). Once these procedures are again in effect (see Cost Transfers / Expenditure, Revenue, and Balance Sheet Adjustments), supervisors who approve noncompliant payroll cost transfers through journal entries will receive an email requesting the entry be reversed and the cost transfer be re-processed correctly through the payroll system. Following the email request, an approver’s access will be revoked if noncompliant transfers and approvals continue.