Adjusting/Correcting Payroll Accounting Transactions

1. Determine the payroll adjustment being initiated and if it is allowable.

   Payroll refers to salary and fringe transactions processed in either the Enterprise Financial System (EFS) general ledger or the Human Resource Management System (HRMS). Adjustments must be processed timely.

   Transaction type:

   • Correction of technical errors: If the wrong chartfield string was originally used to record the transaction, the error can be corrected by moving the expense from the incorrect chartfield string to the correct chartfield string.
   • Change in effort percentages: Payroll distribution totals, expressed as a percentage of an employee's wages, must agree with the effort certification statement. It is important that the reclassification is made in compliance with sponsor terms and conditions and, for projects that are ending, made before project period end.
   • Redistribution of expenses amongst chartfield strings paying for a common activity: In these situations, expenses are charged to one chartfield string on behalf of others. This is generally done for efficiency purposes for non-payroll expenses. Portions of the expense are moved to the other relevant chartfield strings.
   • Adjusting payroll for faculty in the nine/twelve (9/12) program: To keep payroll distributions consistent with the appointment, it is necessary to adjust the expense on a biweekly basis after the original salary has been posted.
   • Refer to the Following Resources: 
     9 Over 12 Payroll Adjustment
2. Allowable Guidelines / Criteria:
   • Negative expenses must not be created. Expenses must be moved within the fiscal year originally recorded.
   • Fund restrictions must be rigorously applied. Some expenses recorded in unrestricted funds are not allowable in restricted funds.
   • Function must be aligned with the transaction activity.
   • Salary and fringe must remain classified as salary and fringe expense.
   • To move an expense from a sponsored project (or to credit) to a non-sponsored account outside the budget/award period, notify the SFR accountant, as a revised report/invoice must be submitted to the sponsor with funds to be returned.
   • Adhere to proper deadlines, accounting periods, and protocol when moving a payroll expense. Refer to: Cost transfer approval matrix (PDF)
   • Transactions must be processed within 90 days from when the original charge was posted. If the deadline is missed, a request for exception to policy is required and additional justification and approvals are necessary to be documented on Form UM 1921.
   • When moving non-sponsored payroll expense transactions from a prior fiscal year, use the appropriate transfer accounts.
   • To move an expense to a sponsored project, additional criteria must be met:
   • No payroll charges may be moved onto a sponsored project more than 12 months after the original charges posted to the General Ledger.
   • Under most circumstances, expenses incurred before the sponsored project was established cannot be transferred to the sponsored project.
   • The expense cannot be moved from one budget period to another solely to avoid overdrafts (as determined by sponsor regulations).
   • The expense must be allocable as a direct charge to the project. If the expense did not provide a benefit to the project, it cannot be charged to the project.
   • The expense must be an allowable project expense, as defined by University policy, sponsor's policies, and the terms and conditions of the award.
   • Sponsored projects cannot be used as a "holding" or "clearing" account for redistribution of expenses to other chartfield strings.
   • An expense from any project in overdraft status cannot be moved to another sponsored project for the sole purpose of eliminating the overdraft.
   • The expense cannot be moved to a project having unexpended funds for the sole purpose of expending the remaining balance.
   • To move an expense from a sponsored project (i.e., to credit a project), when the sponsored project is outside the budget/award period, additional criteria must be met:
     • Notify the SFR accountant, as a revised report/invoice must be submitted to the sponsor, along with return of funds.
     • For closed effort periods, follow the process to re-certify effort.
   • No transactions that charge a sponsored project after a final report or invoice has been submitted to a sponsor will be allowed.
   • Retros are reflected on the effort statement one day after the charges appear in the general ledger. Check the calendar on the Office of Cost Analysis's website to see when the last Retro can be processed before the effort deadline. Under most circumstances, Retros processed after the effort deadline are not allowed. If the Principal Investigator and the Department Head submit a properly detailed justification with Certified Approval, the Office of Cost Analysis will consider approving a Retro after this point. If SFR has already submitted the final report/invoice to the sponsor, no Retros moving expenses onto the sponsored project will be allowed.
3. Initiate and prepare the transaction
   • Prepare a Retro in HRMS.
   • Non-sponsored to Non-sponsored Retros: If the transaction is processed outside the Retro processing timeframe, a general ledger journal entry is initiated because HRMS does not allow Retros after the fiscal year has ended. In initiating the transaction, it must adhere to the following:
     • Journal Entry must use transfer accounts for prior year corrections processed in a subsequent fiscal year.
     • Salary and fringe must be processed on the same journal entry. Unlike Retros, fringe must be manually calculated when corrected using transfer accounts in a subsequent fiscal year.
     • The journal entry justification must include name, original payroll dates, job class, explanatory comments, and note approvals, if required/received.
4. Obtain approvals
   • Retros entered will be automatically routed for approval, if required.
   • Department is responsible for ensuring Form UM 1921 has been completed and attached if the cost transfer is occurring more than 90 days from the original transaction.

Imaging of back-up support in Perceptive Content or attaching documentation to the Retro in HRMS is required. All journal entry documentation must be retained in either EFS or Perceptive Content.

If the transaction is being recorded more than 90 days after the initial transaction, complete the additional steps to request an exception:

• If the Retro will credit a sponsored project and debit a cost share chartstring, complete the exception request Form UM 1921 and obtain the required approvals. Include a reason why the salary and fringe is being transferred and why it is being done after the effort certification period. Re-certification of effort is not required if the charges are being transferred from a sponsored project to a cost share chartstring for the same project.
• If the Retro moves charges from a non-sponsored chartstring to a sponsored chartstring, complete the exception request Form UM 1921 and obtain the required approvals. Effort re-certification may be required. The exception request form must contain both of the following:
  • A detailed explanation for the salary transfer that states how and why the original charge was not correctly assigned.
  • An explanation as to why the transfer was not made before the effort certification deadline.
• Once the Retro Distribution is submitted with the form and approved by the CA, it will route to the Controller or AVP for Research for review and approval.