How Fringe Charges Are Calculated | KFS Labor Benefit Calculation Table | How the Labor e-docs Handle Retroactive Accounting Changes
The KFS Labor Distribution (LD) module automatically calculates fringe benefit charges within two processes: the Labor Enterprise Feed, which handles gross pay and encumbrance charges coming in from the Payroll system, and the retroactive Salary Expense Transfer (ST) electronic document (e-doc). (This includes the year-end version (YEST) and the effort certification version of the retroactive adjustment.)
The process is governed by two factors:
Labor Object Code of the transaction record. In a table maintained by Payroll, each Labor Object is assigned one (or more) benefit types. We currently use three benefit type codes:
Labor Benefit Rate Category Code of the account being charged. We use four codes:
To calculate the fringe charge for a specific labor charge (gross pay) transaction, the account number’s rate category and the object code’s benefit type code are used to select a table row in the Labor Benefit Calculation Table. For rates and object codes for special allowances, see the Labor Benefit Calculation Table for Allowances. Data in this table supplies the fringe rate and fringe object code for the fringe charge transaction, and the account number and object code for the fringe pool offset transaction. The rest of the attributes on the fringe charge transaction and fringe offset transaction are taken from the input labor charge transaction.
In the Labor Enterprise Feed process, each gross pay detail and encumbrance detail transaction creates a fringe charge transaction, even if the fringe charge amount is zero. Each fringe charge creates a fringe pool offset account using the account and object code values from the Labor Benefit Calculation Table, and the opposite credit/debit code.
In the ST process, fringe charges are created for each "to" and "from" data row. Offset transactions will be created whenever there is difference in fringe rate between any of the "from" and "to" transactions. If the "from" and "to" transactions all have the same rate code and object code, there is no impact to the fringe pool accounts (no net change in the fringe amounts), so no fringe pool offset transactions are needed.
The generated fringe charges and fringe pool offset transactions are processed into the KFS Labor Ledger nightly batch process along with their parent gross pay cost transactions, and are posted to the Labor Ledger balance and detail tables, and then summarized for feeding the General Ledger batch process.
The fringe charge process starts with the account number and the object code from the labor transaction (gross pay expense from Payroll, or retroactive adjustment from an ST e-doc). The table row which combines the labor object code’s benefit type (MN, MX or Z) and the account number’s labor benefit category code (EN, CC, FD or NF), provides the fringe object code and fringe rate for the fringe charge transaction, and the account and object code for the fringe pool offset transaction. The original labor charge is multiplied by the fringe rate to obtain the fringe charge and fringe pool offset amount.
|Fiscal Year||Chart Code||Labor Benefits Type Code||Labor Benefit Rate Category Code||Labor Benefit Object Code||Labor Account Code Offset||Labor Object Code Offset||Position Fringe Benefit Percent||Active Indicator|
In order to enable effort reports and other Labor Distribution retrievals to reflect prior-period retroactive accounting adjustments within the affected prior period, the KFS Labor Distribution (LD) module uses a set of individual labor ledger charge transactions with a combination of AC (actual) and A2 (retroactive) balance type codes. For each input "from" or "to" row in a KFS Salary Expense Transfer (ST) e-doc, the application program creates three Labor Distribution pending entries:
The ST e-doc will also generate fringe benefit charges, using the same rules, depending upon the accounts and object codes involved. When transferring salary expenses among departmental and grant accounts, it is possible that the fringe charge debits and credits will not be in balance due to different fringe rates on the accounts. In this case, the ST process will generate one or more adjusting transactions using a clearing account taken from a Labor Distribution parameter.
To view pending entries for an ST e-doc, you can open the Pending Entries tab on the e-doc, or you can use the Labor Pending Entries inquiry from the Main Menu. Please note that while there are pending entries waiting processing, you will be unable to submit another ST e-doc for the same combination of employee/time periods/accounts/object codes. Several of the Labor Distribution account balance inquiries give you the option of including pending entries in the displayed balances.
When the ST e-doc reaches final approval, its pending entries are released for processing. The nightly batch labor scrubber job fills in the fiscal period codes of the first two transactions with the fiscal period of the current processing date. All three entries (one AC balance type and two A2 balance type transactions) are posted to the labor ledger. Only the AC transactions are passed to the General Ledger, so it sees only the current period actual transactions with no "retro" aspects.
Using the Labor Ledger View retrieval, the effort certification (A2) view looks at the net values of the detailed entries within a fiscal period. In this view, the first two current period transactions cancel each other out; the third shows the adjustment as occurring in the original earnings period. The AC view shows only the actual "cash" aspect of the salary transfer, same as the General Ledger.
If you have selected the "AC plus A2" view in a LD inquiry, drilling down to the transaction details in the Labor Ledger inquiries after the ST has posted will show the individual details of the AC and A2 transactions making up the monthly balance. If you have selected the AC view, the A2 transactions are not displayed in the drill-down. The earnings balance retrieval used for selecting earnings in the ST transaction is an "AC plus A2" view.
This process is performed in the following KFS Labor Distribution e-docs: