SIO Salary Recharge Program Labor Clearing Account

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SIO Salary Recharge Program/Labor Clearing
Account

• Jennifer Davis and Terri Varnell
• SIO/UCSD

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SIO Salary Recharge Program/Labor Clearing
Account

• Introduction
• Overview
• Advantages
• Demonstrate rate creation
• Demonstrate monthly process
• Disadvantages
• Summary
• Questions

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Introduction

• SIO has been using since 1977
• Use when you have multiple employees on multiple
  funding sources
• Not necessary or useful for 19900 funded
  employees
• The application is built with FilemakerPro.
• This presentation, and more detail about the
  system, will be on the SIO website within one
  week - www-sio.ucsd.edu/terri/salrchg/share2000.

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Overview

• Create annualized salary recharge rates for
  individual employees (Detail in demo.)
• Direct labor costs (not recharge rates) charged
  to single clearing account
• Salary recharges then distributed (charged)
  against individual index numbers (Detail in
  demo.)
• Income from recharges goes back into clearing
  account

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Advantages - (why we do this)

• Eliminates PETs
• Back pay issues resulting from union negotiation
  delays not a problemwe charge now for
  anticipated increases
• Administrative salaries charged and tracked
  accurately
• Reduces on-line timekeeping effort
• Annual rate is stable, allowing for accurate
  projections
• Minimizes monthly PPS activity
• Simplifies PAR process
• Compensatory time earned is recharged when it is
  earned
• Simplifies proposals, agency reports, in-house
  cost tracking, etc.

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Advantages (Continued)

• Only productive hours are charged to extramural
  funds
• Employee awards simplified
• Provides a variety of management and PI financial
  reports
• Pay salaries before accounts are fully set-up
• Provides ability to request actual salary amount
  needed for specific effort on grant/contract.
• Can be used as a personnel management system

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Rate Calculation Demonstration

• The rate calculation is based on the following
• The anticipated annual salary is multiplied by
  the employees actual benefit factor, then
  multiplied by the employees anticipated downtime
  rate. That produces an anticipated annual
  recharge cost which is then divided by the number
  of working hours in the year to yield an hourly
  recharge rate.
• As with other recharge operations, additional
  calculations are occasionally necessary to make
  adjustments to prior years.

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2088 (working hours in year) 192 (vacation
hours accrued) 96 (holiday hours accrued)
78 (sick leave departmental average used)
2088-192-96-781722
productive hours.
2088/1722 1.21 downtime factor for this specific
employee
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Rate Calculation Demonstration( Continued)

• The rate calculation is based on the following
• The anticipated annual salary is multiplied by
  the employees actual benefit factor, then
  multiplied by the employees anticipated downtime
  rate. That produces an anticipated annual
  recharge cost which is then divided by the number
  of working hours in the year to yield an hourly
  recharge rate
• 59402 x 1.12 x 1.21 basic calculation
• As with other recharge operations, additional
  calculations are occasionally necessary to make
  adjustments to prior years.
• 59402 x 1.12 x 1.21 x adjustments 83,834 annual
• 83,834/12 monthly rate 6986
• 6986/174 hours 40.15/hr

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Disadvantages

• One more account to reconcile and audit
• Requires effort to create rates
• Clearing account balances must be analyzed at
  year end
• Recharge rates appear to be high
• Costs appear one month in arrears
• LASR balances also a month in arrears
• Two months of recharges must be processed in the
  month of June for fiscal closing

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Summary

• a system thats useful for departments with
  multiple employees reporting time on multiple
  extramural funding sources
• create annualized salary recharge rates for
  individual employees
• charge direct labor costs to a single clearing
  account
• distribute salary recharge costs to individual
  index numbers
• put the income from recharges back into the
  clearing account

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Summary (Continued)

• Advantages
• stable rates,
• eliminate PETs
• simplify PARs
• deal with delayed salaries
• comprehensive reports
• ability to manage and track administrative
  salaries
• Disadvantages
• set up the annual rates
• to monitor the clearing account balances
• exercise good controls because costs appear a
  month in arrears

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Questions ???
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SIO Salary Recharge Program/Labor Clearing
Account

• This presentation and additional detail about the
  program will be available on the SIO website
  within a week
• www-sio.ucsd.edu/terri/salrchg/share2000