Transcript PPMS User Group May 29, 2009 Lynn Melton PPMS and FMS (one of these things just doesn’t belong)

PPMS User Group
May 29, 2009
Lynn Melton
PPMS and FMS
(one of these things just doesn’t belong)
Straight from the
Department of the Obvious:
 PPMS processes payroll
 FMS processes financial data
Both need to balance
Straight from the
Department of Confusion:
 The FOCUS:
 PPMS
 FMS
Employee account and W2 focused
General Ledger and Financial Statement focused
 The PROCESSING:
 PPMS
Only on Cut-Off (generally 4 times a month)
 FMS
When Batches are released (every workday)
 The ACCOUNTING:
 PPMS
None (not even in the vocabulary)
 FMS
All (even those pesky Transaction Codes)
 The MECHANISM:
 PPMS
Social Security Number’s
 FMS
Transaction Codes
Straight from the
Department of International Vocabulary:
PPMS
Test Payroll’s/Cut-Off’s
Deduction, Reduction & Contribution
Balances 5 Grosses
Earn Types
IRS
FMS
Batches
Rev/Exp, Assets/Liab, FB
Balances GL’s
Revenue Codes
John Ginther
Reach out….
and Touch your Neighbor
 PPMS
 It’s a Small World after all
 FMS
 Haven’t figured this one out yet 
Those {PESKY} Payroll Batches
Transferring the $’s (..show me the Money!)
Central Bank Account
Transaction Codes (3 different purposes)
Payroll Batches (2 bonus batches)
Payroll Clearing Account
Payroll Cut Off
Central Payroll Bank Account
030
College’s
020
BankCollege’s
Account
010
Bank Account
College’s
Bank Account
3. Total Vendor Payments (Total
Gross Payroll Amount + Employer Costs
- Total Net Pay) are deposited back into
the college’s bank account (effective on
the check date + 1 banking date).
1. Total Local Funds for the payroll are
transferred from the college’s bank account to
the central payroll bank account on the check
date.
Central Payroll Account
(US Bank)
030
College’s
020
Bank
Account
College’s
010
Bank Account
College’s
Bank Account
2. The total State Funds for the
payroll are manually EFT’ed from the
State Treasurer into the central payroll
account (the person reconciling the
payroll initiates this process). At this
point in time, 100% of the dollars to
cover the payroll are in the central
payroll account.
010 thru 290
State Funds
(from State Treasurer)
Vendor Checks &
EFT Vendor
Payments
From PS1245
From PS1425
DEPOSIT INFORMATION:
1. TOTAL STATE FUNDS DEPOSITED TO PAYROLL ACCOUNT - ON CHECK DATE.....
616,410.64
2. TOTAL LOCAL FUNDS DEPOSTIED TO PAYROLL ACCOUNT - ON CHECK DATE.....
399,467.98
3. TOTAL ALL FUNDS DEPOSITED TO PAYROLL ACCOUNT.......................................... 1,015,878.62
#2
#1
TOTAL NET PAY............................................ 590,804.02
LESS HANDDRAWN CHECKS....................
1,574.12
PLUS OVERPAYMENTS..............................
0.00
ADJUSTED TOTAL NET PAY....................... 589,229.90
4. LESS ADJUSTED TOTAL NET PAY WRITTEN...............................................................
5. TOTAL FUNDS DEPOSITED TO DISTRICTS ACCOUNT - CHECK DATE + 1 BANK DAY
6. DISTRICT CASH NET EFFECT (5 - 2).............................................................................
589,229.90
426,648.72
27,180.74
#3
VENDOR TOTAL
2,028.99
DATE TOTAL
153,936.55
PAYMENT TOTAL
182,953.04
DISTRICT TOTAL
426,648.72
#3
Payroll Banking: Overview
 Dollars are transferred into the Central (or System) Payroll Account from the
State Treasurer and each colleges local bank account.
 The total gross payroll and related costs are calculated between “State” and
“Local” funds based on PPMS.
 The “State” portion is manually transferred from the State Treasurer and the
“Local” portion is automatically withdrawn from each colleges account.
 These transfers into the Central (or System) Payroll Account are effective on
the payroll check date to cover 100% of the payroll costs.
 The difference between the total gross payroll and related costs and the net
pay written is calculated (by college). This portion is EFT’d back to each
college to cover their vendor payment liability of employee deductions and
employer cost liabilities.
 This EFT back to the college occurs on the 1st banking day after payday.
Payroll Transaction Codes (TC)
....what exactly are they accomplishing?
 The TC’s generated from payroll can be categorized into 3
major areas:
1)
Recording the transferring of monies between the System
Payroll Account and each colleges local bank account for the
disbursement of employee net pay and payroll related
vendor payments.
2)
The expensing of employee gross pay and employer benefit
costs to the colleges budget accounts.
3)
Recording each colleges vendor liability/expense of monies
collected for each of the various types of liabilities
associated with a payroll.
Payroll TC’s
….where do they come from?
 FMS transaction codes are identified from either the
PPMS Institution Parameter Table or those contained on
the Deduction Code Table.
 The FMS transaction codes to record the transferring of
monies between bank accounts (EFT’s) and expensing
employee costs are contained on the PPMS Institution
Parameter Table
 The FMS transaction codes to record the payroll vendor
liabilities/expenses are contained on the PPMS Deduction
Code Table for each payroll deduction to be processed.
FMS Payroll Transaction Codes
….from the PPMS Institution Parameter Table
#
TC
Dr
Cr
Description
302
002
6510
1110
record EE gross pay/ER cost expense for
non-accrued payroll
303
802
6505
5124
record EE gross pay/ER cost expense for
an accrued payroll
304
804
5124
6510
6505
1110
reverse EE gross pay/ER cost accrual
and expense
305
307
308
309
310
311
040
805
801
800
807
894
1150
1319
1110
1110
5124
0120
1110
1110
5111
5199
1110
0998
bank deposit/withdrawal
record central payroll account treasury funds
record transfers to/from prepaid account
record EFT deposits/withdrawals
record liability at year end (13th/25th month)
record staff months expense
Payroll Batches
…and two bonus Batches to finish the job.
Payroll Batches:
 06 – Payroll
 07 – Accrued Payroll
 08 – 13/25th Month (Year End) Accrued Payroll
 09 – Payroll EFT’s
Bonus Batches:
 01 – Pooled Cash
 51 – Vender Payments (checks only)
Payroll Clearing Account
….790-300-1B99
 The transferring of monies between the central payroll
bank account and each colleges local bank account requires
an account code to monitor these transfers.
 The withdrawal of local funds to the central payroll
account and deposit back of the total vendor liability is
made from/to this account
 The amount transferred back is 100% of the college vendor
payment liability and is then immediately transferred to
each individual vendor account by payroll deduction code.
Process Payroll on Cut-off
(as determined by SBCTC-IT)
 In any given month, there are 4 opportunities to run a
payroll:
 A – paid on 25th
 B – paid on 10th (accrued)
 H – paid on 15th
 M – paid on last working day of month
 In July, there are 2 “bonus” opportunities to run payroll:
 S – paid on 10th (accrued)
 1 – paid on 10th (not accrued)
Central Bank Account
Transaction Codes (3 different purposes)
Payroll Batches (2 bonus batches)
Payroll Clearing Account
Payroll Cut Off
(Simplified) Payroll Processing
 Employee Name & Personal Info get input into PPMS
 W2 produced after calendar year end (January)
 Budget Code input into PPMS
 Total Gross & Employer Costs are charged in FMS
 Misc Deductions & Taxes calculated in PPMS
 Vendor payments/taxes recorded and paid in FMS
The Aftermath:
In just short 2 days….the magic appears in FMS
The multiple payroll batches (to include Batch 01) post to
FMS, recording the payroll expenditures and liabilities.
On payday, 2 days after the FMS posting date, the cash is
transferred from the various sources (State Treasurer and
all the colleges local accounts) to the System Payroll
Account
Batch 51 is posted one banking day after payday.
Payroll: The GOOD
The A, H & M Payrolls and their associated Batches:
 Batch 01 – Pooled Cash
 Batch 06 – Payroll
 Batch 09 – EFT Payroll
 Batch 51 – Vender Payments by Check
The Good: A, H and M Payrolls (cont):
Batch 01 – Pooled Cash
Batch 51 – Vendor Check Payments
Batch 06 - Payroll:




002 (6510/1110*) – Record Employee Gross Pay/Employer Cost Expense (not accrued)
800R (5199/1110) – Record EFT withdrawals to System Payroll Account
801 (1110/5111) – Record transfer of cash & vendor liability
812 (1110/5181) – Records transfer of cash & Health liability
Batch 09 – EFT Payroll:





040 (1150/1151) – Record bank deposit
040R (1151/1150) – Record bank withdrawal
800 (1110/5199) – Record EFT from System Payroll Account & vendor payment
800R (5199/1110) – Record EFT to System Payroll Account & vendor liability
800 (1110/5199) – Record EFT from System Payroll Account & vendor payment
*4310 if State Fund is used
The Good: A, H and M Payrolls (cont):
Batch 01 – Pooled Cash
Batch 51 – Vendor Check Payments
Batch 06 - Payroll:




002 (6510/1110*) – Record Employee Gross Pay/Employer Cost Expense (not accrued)
800R (5199/1110) – Record EFT withdrawals to System Payroll Account
801 (1110/5111) – Record transfer of cash & vendor liability
812 (1110/5181) – Records transfer of cash & Health liability
Batch 09 – EFT Payroll:





040 (1150/1151) – Record bank deposit
040R (1151/1150) – Record bank withdrawal
800 (1110/5199) – Record EFT from System Payroll Account & vendor payment
800R (5199/1110) – Record EFT to System Payroll Account & vendor liability
800 (1110/5199) – Record EFT from System Payroll Account & vendor payment
*4310 if State Fund is used
Payroll: The BAD
The B Payroll and the associated Batches:
 Batch 01 – Pooled Cash
 Batch 06 – Payroll
 Batch 07 – Accrued Payroll
 Batch 09 – EFT Payroll
 Batch 51 – Vendor Payments by Check
The Bad: B Payroll (cont):
Batch 01 – Pooled Cash
Batch 51 – Vendor Check Payments
Batch 06 - Payroll:
 804 (5124/1110; 6510/6505) – Record reversal of Employee Gross Pay/Employer Cost
Accrual & Expense (accrued)
 800R (5199/1110) – Record EFT withdrawals to System Payroll Account
 801 (1110/5111) – Record transfer of cash & vendor liability
 812 (1110/5181) – Records transfer of cash & health liability
Batch 07 – Accrued Payroll:
 802 (6505/5124) – Record Employee Gross Pay/Employer Cost Expense (accrued)
Batch 09 – EFT Payroll:





040 (1150/1151) – Record bank deposit
040R (1151/1150) – Record bank withdrawal
800 (1110/5199) – Record EFT from System Payroll Account & vendor payment
800R (5199/1110) – Record EFT to System Payroll Account & vendor liability
800 (1110/5199) – Record EFT from System Payroll Account & vendor payment
Payroll: The UGLY
The 06B & 06S Payrolls and the associated Batches:
 Batch 01 – Pooled Cash
 Batch 06 – Payroll
 Batch 07 – Accrued Payroll
 Batch 08 – 13th/25th Month (Year End) Accrued Payroll
 Batch 09 – EFT Payroll
 Batch 51 – Vendor Payments by Check
The Ugly: 06B and 06S Payrolls (cont):
Batch 01 – Pooled Cash
Batch 51 – Vendor Check Payments
Batch 06 - Payroll:
 800R (5199/1110) – Record EFT withdrawals to System Payroll Account
 801 (1110/5111) – Record transfer of cash & vendor liability
 812 (1110/5181) – Records transfer of cash & health liability
Batch 07 – Accrued Payroll:
 802 (6505/5124) – Record Employee Gross Pay/Employer Cost Expense (accrued)
Batch 08 – 13th/25th Month Accrued Payroll:
 807 (5124/1110) – Record Employee Gross Pay/Employer Cost Expense (accrued)
 804 (5124/1110; 6510/6505) – Reverse employee Gross Pay/Employer Cost Accrual & Expense
(accrued)
Batch 09 – EFT Payroll:
 040 (1150/1151) – Record bank deposit
 040R (1151/1150) – Record bank withdrawal
 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment
 800R (5199/1110) – Record EFT to System Payroll Account & vendor liability
 800 (1110/5199) – Record EFT from System Payroll Account & vendor payment
It’s all in the GL’s
(…where creative accounting is not part of the strategy.)
Balancing Fund 790
….but why?
 What is Fund 790?
 A revolving account that identifies the funds held for future
disbursement of taxes, vendor payments and other (payroll
related) accounts within the college.


An increase in the fund occurs when an EFT is received in the colleges
local bank account from the central bank account (day after payday).
A decrease in the fund occurs when the vendor payments are made.
 Why does it need reconciling?
 There are deposits
 There are withdrawals
 There are adjustments (hand draws & overpayments)

…need I say more?
Balancing Fund 790
….what do we need?
 FMS Reports
 GA1335 – Program/Organizational Trial Balance (month end)
 GA1409A – General Ledger Trial Balance (month end)
 BM3105 – Pending Payment Report
 PPMS Reports
 PS1245 – Payroll Expense EFT Summary
 PS1425 – Vendor Payment Liability Report
 PS1410 – Payroll Reconciliation Report
Balancing the General Ledger in Fund 790
 GL’s affected by Payroll that need monitoring:
 1110 – Cash
 1312 – Current Accounts Receivable
 1399 – Payroll Handwrites
 5111 – Accounts Payable
 5124 – Accrued Salaries Payable
 5181 – Employee Insurance Deduction Payable
 5188 – Savings Bond Deduction
 5189 – Garnishment Deduction
 5191 – Customer Deposits
 5199 – Accrued Liabilities
 6505/6510 – Accrued/Cash Expenditures/Expenses (should be zero)
Now that I have what they say I need,
….what do I do?
 Compare FMS reporting:
 Using the GA1335 and the GA1409A or GA1332…



Add up all the amounts for a single GL and verify the total equals the GL on the GA1409A
or GA1332
 Why? Because this verifies that you’ve identified all the amounts that equal the
month end balance in the GL.
Identify the account codes that payment has not been made yet
 Why? Because these are not “out of balance”, they are simply timing issues that will
{hopefully} balance upon the next payment (quarter end, court notice, invoice, etc).
 It is preferable that even though these are timing issues, to review the balances and to
verify that the current amounts are correct using the Vendor Payment Reports.
Identify the account codes that payment has been made
 Why? Because these are your potential problem GL’s .
 If the account code balance is zero - Congratulations….and good luck next month.
 If they’re not in balance - let the research begin! Start with your payroll person and
show them the amount the account is out of balance. The amount might be a familiar
amount that would save you time in your balancing.
Now that I have what they say I need,
….what do I do? (cont)
 Compare PPMS reporting:
 Using the PS1425 and PS1410, verify the following:
“Transfer to Vendor Payables” on 1410 agrees to “Vendor Payment Liability” on
1425
 Using the PS1410, compare:
 “EFT Deposit to District Clearing Account” to “Transfer to Vendor Payables” –
the difference, if any, will be an adjustment (hand drawn or overpayment)

 Compare the FMS reports to the PPMS reports
 Verify using the PS1425 & BM3105 that the vendors and amounts agree.
 Notice the timing of payments to when the reports are printed….are you really
“out of balance” or are you simply waiting for a due date to pay (timing).
Life with Handdrawns &
Overpayments
(…ridding your system of those Klingons)
What exactly is happening…
…..and what should I be looking for
 Handdrawns & Overpayments are considered
adjustments in both PPMS & FMS.
 Things to keep in mind when balancing:
 The Central Bank Account holds all the net amounts
until EFT’d or cashed.
 The colleges local account holds all the vendor payments
until paid.
Handdrawn Checks
 Reasons an employee could be issued a handdrawn check:
(always follow college policy)




Was not paid on regular PPMS cut-off and should have been.
Sent to incorrect address.
Check was lost/misplaced/stolen/used as a bookmark.
Check was mutilated by:






Dog/Cat/Bird/Guinea Pig
Shredder
Washing machine
Spilled perfume, bleach, coffee or that evenings dinner
Child with stapler or Crayola markers
Tires (drove over check through mud puddle causing it to rip)
Handdrawn checks put simply…..
 A handdrawn check is drawn on the colleges local bank
account (that’s why handdrawn checks should not be
“canceled” in PPMS – they should be “reversed”).
 A handdrawn input into PPMS is basically recording the
liability that the payroll bank account has incurred – it
owes the college those funds (the net amount).
 When PPMS processes a payroll on cut-off, the college
becomes another vendor, using deduction code (200), and
the net pay transferred to the central bank account is
decreased by the net pay of the handdrawn – because the
college (the vendor) is due those funds.
The adjustment
 When the hand drawn check is written and issued through FMS,
the check should be recorded in FMS using the payroll account
code assigned to the hand drawn check deduction code in PPMS
(200).
 The hand drawn check written on the colleges local bank
account, when posted in FMS, will not charge the employee’s
budget code. This will not occur until PPMS enters the hand
drawn check and is posted to FMS (2 days after cut-off ). The
system will use the deduction code table to charge the
appropriate account code in FMS.
 The entry must be input into PPMS as this affects the 5 Grosses
payroll tracks as well as the year end W2.
 These two adjustments should net to zero and thus leave a zero
balance in the account.
When there are Klingons
 Go back to the originating documents and compare:
 Test payroll/manual calculations to arrive at Net Pay
 A19 given to FMS to produce hand drawn check
 Verify that the amounts were input correctly:
 PPMS has correct Gross and Net Pay and includes all
deductions/reductions/contributions related to hand
drawn.
 PPMS has correctly input this transaction.
 FMS has produced a check for Net Pay.
Overpayments
 When a college should receive a personal check from
an employee:
 Overpayment:




Unable to recover employee’s auto deposit
LWOP was not recorded prior to cut-off
Contract was canceled and payroll was not notified prior to
cut-off
An employee’s contract and/or hours got put on a different
employee’s pay screen.
Overpayments put simply…..
 Note: Only the net amount is collected for an overpayment.
 An overpayment is an amount that the college is collecting
from the employee to pay back the central bank account.
 An overpayment input into PPMS is basically recording the
liability that the colleges local bank account has incurred –
it owes the central bank account those funds (the net
amount).
 When PPMS processes a payroll on cut-off, the college, in a
sense, becomes a “middle man” and the net pay transferred
to the central bank account is increased by the net pay of
the overpayment.
The adjustment
 When the overpayment is received by the college, the increase in
cash should be recorded in FMS using the colleges payroll
clearing account found in the institutional parameters (1015).
 The overpayment that is deposited to the colleges local bank
account, when posted in FMS, will not adjust the employee’s
budget account. This will not occur until PPMS enters the
overpayment and is posted to FMS (2 days after cut-off). The
system will use the institutional parameter account code to
charge the appropriate account code in FMS.
 The entry must be input into PPMS as this affects the 5 Grosses
payroll tracks as well as the year end W2.
 These two adjustments should net to zero and thus leave a zero
balance in the account.
When there are Klingons
 Go back to the originating documents and compare:
 Test payroll/manual calculations to arrive at Net Pay
 Letter given to employee requesting reimbursement
 Verify that the amounts were input correctly:
 PPMS has correct Gross and Net Pay and includes all
deductions/reductions/contributions related to
overpayment.
 PPMS has correctly input this transaction.
 FMS has input the overpayment in the correct account
code (payroll clearing account).
…that’s all folks!