Financial Services Procedure 10 – Reallocating Labor and Benefit Charges Due to Funding Changes and Corrections

External Agency Imposed Changes in Funding: (e.g. Federal Government, North Carolina Legislature, UNC Board of Governors)

Appropriate personnel action forms (EAF, PD-6, 7, 101, HRS-04, etc.) must be prepared, submitted and approved in advance of the effective date for changes in funding made or imposed by external agencies.

In the event that an external agency makes funding changes retroactively, appropriate PD/EAF forms must be prepared, submitted and approved on or before the established payroll due date for the next monthly payroll.

The effective date of the changes in funding must be reflected on the PD/EAF forms so that retroactive adjustments in the distribution of prior months’ labor and benefit charges (also referred to as reallocations) may be made by the Payroll Office personnel.

Reallocations will be permitted for all pay periods beginning with the effective date of the funding change and the date of notification from the external agency.

The Department Head and Principal Investigator must make corrections and submit revised Time and Effort reports to the Office of Contracts and Grants for all periods affected by the retroactive changes.

Internally Mandated Changes in Funding and/or Positions:

Appropriate personnel action forms (EAF, PD-6, 7, 101, HRS-04, etc.) must be prepared, submitted and approved in advance of the effective date for changes in funding and/or positions that are made or imposed by internal management.

In the event that internal management makes funding/position changes retroactively, appropriate PD/EAF forms must be prepared, submitted and approved on or before the established payroll due date for the next monthly payroll. In addition, a written explanation should accompany the PD/EAF forms to provide an appropriate explanation, sufficient to pass the external audit test, as to why the change in labor distribution is being made and to also show that the department is not being negligent. (Paying for labor charges from the wrong fund source could result in audit findings, especially if it is repetitive. Therefore, it is important for the department head to take the responsibility for submitting the correct paperwork in the first place and by the deadlines.)

The effective date of the changes in funding and/or positions must be reflected on the PD/EAF forms so that retroactive adjustments in the distribution of prior months’ labor and benefit charges (also referred to as reallocations) may be made by the Payroll Office personnel.

Reallocations should not be submitted for any period more than 30 days prior to, or subsequent to, the effective date of the change.

The Department Head and Principal Investigator must make corrections and submit revised Time and Effort reports to the Office of Contracts and Grants for all periods affected by the retroactive changes.

Assumption of Risk Policy:

Occasionally formal notice of a new award or continued award can be delayed. In some cases when the probability of funding is clearly established, it is in the best interests of the investigators and UNCG to either initiate or continue the work before the formal notice arrives. To accomplish this, one can request that the Associate Provost for Research assume the risk for the funding. (Assumption of Risk Policy)

Correction of Errors:

It is recognized that the growth of the University’s employee base, together with the surge in contract/grant activity and acquisition of other external funding, has contributed greatly to the volume of personnel forms prepared and submitted for action. Despite the best efforts of departmental and unit personnel who prepare and process PD/EAF forms, it is recognized that an error-free environment is unrealistic. These procedures address how errors are to be corrected.

If the error was made by the originating department/office:

  • Revised PD/EAF forms must be prepared, submitted and approved for corrections to the labor and benefit distribution charges.
  • These forms must be submitted in accordance with established payroll deadlines so that the correction can be made during the next scheduled payroll cycle.
  • If applicable, revised Time and Effort Reports should be submitted to the Office of Contracts and Grants for the affected month.

If the error was made by an office other than the originating office:

  • Written notification (email is permissible) must be made by the Banner fund holder to the Payroll Office by the end of the month following the month in which the payroll error was made.
  • This notification must be submitted in accordance with established payroll deadlines so that the correction can be made during the next scheduled monthly payroll cycle.

Reporting:

A Departmental Labor Distribution Report will be generated from HRS and posted on a monthly basis to each Banner fund. The report can be viewed on Eprint.

The HRS report will reflect all of the labor and benefit charges that are reflected in summary form on the Banner report. The charges will be reflected in detail by employee and position number.

Each Banner fund holder should utilize the HRS report to verify the accuracy of salaries and benefits charged to his/her Banner fund.

Responsibility for Doing Reallocations:

The Payroll Office will be responsible for doing the reallocations prior to the next payroll being run, subject to receipt of appropriate documentation supporting the changes in funding by the established due dates.