payroll: Payroll Accounting Adjustments

[paynews <paynews@uoregon.edu>]

Memorandum


To: Vice Presidents, Deans, Directors, and Department Heads
Campus Budget Managers

From: Laura E. Hubbard, Associate Vice President for Budget & Finance

Subject:Payroll Accounting Adjustments

Effective March 1, 2008, the university is implementing new policies 
regarding the allowability of payroll accounting adjustments, otherwise 
known as payroll redistributions. Payroll accounting adjustments will now 
be limited to the current quarter of the fiscal year and must not be 
retroactive past that period. The purposes of this change are to comply 
with federal guidelines regarding financial management, to ensure accurate 
financial reporting, and to enhance financial transparency. This policy 
change was discussed with campus budget managers on February 26.

As part of its quarterly reconciliation and billing process, the Office of 
Research Services and Administration (ORSA) distributes activity reports 
for Principal Investigators (PI) to certify that salaries and wages 
charged to sponsored projects are consistent with the effort actually 
spent working on the projects. The data for this Effort Reporting is drawn 
from Banner and is based upon the monthly payroll process.

A recent review by the OUS Internal Audit Division raised concerns related 
to Effort Reporting. Specifically, some quarterly labor totals that were 
certified by PI's did not match payroll records pulled from Banner later 
in the year. Payroll accounting adjustments, processed through the online 
Banner process PHAREDS, were processed after the Effort Reporting 
certification and caused a variance in the labor reported. Failure to 
comply with UO and federal policies (which limit retroactive cost 
transfers to the previous 90-day period) represents a substantial risk to 
the university and its research programs.

Additionally, the UO is required to provide a quarterly financial report 
to the State Board of Higher Education. We have found that retroactive 
payroll accounting adjustments create difficulties in our periodic 
financial forecasting and reporting to the Board. Retroactive adjustments 
also complicate our internal financial planning and reporting. Further, 
these adjustments, while sometimes necessary, overall do not represent 
prudent financial management practice.

To prevent further issues, payroll accounting adjustments will be 
restricted to the currently open quarter. For example, an adjustment 
processed today can only make changes retroactive to January 1, 2008. 
The Business Affairs Office will lock out users from making payroll 
accounting adjustments on the day we close each fiscal quarter. If 
adjustments are needed that go back farther than the beginning of the 
active quarter, the department will need to request those adjustments 
through ORSA (for adjustments to grant funds) or BAO Payroll (for all 
other funds). Those requests will require a written justification and an 
authorization from the Dean, Director, or Department Head. The Payroll 
Accounting Adjustment form is located on the BAO website at 
http://baowww.uoregon.edu/forms/paa.pdf.

If you have any question or concerns, please contact Paula Roberts, 
Associate VP for Research/Director of ORSA, at 6-5131, 
http://research-services@orsa.uoregon.edu or Judy Duff, Payroll Manager, 
at 6-1104.

Thank you for your attention to this important matter
To view all payroll messages posted since January 2008 visit our
archive at http://www.uoregon.edu/~paynews/payroll