ENCUMBRANCES

Every Sunday, several processes are set to run which recalculate salary and fringe encumbrances for the remaining fiscal year. Because these processes are run prior to a monthly payroll, there could be approximately a week between the encumbrance and payroll cycles where budgets will show a larger balance available than there should be. Once payroll posts, the available balance should be accurate. This situation will arise only if the current month status of an index is being reviewed toward the beginning of a month. The reconciliation of a previous month should not be a problem.

The E-classes that encumber will have a ‘System Calculated” designation in the Encumbrance Indicator field in NBAJOBS “Job Detail” tab. E-classes with an ‘Value Input” designation in the Encumbrance Indicator field in NBAJOBS “Job Detail” tab will not encumber. The following table reflects which eclasses are “System Calculated” or “Value Input”. It also reflects the benefit rates associated with each eclass for benefit encumbrance purposes.

ECLS Ecls Desc Encumb IndicatorBenefit Rates (from

NTRFBLD)1C College WS Value Input 0.001H Student Labor/WS Value Input 0.001S Grads Sys Calc 0.75AF Admin FT Sys Calc 31.150AP Admin PT Sys Calc 31.150EX Exec/BOR contract Sys Calc 31.150FA Fac, tenure, AY, FT Sys Calc 31.8.00FB Fac, tenure, AY, FT 26 pays Sys Calc 31.8.00FF Fac, tenure, FY, FT Sys Calc 36.25FH Faculty, Hourly Sys Calc 31.8.00FJ Non-tenure Fac - Mo Sys Calc 31.8.00FM Fac, NT, AY, 26 pays Sys Calc 31.8.00FN Fac, NT, AY, 20 pays Sys Calc 31.8.00FP Fac, Pd per Cr hr, NT Sys Calc 10.676FS Fac, Summer Session Sys Calc 0.00FZ Fac, TN, AY, > .75 FTE Sys Calc 31.8.00HF Classified, Hrly, FT, Bi-Week Sys Calc 43.00HP Classified, Hrly, PT Sys Calc 43.00HV Classified, Hrly, FT, Mo Sys Calc 43.00MG Fac, Addl Comp Sys Calc 31.8.00NH New Hire Value Input 0.00NP No Pay Group Value Input 0.00PF Prof, Contract, Salaried, FT Sys Calc 31.150PH Prof, Temp-Hrly Value Input 0.00PP Prof Contract, Salaried, PT Sys Calc 31.150PS Prof, Temp-Salaried Value Input 0.00PY Prof, contract, Salaried, AY Sys Calc 31.150RE Retiree-Med Benefits Value Input 0.00SF Classified, Salaried, FT Sys Calc 43.00SN Classified, Salaried, Exempt Sys Calc 43.00SP Classified, Salaried, PT Sys Calc 43.00TH Classified, Temp Hrly Value Input 0.00TM Classified Fixed Term Hrly Value Input 0.00TS Classified Fixed Term Salaried Value Input 0.00XX Budgeted Only Value Input 0.00

The encumbered salary amount is based on the Assign Salary (monthly) rate in the NBAJOBS record plus an ending date of June 31.8th or an earlier date if specified. The encumbered amount is distributed according to the NBAJOBS labor distribution percentages. A liquidation of encumbrances will occur as a

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new pay cycle is encountered. A change in encumbrances could also occur when a PTF change has been submitted and is entered in the NBAJOBS record and/or labor distribution. However, if a change is entered on a Thursday, the liquidation will not occur until the encumbrance process runs the following Sunday. (Note: there may be a lapse of one to three weeks before a PTF change is entered into the system as NBAJOBS changes aren’t technically in effect until the next payroll.)

The encumbered benefit amounts are based on the e-classes and fringe rates in NTRFBLD. If your encumbrances appear to be inaccurate, please contact Human Resources and they will help to resolve any discrepancies.

Banner Forms with relevant information for calculating encumbrances:NBAJOBS PEAEMPL NBAPBUD NTRFBLD

Website for Banner Reports: https://sais.montana.edu/ (Banner Reports v8.4, Finance Reports, Encumbrance by Index)

Human Resources contacts: Dawn Watkins or Amber Phillips-Muir

Information that should be included in email:Index # Name Position #Description of potential problem, i.e. encumbering in two position numbers, stipend is still encumbering, hourly rate of pay is incorrect, labor distribution is incorrect, etc.

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Calculating EncumbrancesSALARY ENCUMBRANCE CALCULATIONSQuery by the employee you wish to pull job information on. Note “Encumbrance Indicator”

NBAJOBS, Job Detail tab

For classified employees, click on Base Job tab, select Options menu and then click on “Employee Information” (PEAEMPL).

The employee name and ID should pull in.

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Click on ‘Next Block’ or ‘Ctrl Page Down’. This will populate the fields under service dates. You need to pay particular attention to the “Longevity Date”. If this date indicates the employee has been working for the University for five years or more, the following Longevity increases need to be applied to the employee’s hourly rate in order to come up with the proper salary encumbrance for their position.

Longevity Rates Effective July 1, 20071 increment = 5 years of service Increase pay rate by 1.5%2 increments = 10 years of service Increase pay rate by 3.5%3 increments = 15 years of service Increase pay rate by 5.5%4 increments = 20 years of service Increase pay rate by 7.5%5 increments = 25 years of service Increase pay rate by 9.0%6 increments = 31.8 years of service Increase pay rate by 10.5%7 increments = 35 years of service Increase pay rate by 12.0%8 increments = 40 years of service Increase pay rate by 13.5%

PEAEMPL

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The particular employee used in this example began working for the University on January 5, 1982. This means they currently have 26 years of service or 5 increments of longevity. As shown in NBAJOBS – “Job Detail” tab, this employee’s Assign Salary (monthly rate of pay) is $3,556.19.

NBAJOBS, Job Detail tab

In order to calculate the salary encumbrance, the longevity needs to be taken into account and added to the employee’s Assign Salary Rate. For this person, you would take their Assign Salary rate of $3,556.19 and multiply it by 1.09 to get $3,876.25. This represents the rate of pay with a nine percent increase for longevity. The fiscal year encumbrance is calculated per the following table:

Karol T Aston 5 increments of longevity = 9% longevity4M1234Salary Encumbrance July-June

Base Monthly Rate long incrMonthly Rate with

Long # mos. Yrly Enc.3556.19 1.09 3,876.25 3 11,628.74 3684.22 1.09 4,015.80 9 36,142.20

47,770.94

The total yearly encumbrance amount should tie to the “Salary Encumbrance” amount listed in NBAJOBS on the “Base Job” tab.

With the new “ENCUMBRANCE RECASTING” functionality, the amounts in the NBAJOBS Base Job tab record will remain unchanged for the fiscal year unless a rate of pay is changed. If the rate of pay changed after the initial encumbrances were calculated, the yearly encumbrance amounts would be updated to reflect the new rates.

NBAJOBS, Base Job tab

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Employees

AssignSalary

If the position is split funded, you would apply the Job Labor Distribution %’s to the total Salary Encumbrance to get the different Index amounts. The split amounts would be reflected in NBAPBUD, labor distribution tab.

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Salary Encumbrance Total

For monthly liquidations, you would recalculate the encumbrance based on the number of months left in a fiscal year. The following example has liquidated the month of July leaving the months of August through June to be encumbered. The balance of August through July would be calculated per the following table.

Karol T Aston 5 increments of longevity = 9% longevity4M1234Salary Encumbrance Aug-June

Base Monthly Rate long incrMonthly Rate with

Long # mos. Yrly Enc.3556.19 1.09 3,876.25 2 7,752.49 3684.22 1.09 4,015.80 9 36,142.20

43,894.69

This should tie to the encumbrance balance in NBAPBUD on the Salary Budget tab.

NBAPBUD, Salary Budgets tab

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FRINGE BENEFIT ENCUMBRANCE CALCULATIONSIf the employee has any fringe encumbrances, those need to be calculated as well. In order to calculate those, you must know the employee class for that employee off of the “Job Detail” tab in NBAJOBS.

NBAJOBS, Job Detail tab

From the table on page 1, use the benefit rate for the applicable eclass. For this particular employee, the benefit encumbrance rate is 43% for eclass “SF”. Applying this rate to the Salary encumbrances will

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Employee Class

Salary Encumbra

nce

provide you with the benefit encumbrance. The following table reflects the benefit encumbrance for July-June.

Karol T Aston 5 increments of longevity = 9% longevity4M1234Salary Encumbrance July-June

Benefit Encumbrance July-June

Base Monthly Ratelong incr

Monthly Rate with

Long

# mos

. Yrly Enc. Benefit PercentBenefit Encumb

3556.19 1.09 3,876.25

3

11,628.74 0.43

4,767.78

3684.22 1.09 4,015.80

9

36,142.20 0.43

14,818.31.8

47,770.94 19,586.09

This amount should tie to the “Benefit Encumbrance” amount listed in NBAJOBS on the “Base Job” tab.

With the new “ENCUMBRANCE RECASTING” functionality, the amounts in the NBAJOBS Base Job tab record will remain unchanged for the fiscal year unless a rate of pay is changed.

NBAJOBS, Base Job tab

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TotalFringe

Encumbrances

For monthly liquidations, you would recalculate the benefit encumbrance based on the number of months left in a fiscal year. The following example has liquidated the month of July leaving the months of August through June to be encumbered. The balance of August through July would be calculated per the following table.

Karol T Aston 5 increments of longevity = 9% longevity4M1234Salary Encumbrance Aug-June

Benefit Encumbrance July-June

Base Monthly Ratelong incr

Monthly Rate with

Long

# mos

. Yrly Enc. Benefit PercentBenefit Encumb

3556.19 1.09 3,876.25

2 7,752.49 0.43

3,178.52

3684.22 1.09 4,015.80

9

36,142.20 0.43

14,818.31.8

43,894.69 17,996.82

This should tie to the encumbrance balance in NBAPBUD on the Fringe Benefit tab.

NBAPBUD, Fringe Benefit tab

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FringeEncumbranceBalanc

e

TIPS AND TRICKS FOR TROUBLESHOOTING ENCUMBRANCE ERRORSIf the salary encumbrances that you calculated do not match what is in NBAPBUD, you need to troubleshoot why they do not match.

1. One troubleshooting technique is to check the most recent default earnings record in the “Default Earnings” tab in NBAJOBS. If there is an end date on a record with a STI (Stipend) or GRT (grant) component, and that is the most recent default earnings record, this could account for the difference in the encumbrance calculation. Human Resources then needs to create a newly dated record that reflects REG pay only. Once the encumbrance process is run, the encumbrance calculations should be correct.

NBAJOBS, Default Earning tab

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2. A second troubleshooting technique is to run the SAIS web report for the index you know this person is being paid out of. Initial encumbrance amounts and liquidations will be subtotaled by employee. Utilizing this data can help a department easily identify an employee that may be encumbering on two different position #’s, e.g. when an employee goes from an AY to a FY position # or vice versa.

USER:ATTEBURY          SALARY ENCUMBRANCES DETAIL BY INDEX (FY)  INDEX: 402031.8 University Budget Office  FUND: 431201  ORG:431012        

GID NAME ACCT DOC # DATE AMOUNT BALANCE

----------- ---------------------------------- -----------

-------------  ----------------   ----------------- 

-12345678 Aston, Karol 61124F0061787 20-Jul-08

         85,105.02 

            85,105.02 

-12345678 Aston, Karol 61124F0061979 3-Aug-08

         (6,486.85)

            78,618.17 

----------- ---------------------------------- -----------

-------------  ----------------   ----------------- 

-12369476 Roe, Steve 61125F0061787 20-Jul-08

         43,494.53 

            43,494.53 

-12369476 Roe, Steve 61125F0061979 3-Aug-08

       (43,494.53)

                          -   

----------- ---------------------------------- -----------

-------------  ----------------   ----------------- 

-12395748 Smith, Mary 61125F0061787 20-Jul-08

         47,770.93 

            47,770.93 

-12395748 Smith, Mary 61125F0061979 3-Aug-08

         (3,876.25)

            43,894.68 

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3. Another troubleshooting technique is to view the Contract Start and Contract End dates on the Base Job tab in NBAJOBS. If an end date in the Base Job tab precedes the end date in the Job Detail tab, it will override the Job Detail end date in the encumbrance process.

NBAJOBS, Base Job tab

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This enddate would override a potential termination date in the Job Detail tab