Administrative Policies and Procedures Manual - Policy 2645: Accounting for Labor Expenses

Date Originally Issued: 11-01-1991
Revised: 07-01-2004, 01-01-2008

Process Owner: University Controller and HSC Senior Executive Officer for Finance and Administration

1. General

Labor expenses (salaries and wages) are charged to the Banner indexes indicated by the department on hiring or time-reporting documents, such as Electronic Personnel Action Notices (EPANs), Banner Time Entry forms, Banner Labor Distribution Change Electronic Personnel Action Forms (EPAFs) and Non Standard Payment forms. As part of the overall responsibility for administering budgets and other funds, departments are responsible for verifying the availability of budget and the accuracy and appropriateness of labor charges.

2. Financial Services Responsibilities

Within the University Financial Services Office, the University Payroll Office is responsible for accurate payroll processing, and the accounting offices are responsible for financial accounting for labor and other expenses. The University's accounting offices include Main Campus and Health Sciences Center (HSC) Unrestricted Accounting, and Contract and Grant Accounting.

3. Reports

The following reports are available online through ePrint or Hyperion to assist departments in managing and reconciling their labor and benefit expenditures.

• FOH0001 & FOH0002 - The Operating Ledger Detail and Summary Reports list total charges for each payroll during the month and can be generated using a variety of parameters and grouping options.
• FSH0001 - The Salary Labor and Benefits Distribution Report lists payroll transactions for the month in detail and can be generated using a variety of parameters and grouping options. 

4. Department Responsibilities

Departments are responsible for verifying that labor expenses are posted accurately and are charged to the appropriate Banner Index. 

4.1. Index Reconciliation

In order to verify the accuracy of labor charges, the department should reconcile the indexes regularly and at a minimum each month. To do so, the department may calculate salary charges according to the internal records and compare these amounts to accounting and payroll reports.

4.2. Appropriate Index

It is the department's responsibility to ensure that funds are used appropriately and that labor expenses are charged to the appropriate index.

5. Correcting Payroll Transactions

If a department discovers that a payroll transaction was either posted inaccurately or should have been charged to another index, the department must initiate a labor redistribution form (PZAREDS).  This form and supporting documentation will be kept on file in the department.  The appropriate accounting office will have final approval of the labor redistribution.