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Encumbrance Calculation
PeopleSoft calculates encumbrance based on a daily rate for the
employee for the remaining fiscal year. Encumbrance release is
calculated following every pay period for the employee pay-groups
included in that payroll only.
The following are formulas for calculating encumbrance for
bi-weekly and monthly employees:
Monthly
Salary X 12/365 = Daily rate X the number of days left in the
fiscal year
Bi-weekly
Standard hours X Hourly rate X 52 weeks/365 Days X the number
of days left for the fiscal year.
If there is a termination row to the position for an employee,
the encumbrance will stop at that point.
If there is a new funding row on the department budget table to a
new cost center on a given date, the encumbrance will follow those
dates to the particular cost centers involved.
If the encumbrances for bi-weekly employees (particularly student
employees) are too high, check the standard hours on the job data
panel for those employees to verify that their standard hours and
FTE are showing correctly. If adjustments need to be made,
contact the HR department for assistance.
The reason that the actuals and encumbrance amounts will not
equal the final budget amount for the monthly employees on the BOB
report is because we pay monthly employees the same amount
regardless of how many days are in any given month. When the
encumbrance release is calculated, it only releases the encumbrance
for the number of days in a current month, so the encumbrance
release will vary. The actuals will not include longevity paid
from the state account. Local account longevity will appear on
a separate line on the BOB report for the cost center.
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