Under the modified accrual basis of accounting, payroll obligations incurred as of June 30 but paid in July must be accrued (recorded in the thirteenth financial accounting period). Automated year-end payroll accrual and accrual reversal entries are created from current fiscal year payroll transactions processed through the NCAS Central Payroll interface. The automated accrual process is available only to agencies that utilize the Central Payroll system and participate in the statewide NCAS payroll interface (see Payroll Accrual - Statewide Health Benefits and Payroll Interfaces).
Agencies that do not post Central Payroll transactions to the NCAS system through the payroll interface must record accrual transactions by entering manual journal voucher documents in Budgetary Control as closed period adjustments with an effective date of June 30 and a "33" in the third and fourth positions of the document ID (see Year-End Accruals - Processing Special Journal Voucher Entries ).
Posting the Payroll Accrual Transactions
The NCAS Central Payroll interface will post all July payroll activity to the NCAS system on July 30 with an effective date of 07/25. The system programmatically creates and posts accrual and accrual reversal transactions for July payrolls processed with a payroll ending date equal or prior to June 30 when the actual July payroll batch is generated. The accrual batch is processed as a closed period adjustment with an effective date of June 30. The automated accrual reversal will post to the SBM file with a future date of 06/30.
Gross wages are summarized and post as liabilities in the Accrued Salaries and Wages account, 211210. Employer FICA, retirement and disability costs are recorded as liabilities in the Withholdings and Employer Matching Payable account, 211220. The centers to which the liability accounts post are the same as those generated by the actual payroll interface posting..
The entries generated by the payroll accrual process are demonstrated below. In the example provided, state appropriated salaries are accrued. XX represents the agency's ID number. The system date, July 28, is the date the actual payroll is processed in the NCAS system.
July NCAS Payroll Interface Entry:
Fiscal Year Payroll Accrual Entry:
Fiscal Year Payroll Accrual Reversal Entry:
Accrual transactions posted to the system may be examined by reviewing the agency's General Ledger Batch Proof List report.
Verifying the Payroll Accrual Batch
When the July payroll and payroll accrual batches are created and posted through Financial Controller to the General Ledger, the Payroll Interface and Payroll Interface Error Listing reports are automatically generated. Agencies should verify the batch totals and detail transaction data to determine the accuracy of the posting transactions.
The payroll batches are processed only once and adjustments to the accrual entry must be manually recorded with journal voucher documents entered in Budgetary Control as closed period adjustments with an effective date of June 30 and a "33" in the third and fourth positions of the document ID