Allocated Fringe Process
Certain funds use an allocated rate rather than actual when charging fringe costs. These are 133, 135, 142, 144, and 161 funds. UW System establishes the rates for the gift and federal funds but 142 is done by the College of Agriculture. (Currently, funds 135 and 161 also used the established rates for gifts and grants.) When the allocated rate is used, a pool account is used at a Processing Center level to post the actual fringe costs, and the transferred allocated dollars from the individual accounts to cover these costs. Actual fringe costs are never charged to the individual accounts when the fund is using an allocated rate. This process is only performed for the former PPC campuses and System Administration. The Warf campuses use local processes to adjust the fringe cost to the allocated rate for their gift and federal funds.
The individual accounts are automatically charged allocated fringe costs at the end of the month by multiplying the salary activity that occurred during that month times the appropriate allocated rate. An offset is done to the funds pool account (account 0001 is used for all but 142 which uses account 9997). Each 133 and 144 account needs to have the fringe benefit indicator on the ES (extramural support) file set to Y in order to have the automated fringe process activated. The ES file is managed by Graduate School Research and Sponsored Programs. Any differences between allocated rate and actual fringe costs are taken into consideration when building the new allocated rates each year.
There are eight (8) major salary categories: Academic, Classified, Graduate Assistants, Research Assistants, LTES, Post Doc Fellows, Under Graduates and/or Fee Graders, and Students. All salary class codes are grouped into one of these categories. Each category has its own fringe rate.
Encumbrances are created automatically by the system for funds that use an allocated rate (except for fund 135). The current requisition number structure is a nine (9) digit number starting with 92 - then the fund - then the account number. Thus account 144 AZ24 would have a requisition number of 92144AZ24.
The encumbrances are created under the UDDS coding of 0000000 with an activity code of 0. This is a blanket UDDS so that one requisition can be created for the account rather than one for each UDDS authorized to spend on the account. The class code on the requisition is 1800. Again, this is a blanket class code accepting any of the allocated rate class codes.
The encumbrances are created at the time the first salary activity occurs on the account, either through a salary encumbrance or a salary payment.
As of July each year, all fringe requisitions are updated to the new fiscal year. These requisitions remain on the file until the grant and/or gift account is closed. Any transaction generated by the automated fringe benefit process (payments or requisition adjustments), uses the new rates as of July (October for 142). All transactions processed after the end of June use the new fiscal year designation regardless of what fiscal year generated the costs. This includes manual fringe benefit adjustments or the allocated fringe process.
The requisitions are automatically updated daily based on any salary activity that occurs on an account whether it be expenditures or an encumbrance change.
The end of the month fringe process uses the allocated class code of 1800 for Academic and Under Grads/Fee Graders; class 1801 for Graduate Assistants; class 1802 for Research Assistants, and class 1803 is used for Post Doc Fellows. The allocated class code 1900 is used for classified staff and 1901 is used for LTES. The student allocated class code is 1902.
When the fringe costs are calculated at the end of the month, the salary dollars for which they are based on will be referenced in the description field of the transaction.
If the allocated rates change, it will be effective on July 1 for all funds but 142. Fund 142 is on a federal fiscal year and those rates are effective October 1 each year. The outstanding balance on the fringe requisitions is adjusted at the end of June (September for fund 142) to reflect the new rates.
In using an allocated rate system, an assumption is made that it is not possible or practical to adjust an allocated rate to actual rates for specific individuals.
The concept of an allocated rate is to recover the Universitys share (employers share) of the total costs for that benefit category (e.g., health insurance) for each of the salary categories. Any under or over recovery is adjusted for in the next years rate.
If you still have questions, you should contact the accountant in charge of the account if 133 or 144. In the case of 161 funds, you should contact UW System Administration Trust Funds.
If the adjustment is approved however, a non-salary transfer form should be completed and sent through the normal channels. The normal process is to make a partial payment for the credit/charge to the individual accounts fringe requisition, and an offsetting miscellaneous entry to the pool account referencing the requisition number. Be sure to use the original UDDS, activity and class code on the transfer, not the blanket udds or class code.
If an account has fringes and overhead charged, you need to take into consideration the effect your adjustment will have on these two processes. Since the overhead and fringe process is automatic, the system will generate an entry each month for any cash activity that takes place on the account. The only way the automatic overhead and fringe process will not generate an entry would be to have the fringe indicator and the overhead base changed on the ES file. You probably need to talk to the accountant in charge of the specific account.
View rates at Research and Sponsored Programs.