GAAP Forms - OSF Form J-1 Instructions

J. ACCRUED PAYROLL CONVERSION PACKAGE

• OSF Form J-1: Accrued Payroll Summary (.xls, 17 KB)

I. PURPOSE AND OBJECTIVES

The CAFR presents a liability for employees' services rendered but not yet paid as of June 30.  This amount represents accrued payroll.  In September, OSF will distribute a listing of payrolls using a prior pay period code.  Agencies should reconcile this printout with agency records and report the appropriate accrued payroll amount to OSF.

II. AGENCY ACTION REQUIRED

A. Obtain and review the OSF printout "Accrued Payroll - CAFR".

B. Carefully read the key terms in Part III.

C. The Accrued Payroll Summary form (summary) should reflect amounts as of close of business on June 30.

D. Round all dollar amounts to the nearest whole dollar.

E. All working papers are subject to audit by the State Auditor & Inspector (SA&I).  The agency is required to keep a copy of the completed summary form and all associated working papers for three years after the completion of the SA&I audit.

F. The person who completes and signs the summary form should keep a copy.  A financial reporting analyst will contact this person if there are any questions.

G. If needed, call your agency’s financial reporting analyst for guidance.

H. Return the completed summary form to OSF no later than the due date shown on the form.  If you can return it earlier, please do so.  Mail should be sent to the Office of State Finance, 3812 N. Santa Fe Ave., Suite 290, Oklahoma City, OK 73118.  Completed summaries may also be emailed to your financial reporting analyst.

I. If the summary form does not apply to your agency, check the box in the upper left portion of the summary, complete item (2) and return it to OSF.

III. KEY TERMS

A. Accrued Payroll consists of amounts owed to employees for their services that were both:

• Earned on or before June 30, and
• Paid for or will pay for after June 30.

Accrued payroll includes:

• Supplemental payrolls
• Overtime payrolls
• Shift differential payrolls
• Longevity payrolls

• Mid-month, bi-weekly, or other payrolls not coinciding with the end of the month

  Note: Payrolls that do not coincide with the end of the month must be prorated to allocate the correct portion to the fiscal year ending June 30.

• Termination payrolls (annual leave paid in July to employees who terminate employment in June
• Cafeteria plan amounts
• Fringe benefits that are related to the above payrolls

Accrued payroll does not include amounts owed for:

• Annual leave (This is reported in the compensated absences conversion package.)
• Sick leave
• Compensatory time
• Any other leave

B. Fringe Benefits must be included in computations to arrive at the total accrued payroll.  These fringe benefits include:

• Employer's share of FICA  

Note: This is the actual employer's share of FICA paid for the above accrued payrolls.  It may or may not equal 7.65% of gross salaries since cafeteria plan amounts are not subject to FICA but are included in gross salaries. 

• Employer's share of retirement contributions
• Employer's share of employees' insurance premiums
• Unemployment insurance compensation tax

C. Reconciling Items include payrolls for which the OSF Accrued Payroll - CAFR Report does or does not include as a result of pay period coding errors on payroll claims, and for payrolls recorded by OSF after the date of the report, August 31.
 

IV. SPECIFIC INSTRUCTIONS

A. Preparation of the Data

Note: Do not complete this conversion package until you receive and reconcile to OSF's accrued payroll report.  This report will list accrued payrolls that OSF has recorded through August.  Any reconciling items must be explained on the summary form.  

1. Prepare schedules as needed to calculate and total the dollar value of each of the following items, as defined on a payroll claim, for all employees and for all types of payrolls that have been earned but not paid as of June 30:

The total of these items is equal to "total claim cost".
 

2. Prepare calculations as needed for those payrolls that do not coincide with the fiscal year ending June 30.  The total claim cost of these unique payrolls must be prorated by:

• Dividing the number of days in the pay period before June 30

by

• the total number of days in the pay period,

and then,

• multiplying by the total claim cost
  

3. Transfer the total of steps 1 and 2 above to the summary form.  Complete the summary as described below and submit it to OSF.
 

B. Completing the Accounts Payable And Encumbrance Summary Form

1. Enter the agency CAFR code, name, and funds/accounts to be included on the summary.

2. Provide the name, title, phone number and date for each person who completes and approves this summary form.  The finance officer or executive director should approve and sign the form before sending it to OSF.  Keep a copy of the form.  When submitting the form via email it should come from the address of the approving officer.  This will act as an implicit electronic signature verifying the form has been reviewed for validity, accuracy and completeness.

3. Enter total of accrued payroll per agency records from item A3 above.

4. Enter the total of the accrued payroll as presented on OSF's Accrued Payroll Report from PeopleSoft.  

5. Describe and enter the amounts for any reconciling items that are needed so that agency records and OSF's accrued payroll report will agree.

6. Add and subtract your reconciling items to the OSF report total to arrive at an adjusted total.

7. Provide comments or explanations for any unusual items or circumstances.

C. Working Papers

The agency should keep any documents that support data on the summary.  For example:

• Detail schedules summarizing unemployment compensation tax, state share retirement, state share FICA/MQFE, annuities, state share insurance, cafeteria plans, and gross pay.
• Detail schedules prorating unemployment compensation tax, state share retirement, state share FICA/MQFE, annuities, state share insurance, cafeteria plans, and gross pay.  (Only for those payrolls whose pay period ending date is greater than June 30.)