Retroactive Payroll Policy Change - Phase II Becomes Effective July 1, 2010
The Payroll Department has announced phase II of the gradual rollout of a policy change that will delimit payroll transactions. Phase II will begin July 1, 2010.
Since July 2007, when the SAP Payroll System went live, there had been no limit on how far into the past changes could be made to payroll transactions and payroll charge data, referred to as retroactivity. However, when investigating the cause of payroll charge and GL transaction errors, Payroll found that a significant number of errors occurred when retroactivity took place.
These errors can result from the allocation of funding to or from an inactive or locked account, in addition to other anomalies, resulting from inadvertent retroactive transactions.
Limiting the window of time to directly correct payrolls through the use of retroactive payrolls will decrease the frequency of errors and add to the stability of accounting data for closed fiscal years. In addition, a payroll's processing time will be reduced by limiting adjustments going back to prior fiscal years.
Some situations, such as PAR corrections and audit findings or unallowable charges on a grant prior to the cutoff, will be treated as exceptions as deemed necessary. Payroll is developing criteria for exceptions and the process to request an exception.
Phase I was implemented January 31, 2010, with no more retroactivity prior to June 30, 2008. Phase II will limit retroactivity to June 30, 2009. Phase III of the project is expected to roll out on January 31, 2011, allowing no more retroactivity prior to June 30, 2010.
After Jan. 31, 2011, seven months becomes the new standard practice to close prior fiscal year payroll activity.
For more information about the revised retroactive payroll policy, please contact the Payroll Department at firstname.lastname@example.org.