ctcLink Accounting Manual | 40.10.40 Inter-Fund Expenditure Transfers

The practice of transferring large amounts of funds between accounts (“T” transfers), primarily to cover employee compensation costs, has created transparency, accountability and funding questions from oversight agencies.

In addition, because salary expenditure amounts are used to allocate salary increase funding, concerns have been expressed that colleges might “game” the allocation system by charging more to state funds than they actually spend by year-end close.

The Business Affairs Commission adopted a salary transfer solution meeting the needs of legislators, while not creating a significant administrative burden on SBCTC and the community and technical colleges.

This required adding five new account codes to identify the employee type of a ‘T’ transfer. Each ‘T’ transfer will have to identify to an account code to differentiate how the transferred funds are being used.

The new accounts will differentiate data when it goes to AFRS/One Washington and distinguish between classified, exempt, faculty, other (for tech colleges) and student employees.

Colleges are:

• required to input the number of staff months as an additional data point.
• expected to consistently use the Fund, Appropriation Index, Class and State Purpose.

40.10.40.1.a Salary Transfers Journal Source

When creating journal entries for the transfers of salaries as described below, colleges must use the Journal Source: PTR – Payroll Transfer. This will allow an easier identification and reconciliation of the transfers. We also recommend adding the original journal ID in the reference field.

40.10.40.1.b Salary Transfer Required Chartfields

FIELD	DESCRIPTION
Business Unit	Required
Operating Unit	Required
Account	See below
Fund	Required
Appropriation Index	Required
Class	See below
Department	See below
Project ID	See below
State Purpose (IT)	Required
Amount	Required
Stat	SMO
Stat Amount	Required

40.10.40.1.c Salary Transfer Accounts

When transferring salary expenditures, only the following five (5) accounts may be used (colleges are always welcome to reverse the original account and record the correct account):

ACCOUNT	DESCRIPTION
5081012	All employees/positions which have been defined as exempt by chapter 41.06 RCW, by the Washington Personnel Resources Board and by the governing board of the institution excluding faculty, graduate assistants, students, and higher education other.
5081014	All employees/positions whose primary responsibilities are teaching, research, public service, or a combination of these, including librarians and counselors designated as faculty.
5081016	All classified employees/positions under the jurisdiction of the Washington Personnel Resources Board.
5081018	All student employees other than graduate assistants or those covered by Washington Personnel Resources Board, including work-study students.
5081019	All employees/positions not subject to other classifications.

The offset to the transfer expenditure account is always internal cash 1000199.

Original Account	Description	Transfer Account
5000010	Exempt Executive	5081012
5000020	Exempt Managerial	5081012
5000030	Exempt Professional/Technical	5081012
5000040	Exempt Support Staff	5081012
5000050	Exempt Temporary	5081012
5000110	Classified PT Hourly (Non-Rep)	5081012
5000060	Faculty Permanent FT	5081014
5000070	Faculty Permanent PT	5081014
5000080	Faculty Temporary FT	5081014
5000090	Faculty Temporary PT	5081014
5000100	Community College Classified	5081016
5000120	Technical College Classified	5081016
5000130	Higher Education Students	5081018
5000140	Work Study Students	5081018
5000180	Higher Education Other	5081019
5000190	Tech Coll Classified PT Hourly	5081019

40.10.40.1.d Salary Transfer Departments

Colleges may use a single department for all transfers since Department is not included in our transmittal to AFRS/One Washington.

40.10.40.1.e Salary Transfer Class Codes

Colleges should use the original Class Code when making transfers to maintain the integrity of college data for IPEDS reporting.

40.10.40.1.f Salary Transfer Projects

PC Bus Unit/Project/Activity/Analysis Type are always required for project costs.

40.10.40.1.g Salary Transfer Staff Months

Every transfer of salary expenditure requires staff months as well. Enter SMO in the Stat field and the totally number of staff months in the Stat Amt field.

40.10.40.1.h Salary Transfers Accounting

Example 1

Two employees (faculty) were incorrectly charged to:

1 -              001-101-012-34520-5000060-$2000 SMO .5

2 -              001-101-018-34520-5000080-$2000 SMO .5

when they should have been charged to:

3 -              08A-3E0-012-34520-5000060-$2000 SMO .5

4 -              08A-3E0-018-34520-5000080-$2000 SMO .5

then make the following journal entry (as an example):

Illustrative Entries

Salary Transfer Out

Fund	AI	Class	Dept	Project	Acct	Amt	Stat	Stat Amt
001	101	012	34520	Null	1000199	$4000.00
001	101	012	34520	Null	5081014	$(4000.00)	SMO	(1.00)

Salary Transfer In

Fund	AI	Class	Dept	Project	Acct	Amt	Stat	Stat Amt
08A	3E0	012	34520	Null	5081014	$4000.00	SMO	1.00
08A	3E0	012	34520	Null	1000199	$(4000.00)

Example 2

One employee was incorrectly charged to a state fund as faculty, but should have been charged to a grant as classified:

1 -              001-101-012-34520-Null-5000060-$1800 SMO .5

when they should have been charged to:

2 -              145-Null-112-45631-0000002538-5000100-$1800 SMO .5

then could make the following journal entry (as an example):

Illustrative Entries

Salary Transfer Out

Fund	AI	Class	Dept	Project	Acct	Amt	Anal Type	Stat	Stat Amt
001	101	012	34520		1000199	$1800.00
001	101	012	34520		5081014	$(1800.00)		SMO	(.50)

Salary Transfer In

Fund	AI	Class	Dept	Project	Acct	Amt	Anal Type	Stat	Stat Amt
145	Null	112	45631	000000nnnn	5081016	$1800.00	GLE	SMO	.50
145	Null	112	45631	000000nnnn	1000199	$(1800.00)	DNC

Example 3

A faculty member was correctly charged to a state fund as faculty, but in the second half of the month they went on sabbatical:

1 -              001-101-012-34520-Null-5000060-$4000 SMO 1.0

so they should have been charged to:

2 -              001-101-044-34520-Null-5000060-$2000 SMO .50

then could make the following journal entry (as an example):

Illustrative Entries

Salary Transfer Out

Fund	AI	Class	Dept	Project	Acct	Amt	Anal	Stat	Stat Amt
001	101	012	34520		1000199	$2000.00
001	101	012	34520		5081014*	$(2000.00)		SMO	(.50)

Salary Transfer In

Fund	AI	Class	Dept	Project	Acct	Amt	Anal	Stat	Stat Amt
001	101	044	34520		5081014*	$2000.00		SMO	.50
001	101	044	34520		1000199	$(2000.00)

*Alternately, for ease in reconciliation, it would be preferred to retain the original account – 5000060.

The nature, accounts and amounts of the transfers would change depending on the terms of the collective bargaining agreements and state guidance for recording expenditures.

 

Original Account Ranges*	Transfer Account	Description
5010010-5010160 5010180-5010200	5081020	Intra Agncy Transfer Benefits
5050040-5050060 5050100-5050165	5081030	Intra Agncy Transfer Prof Svcs
5030070-5030080 5030110 5050030 5050070-5050090 5050170 5060010-5060060 5081090-5081260	5081040	Intra Agncy Transfer Goods/Svc
5080010-5080070	5081050	Intra Agncy Transfer Travel
5040010-5040799	5081060	Intra Agncy Transfer CapOutlay
5020451-5020499	5081070	Intra Agncy Trnsfr GrntsBenSvc
5020030-5020449	5081072	Intra Agncy Reimb Tuition-Aid
5050020-5050027	5081074	Intra Agncy Reimb - Cntr Grnts
5110010-5110199	5081080	Intra Agncy Transfer Debt Svc

* See section 10.30.45.5 Expenditure/Expense Accounts for a detailed list of accounts.

The offset to the transfer expenditure account is always internal cash - 1000199!

Example 4

Two employees’ travel costs were incorrectly charged:

1 -              001-101-012-34520-5080010-$215.50

2 -              001-101-018-34520-5080030-$184.50

when they should have been charged to:

3 -              08A-3E0-012-34520-5080010-$215.50

4 -              08A-3E0-018-34520-5080030-$184.50

the college could make the following journal entry (as an example):

Illustrative Entries

Expenditure Transfer Out

Fund	AI	Class	Dept	Method	Acct	Amt
001	101	012	34520	Journal Entry	1000199	$400.00
001	101	012	34520	Journal Entry	5081050	$(400.00)

Expenditure Transfer In

Fund	AI	Class	Dept	Method	Acct	Amt
08A	3E0	012	34520	Journal Entry	5081050	$400.00
08A	3E0	012	34520	Journal Entry	1000199	$(400.00)

Alternately, the college could choose to reverse the original expenditure (with an offset to internal cash) and record the expenditure in the correct chartstring (with an offset to cash).

It is important to record the offset to internal cash since the accounts payable chartstring cannot be modified and the process must complete through payment in the original chartstring.