Process Considerations:

• The Nightly Encumbrance process allocates transactions that are without funding sources or adequate funding to the suspense combination code
  • Review these transactions and specify a new combination code, if necessary
  • These are available on the Encumbrance Error Report; see Reviewing the Earnings Encumbrance Messages Report in HRS  for additional information
• If an active employee's encumbrance balance is not correct or doesn't exist, see Maintaining Encumbrances - Balance Not Correct or Doesn't Exist in HRS  for additional information
• If an employee termination is entered in Job Data retroactively, the encumbrance balance should zero out as expected
  • If the termination is future dated, the termination entry will trigger an encumbrance recalculation that will be liquidated by the employee's final paycheck(s); in this scenario, there is a possibility of a small amount still encumbered after the final paycheck liquidation
  • See Completing Simple Encumbrance Maintenance - Close out in HRS  for additional information

You may click on the links below to navigate directly to a section: 

A. Nightly Encumbrance Process Overview

• Part of a Batch Process
  • Scheduled and run through IWS, a job scheduling software; this process is very rarely run ad hoc
  • The Nightly Finance Batch Job Stream includes additional jobs (UW_ENCNT, PAYGL03G and Journal Mods); these additional jobs have run controls that are date specific and, as such, if the process is manually run it cannot be run the same day as part of the scheduled batch job stream.
  • The Nightly Finance Batch Job Stream, which includes encumbrances, will be run six nights per week; it will NOT run on Saturday nights. Nights where an additional Finance Batch Job Stream is run will also include the Nightly Finance Batch Job Stream.
• Estimates earnings from the run control specified date to the earlier of the end of the appointment or end of the fiscal year
• Uses funding information from the DEPT_BUDGET and DEPT_BUDGET_ERN Tables (Budget Funding Data Entry page) to determine funding sources for earnings
• Recalculations triggered by changes to the Job, Funding, Budgeting, Department or Position are calculated at night. As such, changes to a Job, Funding, Budgeting, Department or Position will only be reflected after a nightly calculation
• Centralizes the encumbrance calculation, liquidation and reversals - whereas most triggers are from decentralized user driven events. In essence, encumbrances are now a centralized process that runs based on events triggered by a decentralized user group
• As more than one user likely has access to many of these employee characteristics, the encumbered value may change if another users makes a change to the Job, Funding, Budgeting, Department or Position

To the top

B. Encumbrance Triggers

• Records that are going to be recalculated in the next nightly encumbrance calculation are identifiable in the Encumbrance Trigger (ENCUMB_TRIGGER) table. The following changes will initiate an encumbrance recalculation:
  • A Position Data change impacts the encumbrance calculation for the incumbents
  • Department-level funding information is inserted, deleted, or corrected for an entity, and the changes affect the encumbrance calculation for all incumbents that belong to it and don't have appointment or position-level funding assigned
  • Any related funding changes
  • Checking or unchecking the Encumbrance Override indicator on the employee's Job Data record
  • Changing the assigned encumbrance Session field on the employee's Job Data record
  • Job Data records are added, corrected, inserted, or deleted
  • Encumbrance default information is inserted, deleted, or corrected for an entity on the Encumbrance Definition page and the changes affect the pre-encumbrance calculations for all entities that belong to it

To the top

C. Encumbrance Exceptions

• Employees with a Pay Basis of Summer Session or Summer Service are NOT encumbered
  • For UWMSN Summer Session and Summer Service only, encumbrance balances are created in SFS/WISER, but are not tied to HRS
  • Questions regarding UWMSN Summer Session and Summer Service encumbrances in WISER should be directed to uwsaproblemsolvers@uwsa.edu
• Employees with Empl Class of either SH (Student Hourly) or CL (University Staff Temporary Employment {TE}) are NOT encumbered
• Employees with Pay Group of NON are NOT encumbered
• Leave With Out Pay and Furlough Earnings Codes are NOT encumbered; the dollar amount tied to these Earnings Codes on an employee's paycheck will not be liquidated
• Not all Institutions / Divisions / Departments use encumbrances
  • UWOSH, UWEAU and various Divisions at different institutions have opted not to encumber as of the "go-live" date of April 18, 2011
• Employee Records where the FTE (Full Time Equivalent) is less than 0.10 (Standard Hours less than 4.0) will have the Encumbrance Override indicator automatically checked; when checked, the employee's earnings will NOT be encumbered
  • If the employee later experiences an FTE change in Job Data to 0.10 FTE or above, the Encumbrance Override box will need to be manually unchecked to allow encumbrance calculations to resume for the rest of the current fiscal year for that Empl Rcd
  • If an employee with below 0.10 FTE had an encumbrance balance at the time of their termination, the encumbrance balance will not zero out until the Fiscal Year End (FYE) encumbrance clear
• Note: The Encumbrance Override indicator is located on the employee's Job Data record. (Menu navigation: Workforce Administration > Job Information > Job Data, Job Information tab)
• The encumbrance process does not recognize an employees Expected Job End Date (EJED) entered in Job Data; however, the resulting/eventual Job Data termination row will trigger an encumbrance recalculation

To the top

D. Encumbrance Calculations Not Uniform

• Encumbrance Calculations are not uniform; just as the underlying data points will vary from employee to employee, the calculation used to calculate the encumbrance will vary based on Employee Classification (Empl Class) and Compensation (Comp) Frequency
  • Only Regular Pay is encumbered
  • Liquidations are determined by Earnings Code assigned
  • Lump Sum, Additional Pay, Piece Work and other Non-Regular Pay Payments are NOT encumbered
  • Employees working only during the academic year will encumber based on different begin and end dates at different campuses
    • These dates are defined in the employee's Job Data record > UW Custom tab > Encumbrances section
  • Different Empl Classes will encumber based on different dates (See table below).

Empl Class	Session	Comp Frequency	Approx. Days
University Staff (CJ/CL)	CE	H	364
Faculty/Academic Staff/Limited Appointment (FA/AS/LI) (Salaried Bi-Weekly)	FY	B	364
FA/AS/LI (Hourly Bi-Weekly)	FY	H	364
FA/AS/LI (Salaried 9 Month Bi-Weekly)	AY	9B	273
FA/AS/LI (Hourly 9 Month Bi-Weekly)	AY	H	273

E. How to Manually Calculate Encumbrances

1. Obtain the following information from Job Data and Budget Funding Data Entry, using the following HRS navigation paths:

• Navigate to: Workforce Administration > Job Data
  • FTE:  Job Information tab, Standard Hours section
  • Pay Basis: Job Information tab, Job Information section
  • Comp Rate: Compensation tab, Compensation > Pay Components section
  • Frequency: Compensation tab, Compensation section
  • Encumbrance calendar: UW Custom tab, Encumbrances section

• Navigate to: Set Up HCM > Product Related > Commitment Accounting > Budget Information > Budget Funding Data Entry
• Also accessible from the Finance WorkCenter found at Payroll for North America > Payroll Distribution > Commitment Accounting USA > UW Finance WorkCenter. 
• For more information about the WorkCenter, see KB Setting Up a WorkCenter in HRS.
• Review funding string

2. Determine how many calendar days remain to be paid in the current fiscal year for the employees Pay Group.

• Start counting the number of calendar days remaining in the fiscal year from the day after the most recent pay period end date.  This is found in HRS on the “Review Paycheck” page, searching for Empl ID and selecting the most recent paycheck.
• Navigate to: Payroll for North America > Payroll Processing USA > Produce Payroll > Review Paycheck
• Also accessible from the Finance WorkCenter found at Payroll for North America > Payroll Distribution > Commitment Accounting USA > UW Finance WorkCenter
  
• For more information about the WorkCenter, see KB Setting Up a WorkCenter in HRS.

• There are a total of 364 days in an A-Basis and H-Basis year.
• A-Basis (e.g., Pay Groups BAR & BAF) Salaried Bi-Weekly and H-Basis end dates will vary by fiscal year, ranging from approximately June 18th through June 29th.
• Payroll calendar:  https://uwservice.wisc.edu/calendars-schedules/
• In the above BAR Pay Group employee example, there would be 266 days remaining in the fiscal year (6-Sep. + 31-Oct. + 30-Nov. + 31-Dec. + 31-Jan. + 28-Feb. + 31-Mar. + 30-Apr. + 31-May + 17-June) = 266.
• C-Basis end dates vary by institution and year, ranging from approximately May 17 through June 5.
  • Academic year calendars for all institutions can be found here:  https://uwservice.wisc.edu/calendars-schedules/academic-payroll/; click on the institution and year; scroll to the bottom of the page and note the last day in the bottom row of dates for that institutions end date. 
  • Academic year end dates can also be verified on an employee's Job Data page, UW Custom tab, in the Encumbrances section.
  • There are a total of 273 days in a C-Basis year.

3.  Encumbrance Calculation Formulas

Note: These formulas always use the Comp Rate on Job Data on the bottom of the page. Do not use the Compensation Rate that is calculated at the top of the page.

3a. A-Basis

Annual Comp Rate (pay groups BAR, BAF)

{[FTE x (Annual Comp Rate) / 364] x Calendar Days Remaining in FY} x % Funding Dist

Hourly Comp Rate (pay groups HFR, HFF)

{[FTE x (Hourly Comp Rate x 2,080) / 364] x Calendar Days Remaining in FY} x % Funding Dist

Example:  An employee with 0.50 FTE and an annual full-time Comp Rate of $56,564 is funded 75% to one source and 25% to another, with 322 remaining calendar days:

{[0.5 x ($56,564) / 364] x 322} x 0.75 = $18,764.02

{[0.5 x ($56,564) / 364] x 322} x 0.25 = $6,254.67

Example: An employee with 0.50 FTE and an hourly Comp Rate of $35.00 is funded 75% to one source and 25% to another, with 259 remaining calendar days:

{[0.50 x ($35.00 x 2,080) / 364] x 259} x 0.75 = $19,425.00

{[0.50 x ($35.00 x 2,080) / 364] x 259} x 0.25 = $6,475.00

3b.  C-Basis

Annual Comp Rate (Pay Groups BCR, BCF)

{[FTE x (Annual Comp Rate) / 273] x Calendar Days Remaining in FY} x % Funding Dist

Hourly Comp Rate (Pay Groups HCR, HCF)

{[FTE x (Hourly Comp Rate x 1,560) / 273] x Calendar Days Remaining in FY} x % Funding Dist

Example: An employee with 0.50 FTE and an annual full-time Comp Rate of $55,123 is funded 75% to one source and 25% to another, with 266 remaining calendar days:

{[0.5 x (55,123) / 273] x 266} x 0.75 = 20,141.10

{[0.5 x (55,123) / 273] x 266} x 0.25 = 6,713.70

Example: An employee with 0.50 FTE and an hourly Comp Rate of $35.00 is funded 75% to one source and 25% to another, with 259 remaining calendar days:

{[0.50 x ($35.00 x 1,560) / 273] x 259} x 0.75 = $19,425.00

{[0.50 x ($35.00 x 1,560) / 273] x 259} x 0.25 = $6,475.00

Note: for Calendar Days Remaining in FY, if calculating encumbrance effective 1/1/20XX, there are 144 calendar days through the end of the academic year ending on 5/24/20XX.  Academic end dates vary by institution. You can verify an employee's end date on the UW Custom tab on Job Data.

3c.  H-Basis (pay groups HPR, HLR, HAR)

{[FTE x (Hourly Comp Rate x 2,080) / 364] x Calendar Days Remaining in FY} x % Funding Dist

Example: An employee with 0.50 FTE and an hourly Comp Rate of $35.00 is funded 75% to one source and 25% to another, with 259 remaining calendar days:

{[0.50 x ($35.00 x 2,080) / 364] x 259} x 0.75 = $19,425.00

{[0.50 x ($35.00 x 2,080) / 364] x 259} x 0.25 = $6,475.00

To the top

Additional Resources

Related KBs:

• Completing Simple Encumbrance Maintenance - Close out in HRS
• Maintaining Encumbrances - Balance Not Correct or Doesn't Exist in HRS
• Reviewing the Earnings Encumbrance Messages Report in HRS
• Finance Report List in HRS
• Fiscal Year End Considerations in HRS
• Funding and Direct Retro Security by Campus in HRS
• Funding Checklist and Timelines in HRS
• Setting Up a WorkCenter in HRS 

Related Links: