A funding change action solely pertains to altering funding allocations and does not involve changes to an employee's position, primary appointment, or pay rate. Such changes are handled through an Update/Change Personnel Action Form (PAF). A payroll funding change is performed when the funding source (cost object or WBS) of an employee’s pay needs changed. This can be forward-looking, but most often, it affects one or more pay periods that have already occurred. How far in the past the funding change needs to be effective determines the paperwork, process, and approvals needed for the action. Payroll redistributions are subject to both Federal and State regulations regarding timeliness and supporting documentation. Retroactive Payroll Adjustments affecting Contract or Grant projects must be processed on a timely basis.
Limitations for Use
All funding change requests for the following employee types must be submitted to, and processed by, Payroll (See Submitting the PAF):
- Employees who are currently on a leave of absence
- Separated employees
- Employees who have moved to another campus
- Funding changes that extend into the prior fiscal year
Exclusions
Certain types of retroactive payroll funding adjustments are not allowed, including:
- Converting student non-work study funding to work-study funding (this requires a position change).
- Solely adjusting employer fringe costs for GTA/GRA student insurance and/or tuition remission (these require a PJ by Accounting).
Separation of Duties
When processing funding changes, a separation of duties is critical to ensure accountability and mitigate the risk of errors or fraud. This separation involves three distinct roles: the requestor, approver(s), and the processor(s), with each role being fulfilled by different individuals. Here is how this separation is maintained:
- Requestor: This person initiates the funding change request, identifying the need for the adjustment. They provide the necessary information and justification for the change.
- Approver(s): Approvers are responsible for reviewing and approving the funding change request. It's essential that approvers do not have a conflict of interest or a vested interest in the change. Importantly, an approver cannot approve their own funding change request. For example, if a Funding / Retro Funding Change PAF is for an employee named John Smith and John Smith is also the Principal Investigator (PI), John Smith cannot sign as an approver or PI on this funding change request.
- Processor(s): Processors handle the execution of the approved funding change. They are responsible for entering the change into the system accurately and timely. The preparer of the Personnel Action Form (PAF) must not enter the ZEPAF action. This ensures an additional layer of checks and balances in the process.
Before Choosing PAF Method
The paperwork, process, and approval requirements for a funding change depend on if it is going back in time, and if so, how far back in time the change needs to be made. Consult the current Payroll Schedule to determine which time frame applies and therefore, what process and approvals are required. The following explains the periods that appear on the Payroll Schedule. Once you determine which of the 3 periods the funding change falls into, see Choose Funding Change PAF Method where the procedure for each funding change is further explained.
Future and Current month + Prior 2 months = “4/2 Rule”
Funding changes affecting the future, and recent past, including the current payroll and approximately two months prior, fall under this category. This "recent past" period extends from the current pay period to the 4/2 Rule.
- The 4/2 Rule signifies a specific date determined by counting back from the current pay cycle. For monthly-paid employees, it includes the current month's pay cycle plus two prior monthly pay periods. For biweekly-paid employees, it encompasses the current pay cycle plus the prior four pay periods.
- This rule is sometimes called the "60 Day Rule" because the date falls roughly 60 days before the current pay period starts.
Approximately 3-6 Months in Past = “13/6 Rule”
Payroll funding adjustments that occur beyond the 4/2 Rule are considered “retroactive.” A retroactive payroll adjustment is not part of a regular business process and can only be performed in justified circumstances. Payroll redistribution is subject to both federal and State funding regulations regarding timeliness and supporting documentation. This time window spans from around three to six months in the past, bounded by the 4/2 Rule and the 13/6 Rule. Refer to the Payroll Schedule to determine these exact dates.
- The 13/6 Rule date is determined by counting back 13 bi-weekly or 6 monthly pay periods prior to the current pay period.
More than 6 Months in Past = “Beyond 13/6 Rule”
Retroactive funding changes beyond the 13/6 Rule require additional processing steps and a heightened level of review.
Next Steps