The Alberta 1/200 Calculation and how the Standard Costing is impacted by using 200 vs. 240 days as the measurable standard.
Overview of 1/200 Calculation
The Alberta Teacher’s 1/200 Calculation is used to calculate the adjustment to salary for Teachers who did not work a full year either through working a reduced FTE or not completing a full year. This 1/200 calculation process pulls in the information for the employee for those months already worked and projects the remaining months to the end of June. This process uses the number of Days in the employee’s Days bank to determine the employee’s FTE per period. The employee’s Days bank must have a value for any school term month where the employee was paid. The 1/200 calculation takes the salary at 100% and divides by 200 to acquire the averaged daily rate and then calculates the difference between total days worked and total days already paid for a residual amount to be either paid or deducted in the 1/200 payout, using a money-only pay code.
As this is the first year in which the 1/200 payout process is available to you we have been made aware of a discrepancy regarding standard costing when using 240 days (20 * 12) as the FTE Units on the Occupation code. The Standard Costing for the year is typically setup over a 10 month period in the Occupation Code Database (Standard Cost = Annual Salary; FTE Units = 200). The 1/200 calculation process was engineered with the concept of 200 days as the FTE Units. There are no hours worked in the months July and August and therefore no real need to standardize the cost over 12 months; one of our clients has commented that costing over 10 months allows you the flexibility of reviewing your GL’s throughout the months July and August making any necessary final adjustments. An additional recommendation made by one of our clients is to review all of the costs halfway through the year to ensure that all employees’ costs are apportioned correctly.
Recommendations
If you are a district that is using 240 as the FTE Units in your Occupation Code database then your Standard Costing GL’s will not be adjusted during the July and August pay periods as using a money-only pay code for the 1/200 payout process only adjusts the money and does not adjusts the days worked. Essentially the Actual GL’s will be correct but the GL’s for your standard costing will not change because the hours have not been adjusted. If you are a district that has used 240 instead of 200 then you will need to execute GL adjustments to standard costing GL’s and then we would strongly recommend changing the FTE units on the occupation code from 240 to 200. This will standardize your costs over a 10 month period and then you will not have any need to adjust the days worked during the July/August payouts as you will only be dealing with the actual payout and days worked/not worked are recorded in their respective months and not in the July/August pay periods.
If your jurisdiction requires that Standard Costing be done over 12 months then please inform TSC. Our Manager Forum budget has been allocated for the 2006 year so we will consider this enhancement for our 2007 year. Alternatively you can request a quote to have the programming adjusted immediately or you can choose to change your units from 240 to 200.
If you have any inquiries related to Standard Costing and/or the Alberta 1/200 Payout process please call us toll free 1.866.998.2801 or submit your question through out Knowledge Centre at www.tscsoftware.com “Submit a Support Request” link.