Benefits Proportional by Method of Finance (APS 011)
Agency and Institution’s Instructions for Completing Benefits Proportional by Method of Finance Report Form
(Also for use by university system administrative offices and Texas A&M System agencies)
The Benefits Proportional by Method of Finance Report Form is divided into the following sections:
- Section I — Proportion of total funding for each method of finance is determined.
- Section II — Percentages calculated in Section I are used to determine the amount of benefit charges that should be paid by each method of finance.
- Section III — Completed by institutions with group insurance or retirement adjustments.
Note: All benefit payment adjustments are due by Nov. 19.
Section I: Funding Proportionality Calculation
This section groups agency appropriation funding into four methods of finance:
- General Revenue (GR)
- General Revenue-Dedicated (GR-D)
- Federal Funds (FF)
- Other Funds (OF)
General Revenue (GR)
The GR group includes all financing sources under an agency’s General Revenue method of finance. This includes committed GR as well as GR-related financing sources that may be collected, such as vendor drug rebates.
The GR group does not include amounts deposited to Appropriated Fund 0001 but classified as OF, such as appropriated receipts, interagency contract receipts or FF.
General Revenue-Dedicated (GR-D)
An account in GR is established for each dedication of revenue and assigned its own appropriated fund number. An appropriation from GR-D is an appropriation of revenue that has been set aside by law for a particular purpose or entity.
Higher education local funds are defined in Education Code, Section 51.009 (a) and (c), and are GR-D accounts. According to the GAA, Article IX, Section 6.08 (a), to maximize balances in the General Revenue Fund, payment for benefits paid from appropriated funds, including “local funds” and “education and general funds,” shall be proportional to the method of finance, except for public and community junior colleges.
Federal Funds (FF)
An appropriation from FF is an appropriation of funds received from the United States government for the purpose for which the federal grant, allocation, aid, payment or reimbursement was made (See GAA, Article IX, Section 8.02).
Note: Benefits for salaries paid from federal receipts deposited to an assigned appropriated fund must be paid from the same appropriated fund. If GR is used to pay benefits for salaries paid from federal receipts in Appropriated Fund 0001, then GR must be reimbursed. See Sources of Revenue Required to Pay Benefit Cost (APS 001).
Other Funds (OF)
The OF group consists of Special Funds, such as the State Highway Fund (Appropriated Fund 0006). OF groups may also include appropriated receipts, interagency receipts, bond proceeds, gifts and grants, tobacco endowments and patient income. These may be deposited in a variety of appropriated funds, including Appropriated Fund 0001.
Note: Benefits on salaries paid from OF deposited to an assigned appropriated fund must be paid from the same appropriated fund.
Instructions for Completing the Funding Proportionality Calculation
Follow the instructions provided for each column of the Benefits Proportional by Method of Finance Report Form to complete the funding proportionality calculation. For agencies electing to use the electronic version of the Benefits Proportional by Method of Finance Report Form, the calculations for columns 4 and 5 are automated.
Financing Sources Amount:
Funds to be Excluded:
Commonly recognized exclusions include:
Funding Subject to Proportionality Requirements:
This is the total amount of funding subject to proportionality requirements.
Note: GAA, Article IX, Sec 6.08(c), requires institutions to adjust for local funds when determining the proportional allocation between GR and other appropriated funds. This requirement does not apply to university system administrative offices or Texas A&M System agencies. See Local Funds Adjustment instructions below for further details.
Local Funds Adjustment (Higher Education Institutions Only): GR for benefits appropriations are not included in the institutions’ GR total in the method of finance calculation in Section I of the Benefits Proportional by Method of Finance Report. OE&G income, which is classified as GR-D on the proportionality schedules, is therefore adjusted to compensate for matching benefits paid from this financing source. The amount of the adjustment may be calculated using the procedure below.
Note: If the electronic version of the Benefits Proportional by Method of Finance Report Form (Institutions) is used for data entry in Sections I and II, no additional data entry is required for the Local Funds Adjustment. The information entered in Sections I and II automatically populates the required fields.
|1||Complete the Funding Proportionality Calculation in Section I of the Benefits Proportional by Method of Finance Report Form.|
|2||Multiply the percentage calculated for GR-D funds by the total benefits paid from all funds less exclusions. This is the amount that GR-D funds may be adjusted.|
|3||Subtract this amount from GR-D funds and recalculate method of finance percentages.|
|4||Use these percentages to calculate how proportional benefits should be paid.|
|5||Include documentation of calculations as an addendum when submitting the Benefits Proportional by Method of Finance Report Form.|
Example of local funds adjustment calculation
A. Calculate initial funding proportionality:
|Funding||Method of Finance Proportional Percentage|
B. Identify total benefit expenditures net of exclusions from all sources for OASI, GIP, TRS and ORP (do not include workers’ compensation or unemployment insurance):
|Social Security, State Employer Match (OASI)||$275,000|
|Group Insurance (GIP)||$380,000|
|Retirement Contributions (TRS)||$200,000|
|Optional Retirement Program (ORP)||$450,000|
|Total Benefits (Net)||$1,305,000|
C. Multiply total net benefit expenditures by GR-D proportional calculation in Step A: $1,305,000 x 30% = $391,500
D. Reduce GR-D Total in funding proportionality calculation by amount calculated in Step C and recalculate proportional
percentages: GR-D $3,000,000 – $391,500 = $2,608,500
E. Apply adjusted percentages (see Benefits Proportional by Method of Finance Report Form, Section II). Ex: The social security, state employer match calculation would look like this:
|Expended||Proportional Percentage||Calculated Proportional Benefits|
Section II: Background and Benefit Worksheet Instructions
This chart provides background information on the benefits subject to proportionality.
Social Security, State Employee Match (Benefits Worksheet II.a):
Group Insurance (Benefits Worksheet II.b):
Institutions: The University of Texas System component institutions and Texas A&M University System component institutions are self-funded for group insurance, and receive a GR appropriation allocation from the Comptroller’s office (applied to Appropriation 95002). For all other institutions, ERS acts as the state’s trustee agency for state employee insurance benefits. ERS pays all group insurance premiums on behalf of these institutions. The funding for these expenditures comes from a sum certain GR appropriation allocated to ERS on behalf of each institution, as well as reimbursements from the institutions for any non-GR benefits (see Reimbursing Retirement Contributions and Insurance Premiums (APS 005) (FPP A.034)).
Retiree Group Insurance (Agencies and Institutions): The benefits proportionality concept also applies to retiree group insurance. Employees may have worked for multiple employers and may have been paid from various sources throughout their careers. The equitable way to allocate the retiree insurance cost is to base it on an agency or institution’s APS 011 proportionality calculation and not simply on the last fund from which a retiring employee was paid. The amount of retiree insurance cost attributable to each agency and institution can be found in the ERS Payroll-related Cost reports.
State Employees Retirement System (Benefits Worksheet II.c):
Institutions: The appropriation for institutions’ teacher retirement state match is made to the Teacher Retirement System (TRS). Appropriation authority for expenditures from Other Educational & General (OE&G) non-GR appropriated fund sources is transferred to the institution’s Appropriation 99323. Institutions must reimburse TRS for the amount TRS pays from GR for non-GR funded employees (see Reimbursing Retirement Contributions and Insurance Premiums (APS 005) (FPP A.034)).
Benefit Replacement Pay (Benefits Worksheet II.d):
Note: See Salary Benefit Appropriation Allocations (APS 019) (FPP A.042) for information on BRP.
Institutions: The appropriation for institutions’ Optional Retirement Program (ORP) is made to the Comptroller’s office. Appropriation authority for the 6.6 percent state match for all appropriated fund sources is transferred to the institutions’ Appropriation 97646.
Local funds or other sources of funds may be used to supplement amounts needed to provide the same employer contributions for the reporting period as employees who were on the state payroll at Aug. 31, 1995, received during the 1994–95 biennium. Any source other than benefits appropriations may be used for these supplemental amounts; they are not subject to proportionality and should not appear on the Benefits Proportional by Method of Finance Report Form (see Article III-39, Rider 3).
Benefit Worksheet Instructions
Follow the steps below for Sections II.a–II.d for each benefit applicable to your agency to determine the proportional amount of benefits to be paid from each method of finance. For agencies electing to use the electronic forms, the calculations for columns 4, 5 and 6 are automated.
Appropriated Funds (Sections II.a–II.b):
Actual Benefits Paid:
Benefits Calculation for Actual Social Security, State Employer Match (II.a):
Benefits Calculation for Actual Group Insurance (II.b):
For UT and Texas A&M System component institutions, total expenditures reported should equal to the total expenditures reported by your institution for the reporting period under COBJ 7041.
For institutions whose group insurance benefits are paid by ERS, total GR expenditures should be extracted from the institutions’ payroll systems and should equal the current year totals on the ERS Payroll-Related Cost Report for Active employees plus any amounts reported for retiree contributions* in the current year for ERS Payroll-related Cost Reports. Total group insurance expenditures from GR-D funds should equal total expenditures reported by your institution for the reporting period under COBJ 7041, Appropriated Fund 02XX.
*Note: These amounts must also be separately disclosed in the box below Section II.b. The total retiree contributions should equal to the ERS Payroll-Related Cost Report for the applicable reporting period.
Benefits Calculation for Actual Retirement (II.c):
For institutions, Total GR expenditures should be extracted from the institutions’ payroll systems. Teacher retirement expenditures from GR-D accounts should equal total expenditures reported by your institution for the reporting period under Appropriation 99323, Appropriated Fund 02XX, COBJ 7909
Benefits Calculation for Benefit Replacement Pay (Agencies) or Optional Retirement Program (Institutions) (II.d):
For institutions, total expenditures reported for ORP should equal total expenditures reported by your institution for the reporting period under Appropriation 97646, COBJ 7086
Benefits Subject to Proportionality:
Calculated Proportional Benefits:
For agencies or certain institutions that transfer benefit appropriations from the Comptroller’s office, ERS or TRS, adjustments between GR and other methods of finance are made by expenditure transfer. Prior to Aug. 31, use T-codes 407 and 408. After Aug. 31, but prior to the fiscal-year end close, adjustments should be made using T-codes 468 and 467 with an Aug. 31 effective date for the reporting period (for transactions posted by Sept. 30) or an Aug. 32 effective date (for transactions posted after Sept. 30). In Section II of the Benefits Proportional by Method of Finance Report, list the document number used to process the transfers.
Higher education institutions are advised to periodically review benefit payments for proportionality and make corrections as needed throughout the year. When GR overpays benefits for salaries paid from OE&G funds, a check for the overpayment must be drawn from the institution’s local bank account and deposited as a refund of expenditure to the institution’s appropriate benefit account. Use T-code 180, with the applicable COBJ (e.g., 7043 for Social Security state employer match). If GR underpaid benefit expenditures, a reimbursement should be processed to produce a warrant that can then be deposited to the institution’s local bank account. Use T-codes 246 and 903 or T-codes 247 and 904.
Section III: Adjustment Notification/ Refund Request Form (Higher Education Institutions Only)
Institutions with group insurance or retirement adjustments must complete the Adjustment Notification Form and send it to the appropriate retirement system, the Comptroller’s office, State Auditor’s Office (SAO) and Legislative Budget Board (LBB). The form notifies Employees Retirement System (ERS) or Teacher Retirement System (TRS) of proportional adjustments required. (Negative adjustments in Section II indicate the amount owed to GR. Positive adjustments indicate the amount to be adjusted against GR.)
Institutions that are not self-insured for group insurance and require an adjustment between OE&G income and the ERS GR appropriation should submit the Adjustment Notification Form to ERS, and enter the adjustment according to Reimbursing Retirement Contributions and Insurance Premiums (APS 005), including the document number on the Adjustment Notification Form. The adjustment amount cannot cause total expenditures to exceed the GR sum certain amount appropriated on behalf of each institution. Questions on the method of adjustment may be referred to ERS at (512) 867-7198.
Institutions that require adjustments for proportionality for TRS should prepare the Adjustment Notification Form. Institutions that under-reimbursed TRS should remit their payment using the methods of reimbursement identified in Reimbursing Retirement Contributions and Insurance Premiums (APS 005) and record their document number on the Adjustment Notification Form.
Institutions that over-reimbursed TRS should record the adjustment amount, their vendor number and their TRS district number on the form. Beginning with the AY 15 submissions of the Benefits Proportional by Method of Finance Report Form, TRS will implement a credit process in lieu of issuing refunds. TRS will provide specific guidance on the mechanics of the credit process to affected institutions.
Where to send the forms
Institutions that are not self-insured should send a completed Adjustment Notification Form to ERS (Attention: Finance and Administration Division, Fax number (512) 867-7491), with copies sent to the Comptroller’s office, SAO and LBB (see addresses listed in the Submission of Certified Report section below).
Institutions participating in the TRS should send a completed Adjustment Notification Form to TRS (Attention: Benefit Accounting, Fax (512) 542-6599), with copies sent to the Comptroller’s office, SAO and LBB (see addresses listed in the Submission of Certified Report section below). Adjustment notifications submitted to TRS must contain the institution’s TRS four-digit district number. If you do not know the district number, please contact Melody Austin at firstname.lastname@example.org or (512) 542-6177.
Submission of certified report (All Agencies and Institutions)
The chief fiscal officer must sign the report certifying that the report complies with GAA requirements and was completed according to this document’s guidelines. Send copies of the completed reports including workpapers or correspondence to the Comptroller’s office, SAO and LBB at the following addresses:
Comptroller of Public Accounts
Fiscal Management Division
Appropriation Control Section
111 E. 17th Street, Room 901
Austin, Texas 78774-1440
Fax: (512) 936-5972
State Auditor’s Office
Robert E. Johnson Building
1501 N. Congress Ave., Suite 4-224
Austin, Texas 78701-1429
Fax: (512) 936-9400 (Attention: Reports)
Legislative Budget Board
Robert E. Johnson Building
1501 N. Congress Avenue, 5th Floor
Austin, Texas 78701