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Introducing Multi-year Encumbrances for Externally Sponsored Research Funds

June 7, 2021

We are pleased to announce the launch of the multi-year labor encumbrance feature for externally sponsored research funds in Banner and Web*Finance beginning in July 2021 for FY’22.  Multi-year labor encumbrances are a feature in Banner that allows labor (salary and fringe) to be encumbered through the budget period end date on an award.  Currently, the system only calculates the encumbrance through June 30th of any fiscal year, regardless of the budget period end date on the award.  As those of you in the research community are aware, externally sponsored grants do not always follow a fiscal year and can have an end date of any month in the calendar.  Implementation of this feature will allow for improved financial administration of an externally funded award since your labor encumbrances will now match the corresponding budget period. 

Activity Code SRFRIN – Salary-Research-Fringe

To implement the multi-year encumbrance feature, we have had to make some changes.  The first of these changes is to introduce the use of a new activity code, SRFRIN – Salary-Research-Fringe.  All funds tied to level 2 fund types for externally sponsored research will utilize this activity code as part of its default FOAPAL (Fund-Org-Account-Program-Activity-Location) string in Banner.  These fund types are: 18-Current Restricted, 21-Restricted, 23-Contributory Sponsored Unrestricted and 24-Contributory Sponsored Restricted.   The new activity code will be added as a default on any existing funds and their corresponding indexes by June 23, 2021 so that it is ready for the labor encumbrance roll which is set to occur on July 1, 2021.  Any new funds established after June 23, 2021 will be set-up using the activity code as a fund and index default by Research Accounting Services and Financial Reporting.

Transition to Baseline Banner Account Code based Fringe Calculation

The activity code change is tied to a larger technical change related to how our fringe benefits are calculated that is required to turn on the multi-year encumbrance functionality in Banner.  As such, we will be moving away from a custom coded E-class based fringe calculation process to an account code-based functionality that is part of the baseline Banner product.  The activity code allows us to differentiate those funds that need to utilize the federally negotiated fringe rates (i.e., Fund types 18-Current Restricted, 21-Restricted, 23-Contributory Sponsored Unrestricted and 24-Contributory Sponsored Restricted) from those that use the internally developed fringe rates (funds with no default activity code).

Drexel IT will make all the necessary updates in Banner to add the new activity codes on all existing labor distributions, funds, indexes.  Therefore, there is no need to submit EPAF changes and submit new labor distributions to accommodate this new activity code.  The default activity code will appear automatically and you should not try to remove it.  If you do attempt to do that, IT has developed scripts to replace it after the fact.  This will ensure that the proper fringe rate is applied.  Therefore, if you are submitting a labor redistribution for a period prior to July 2021, a script will automatically add the activity code before the labor distribution is fed to finance and fringe is calculated.  We anticipate going live with the use of the baseline Banner fringe functionality on June 23, 2021, and as such, the bi-weekly payroll for June 25,and monthly payroll for June 30, 2021, will utilize the new functionality.

Utilizing the new activity for non-salary accounts is recommended but not required.  Therefore, requisitions and journal entries (non-salary) do not need this code, but it should default in, and we recommend leaving it stay as part of the transaction as it will not cause any harm.

The implementation of the multi-year encumbrances was truly a team effort involving Drexel IT, HRIS, Budget and Financial Planning, Procurement Services, and the Comptroller’s Office.  We hope that once you get to experience the new functionality that you will find it valuable.

Virtual training is under development and will be announced.

As always, I welcome your feedback and you can direct your questions about the release of this new functionality directly to me via an email to pjr27@drexel.edu.