|
This communication is being sent to Payroll Administrators, Payroll Budget Processors, and Fiscal Officers at Cardinal HCM Payroll agencies, excluding VDOT. |
|
|
Effective with the salaried paychecks dated September 30, 2025, Cardinal is updating how fringe expenditures for employer deductions are allocated. This change refines the method implemented on July 1, 2024, to improve accuracy and reduce budget disruptions at fiscal year-end by preventing incorrect fringe allocations. These changes will be reflected in the output of the Payroll Detail Expenditure report in HCM and in the General Ledger (GL) for journals starting with "PY". As a result, some agencies may need to perform journal corrections.
Current Allocation Method and Associated Issues
Currently, fringe expenditures for employer deductions are allocated only to the ChartField combinations tied to regular pay. This method, introduced on July 1, 2024, was intended to simplify and standardize allocations.
However, some agencies have experienced issues, particularly in scenarios involving retroactive timesheet corrections. When employees reclassified regular hours as non-productive time (such as sick or vacation leave) across multiple pay periods, the related fringe expenditures for employer deductions were incorrectly allocated. This created inaccurate postings to the General Ledger, which often appeared as large positive and negative amounts across different funds, ultimately causing budget issues during the FY 2025 year-end closeout.
|
|
New Allocation Method
Under the new fringe allocation method, fringe expenditures for employer deductions will be allocated to the ChartField combinations associated with both regular pay and non-productive pay (i.e., compensated hours not worked such as leave, office closing, or holiday). This method more accurately aligns costs with how employee time is reported on timesheets.
Important Note: Other earnings codes, including overtime, premium rewards, and bonuses, will remain excluded from employer fringe deduction allocations under this method.
Cardinal is implementing the change now to prevent future incorrect fringe allocations, reduce year-end reconciliation efforts, and avoid further budget disruptions at fiscal year-end.
|
|
Review a Detailed Example
To see how this new method works, click the button below. The example demonstrates both the current and updated allocation methods for fringe expenditures. In the example, ChartField combinations A, B, and C are placeholders representing full ChartField values that may be entered on a timesheet or as a position default funding string.
|
|
Agency Impacts & Corrections
Cardinal has identified several agencies with impacted records. These agencies will receive a spreadsheet showing the actual fringe distributions for affected employees, along with suggested journal adjustments the agency may process based on agency policy and reporting needs. Impacted agencies should be on the lookout for a separate follow-up communication with this data and tools for corrections.
Please note: No changes will be applied retroactively by Cardinal.
|
|
Actions for All Agencies
If agencies have implemented any downstream processes to redistribute Fringe Deduction data internally, such as using payroll data extracts or payroll detail expenditure reports, they should review, assess, and update those processes as needed to align with the new Cardinal changes, especially if they are reprocessing fringe deductions within their own systems.
We strongly encourage you to share this important update with your payroll and finance teams.
Regards,
The Cardinal Team
|
|
 |
|
Questions |
If you have technical or functional questions, submit a help desk ticket by emailing vccc@vita.virginia.gov and include the following information:
Subject: Cardinal – <brief summary for routing>
Email Content:
- Detailed information about your issue (i.e., functional area, page, actions, error)
- Name, email address, and best contact phone number
|
|
Cardinal - Virginia's Enterprise Resource System
You are receiving this email as a result of the role(s) you hold in the Cardinal System.
|
|
|
|
|
