Personnel service costs consist of direct salaries and wages, and fringe benefits
related to direct salaries and wages. Direct salaries and wages are those paid directly
to personnel for time devoted exclusively to the SSA disability program--and the charge
to the disability program is not derived through apportionment with another agency
or component.
Report salaries and wages based on the reporting period and the year earned--regardless
of when payment is made. Do not establish an obligation for accrued annual or sick
leave until it becomes due or payable as terminal leave.
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Retroactive Salary Adjustments
Salary adjustments approved retroactively are to be obligated in the period in which
the adjustments are authorized by the legislature or controlling agency. The DDS should
report the status of anticipated retroactive salary adjustments via the annual and
quarterly Spending Plan requests when possible. Agencies should contact the SSA regional
office at once if these adjustments will result in exceeding the approved cumulative
obligational authority.
2. Fringe Benefits
The inclusion of fringe benefits applicable to direct salaries and wages--as an integral
part of the cost of those salaries and wages--is basic to the concept of total direct
personnel services cost. This is a generally accepted accounting principle and is
the basis for the procedure followed by many States in their own record keeping.
The DDS must report all fringe benefits on direct salaries and wages under "Personnel
Services" on line 1 of the SSA-4513 (State Agency Report of Obligations for SSA Disability
Programs). Examples of fringe benefits would include the employer's contributions
to:
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Bond Deductions (if employer contributes)
Other charges based on salaries and wages, such as the employer's share of contributions
to the State retirement fund or FICA taxes, generally should be recorded as obligations
at the time the related salaries and wages are earned. Where such charges are billed
to the State agency after the end of the accounting period, the amount of the obligation
should be estimated as a percentage of the total payroll--on the basis of the latest
billing or other basis applied consistently each period--and should be reported for
the same period as the related payroll expenses. Such estimates should be adjusted
to actual expenses when that information becomes available.