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Understanding County Earnings

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Introduction

This whitepaper addresses the unique funding structure and payroll processing for Texas County Extension agents by the Texas A&M University System and Workday. County Extension agents receive funding from the Texas A&M AgriLife Extension Service and the local county government. This dual-source funding arrangement is unique within the A&M System. It came about because Texas counties preferred a direct payment model establishing an employer-employee relationship instead of a contractual agreement between the Extension Service and each county.

Purpose

The purpose of this white paper is to:

  • Explain the shared funding model for Texas County Extension agents.
  • Clarify why TAMUS needs to account for the county portion in Workday and FAMIS.
  • Describe the mechanics of tracking and processing these earnings.
  • Detail the integration of county earnings within FAMIS.

Funding Structure

Shared Funding

Texas County Extension agents receive compensation from two sources:

  • Texas A&M AgriLife Extension Service: The Extension Service provides funding for agents, most often from state funds, but funds could also come from other or multiple sources, such as federal appropriations or grants.
  • Local county: The local county directly pays the agents, creating a local employer-employee relationship. However, the county does not contribute to an agent’s Group Insurance Premium (GIP) or retirement program. See Insurance and Retirement Allocations in FAMIS Integration below.

The local counties prefer direct payment over a reimbursement model for several reasons:

  • Establishes a direct employer-employee relationship.
  • Simplifies the administrative process for counties.
  • Ensures timely compensation for the agents.

Workday Integration

System and State Funding

The A&M System and state funding cover full group insurance (medical) and retirement benefits as if the extension agent were a full-time employee of the system. Consequently, the accurate accounting of the county portion is essential for:

  • Employee benefits: Ensures agents receive the correct benefits, including medical insurance and retirement contributions.
  • Compliance and reporting: Maintains compliance with state and federal regulations regarding employee compensation and benefits.

Mechanics of County Earnings in Workday

Tracking and Calculations

  • Earning codes: County earnings are tracked with earning Codes 153 and 155 and are assigned as allowances in Workday.
  • Retirement calculation: This allowance is included in the retirement calculations, impacting both Teacher Retirement System (TRS) and Optional Retirement Program (ORP) benefits.
  • FTE monthly salary rate: For payroll cost transfer (PCT) processing, full-time equivalent (FTE) reporting and payroll expense reporting as seen in FAMIS and Canopy payroll expense screens, county earnings are included in the FTE monthly salary rate. This is done in the FAMIS/Workday integration of payroll results. However, the FTE monthly salary rate in Workday will not include county earnings.

Tax and Benefit Considerations

  • Tax withholding: Workday does not withhold Federal Income Tax (FIT) or apply Federal Insurance Contributions Act (FICA) taxes (OASI, OAHI) to county earnings; the county withholds and manages these taxes.
  • Benefits: The county earnings are included in the calculation in Workday, so in most cases, the county agent is recognized as a full-time employee.
  • Journal entries: Workday does not create journal entries for county earnings since they do not create a payment to the employee. Special processing occurs in the Workday to FAMIS integration to account for these earnings in FAMIS.

FAMIS Integration

Integration Details

  • FTE monthly salary rate: FAMIS includes the county earnings allowance in the FTE monthly salary rate.
  • Earning codes: County earnings are provided to FAMIS as specific earning codes (see Earning Code Attributes).
  • Assigning the SL account: FAMIS operations maintain a table (COUNTY-FUNDING-ACCOUNT) on FAMIS FRS Screen 863 to associate county earnings with a FAMIS SL account (e.g., 199999). While no gross pay is charged to this account, it assists in allocating benefits for these earnings.
  • Determining the AA code: The FAMIS SL account from the COUNTY-FUNDING-ACCOUNT table is linked to an accounting analysis (AA) code on FAMIS Screen 008. This AA code and the SL account are used to identify the accounts, charge codes, and banks assigned to the benefit charges (FAMIS Screen 724).
  • Insurance and Retirement allocations: Group Insurance Premium (GIP; sometimes referred to as State GIP [SGIP]) is the employer contribution made to cover an employee’s health insurance and must be funded by a cost center (FAMIS SL account). The cost of GIP is spread over the various regular (e.g., regular salary, hourly salary, some stipends) earnings. The GIP and retirement and longevity benefits are proportionally allocated to county earnings based on the percentage of county earnings to the agent’s overall monthly earnings.
  • FTE reporting: County earnings are included in FTE reports, with special coding recognizing these earnings as payments despite zero gross pay. This is done through integration with the TAMUS Enterprise Data Warehouse.