FAP Manual 2
Chapter 11
Reconciliation of Termination of Service
EnglishNo / Subject / Page
1.0 / Introduction. / 2
2.0 / Report of service termination (PR 0016). / 4
3.0 / Withdrawal of salary. / 5
4.0 / Possible amounts indebted to official. / 7
5.0 / Possible amounts due by official. / 11
6.0 / Reports needed at service termination. / 13
7.0 / Service termination control form. / 14
8.0 / Tax recalculation. / 15
Annexure A: Controller, Checker and Executor. / 19
Annexure B: Delegations. / 20
Annexure C: List of returns/computer reports. / 21
Annexure D: List of written authorisations. / 22
Annexure E: Registers. / 23
Annexure F: Checklist: Service terminations. / 24
Annexure G: Computed examples of leave payouts. / 26
1.0 Introduction
English / Reference /1.1 / It is of vital importance that the Persal user, to prevent possible overpayments as well as to recover debts, captures a service termination of a relevant official on Persal as soon as possible.
1.2 / With every type of service termination there are certain unique financial accounting actions that must be taken note of at the closure/accounting of the relevant service termination.
1.3 / The Financial Control Office (FCO) must complete and sign Annexure F. The Head of the FCO must sign the Annexure F as confirmation that the actions were executed and checked.
1.4 / After all actions with regard to the service termination were executed the Head Management Services must certifies Annexure F.
1.5 / The original checklist must be stapled on the inside of the official's personnel file, while a copy must be kept by the relevant Personnel Office in a Z20-file clearly marked "Termination of Services" for a period of three (3) years.
1.6 / The following service terminations can occur:
· Resignation;
· Discharge – ill health;
· Deaths;
· Retirement;
· Discharges;
· Severance packages (must also be instituted on Persal for periodical workers);
· Termination of probation.
English / Reference /
1.7 / The following must be verified:
· Withdrawals of salary;
· Withdrawals of deductions;
· Reversals of possible salary/home owners deductions;
· Possible amounts indebted to official with regard to salary/allowances;
· Payment of possible leave gratuity;
· Pro rata service bonus payable; and
· Possible amounts indebted by the official, which are already instituted for recovery in instalments.
2.0 Report of Service Termination (PR 0016)
English / Reference /2.1 / The Section Personnel Compensation requests a list of all service terminations for a relevant month per pay point, per region from the Persal system monthly.
2.2 / The Sub-Directorate Personnel Privileges provides a hand-written list of all service terminations, which are registered at the sub-directorate in provincial sequence.
2.3 / Verify the lists with each other to ensure that all service terminations are registered.
2.4 / Any differences, which occurred, must be sorted out with the Sub-Directorate Personnel Privileges in writing.
3.0 Withdrawal of Salary
English / Reference /3.1.1 / As soon as an official’s service termination is captured on Persal, note must be taken of amounts indebted by or to an official, which must still be paid to such an official and whether it should be applied fully or partly for any outstanding official debts.
The withdrawal of salary must be reported to the sub-section Personnel Compensation at Head Office two (2) working days before the actual day of receiving the salary.
3.1.2 / Verify that Persal actions, which were conducted by the Persal user, reflect correctly on the Persal system.
3.1.3 / Where the capturing of the service termination was done late on the Persal system and the withdrawal of salary did not materialise, the amount indebted must be disallowed with a BAS journal. The BAS journal will look as follows:
Line 01 Debit
Fund / Vote : Assets & Liabilities Fund
Responsibility : Applicable Responsibility
Objective : Assets
Item : Salary Disallowance Account: CA
Projects : No Projects
Matching field : Persal number
Line 02 Credit
Fund / Vote : Assets & Liabilities Fund
Responsibility : Applicable Responsibility
Objective : Assets
Item : Salary Reversal Control: CA
Projects : No Projects
Matching field : Persal number
Note: Whenever a BAS journal is completed, all relevant source documents need to be attached to it.
NB: the responsible official working in Compensation Control office at Head Office will only do this transaction. The indebted amount will be seen as overpaid salary. / Treasury Regulations 17.1.1 and 17.1.2(a).
Public Finance Management Act Section 40(1)(a)
English / Reference /
3.2 / Withdrawal of deductions on salary.
3.2.1 / As soon as reversals of salaries are activated on Persal, the deductions due are allocated programmatically to the Salary Deduction Disallowance Account. These deductions are the following:
· Home owner’s premiums (0007)
· Garnishee order deductions (0046)
· Cash loans premiums (0197 and 0221)
The Compensation Control office (Head Office) verifies that this activation did take place by making use of the Persal system.
4.0 Possible Amounts indebted to Official
/ English / Reference /4.1 / Every type of amount possibly due is fully discussed below.
4.1.1 / Salary due
4.1.1.1 / Salary indebted to an official, is calculated as follows:
· Last annual notch ÷ 12 months in service; or
· Last annual notch ÷ 365 days x number of days worked.
4.1.1.2 / The annual notch is obtained from the Persal system.
4.1.1.3 / The number of months/days that duties were performed is calculated on the basis of the service termination as obtained from Persal;
· e.g. R30 000 ÷ 12 x 6 months
4.1.2 / Allowances due (e.g. Danger allowance)
4.1.2.1 / Allowances due to the officials are calculated as follows:
· Annual allowance ÷ 12 months
4.1.3 / Payment of possible leave gratuity
4.1.3.1 / Leave gratuity will be paid in the following cases:
· Death;
· Retirement; or
· Medical boarding.
4.2 / Annual leave. / PSCBC Res. 7 of 2000, PSCBC Res. 5 of 2001 and PSCBC Res. 15 of 2002.
4.2.1 / Officials are entitled (as indicated below) to annual leave with full pay during each leave cycle of 12 months, commencing on 01 January of each year:
Employee category / Vacation leave days:
As working days
Officials appointed prior to 1 July 1966 / 28
Other officials:
Less than 10 years service / 22
10 or more years of service / 26
4.2.2 / For the purposes of granting annual leave, working days shall mean Monday to Friday, except in the case of shift workers whose annual leave may be taken on a Saturday and Sunday.
4.2.3 / If due to the official’s service delivery requirements an official’s application for leave is denied and not rescheduled, such leave must, upon request, be paid out to the official at the end of the 6 months’ period allowed with the leave cycle.
4.2.4 / If an official who has been over-granted annual leave with full pay terminated his/her service, the portion of the over-grant, which exceeded his/her normal annual, leave credit on his/her last day of duty must be regarded as an overpayment that must be recovered from him/her.
4.2.5 / If an official’s services are terminated during an annual leave cycle after utilising all his/her annual leave in the leave cycle, the provisions of the above-mentioned paragraphs will be applicable.
4.2.6 / Officials shall be paid a cash value in respect of unused leave credits upon termination of service. The payment will be limited to a maximum number of days equivalent to the annual leave entitlements.
4.2.7 / The leave cycle remains unchanged; therefore, requests and motivations for leave payments in respect of leave credits shall be submitted not later than 31 July in respect of each cycle.
4.2.8 / Payment of annual leave credits shall be calculated using the official’s basic salary (with the exclusion of benefits).
4.2.9 / For all service terminations in respect of personnel without any capped leave and at the expiry of the 6 months period, leave payments shall be accounted in terms of the following formula:
[(A – B) + (C – D)] x E
260.714
Where:
A = Full annual or pro rata leave entitlement in a previous leave cycle
(Pro rata entitlement calculated as X x Y
12
Where:
X = number of completed months of service;
and
Y = annual leave entitlement per leave cycle as per paragraph 4.3.1.1
B = Leave taken in the previous leave cycle
C = Pro rata leave entitlement in the current leave cycle (Calculated as in A above)
D = Leave taken in the current leave cycle
E = Official’s annual basic or pensionable salary as at the last day of duty or at the end of the 6 months period.
NB: For accounting examples, please see Annexure G.
4.3.2 / Annual leave accrued prior to 1 July 2000.
4.3.2.1 / Officials shall retain all audited leave credits accrued prior to 1 July 2000.
4.3.2.2 / The number of accrued leave days prior to 1 July 2000 shall be converted to working days using the following formula:
A x 5
7
Where:
A = Number of audited leave credits
4.3.2.3 / The leave gratuity is calculated according to the leave credits obtained from the Persal system. (For audited period up to 30 June 2000).
4.3.2.4 / The payouts in respect of accrued leave credits shall be made in the event of:
· Death;
· Retirement; or
· Medical boarding
English / Reference /
4.4 / Payment of pro rata service bonus:
4.4.1 / Pro rata service bonus on service termination is payable when an official:
· Retires;
· Dies;
· Discharge – ill health,
· Obliged service termination.
4.4.2 / The only requirement for payment of a service bonus is that such an official is still employed by the Department on the pay date of his/her birthday month.
4.4.3 / The formula for the calculation of pro rata service bonus is as follows:
· Last notch ÷ 12 months x 100% ÷ 365 x number of days as on Persal = pro rata service bonus amount.
4.4.4 / Pro rata service bonus must be verified from the first day of the birth month of official up to the date of service termination.
5.0 Possible Amounts Due by Official
English / Reference /5.0.1 / As soon as a debt is discovered it must be suspended to the disallowance account. Any salary debt must be suspended by the FCO to Salary Disallowance Account. If the indebted amount cannot be recovered immediately, a debt account must be instituted. This action must be managed in full by the relevant FCO. / Treasury Regulation Part 5 Chapter 11. PFMA Chapter 5 Section 38.
5.0.2 / Compensation Control Office (Head Office) must verify that all possible amounts indebted by an official must be disallowed correctly by verifying the account. / Treasury Regulations 17.1.1 and 17.1.2(a).
Public Finance Management Act Section 40(1)(a)
5.1 / The following are examples which can occur:
5.1.1 / Overpaid Salary/Allowance and Leave without payment (LWP)
Where overpaid salaries/allowance and LWP are due by the official, it must be calculated as follows:
· Where a full month’s salary or allowance is recovered, the following formula is applicable:
· Annual notch/allowance ÷ 12 x number of full months salary overpaid/Leave without payments.
· Annual notch/allowance ÷ 12 ÷ number of days of the relevant month x number of days LWP (Leave without payment).
5.1.2 / Homeowners’ premiums deposits after service termination.
Homeowners’ premiums are written back with the reversal of a month’s salary and Persal allocated the indebted amount programmatically to the Salary Deductions Disallowance Account as debt. A debt account must then be instituted by the FCO if the amount cannot be settled immediately.
The homeowners’ premiums can also be recalled as been discussed in paragraph 3.0.1. After receiving the amount, the responsible official at Compensation Control office (Head Office) will allocate the amount to the Salary Deductions Disallowance Account with a BAS journal.
Note: Whenever a BAS journal is completed, all relevant source documents need to be attached to it.
/ English / Reference /
5.1.3 / Debts already instituted and are deducted in instalments.
All debts, which are already captured on Persal before an official’s service termination is activated, will be indicated on a Persal exception report as a departmental commitment.
5.1.4 / Losses
A possible loss that was reported for which the official must pay.
6.0 Reports needed at Service Termination
English / Reference /6.1 / The following reports must be requested monthly by the Office Compensation Control (Head Office) and must be verified for:
6.1.1 / Salary Deductions Disallowance Account
As soon as reversals of salaries take place on Persal, the deductions due are allocated programmatically to the account.
6.1.2 / Salary Disallowance Account
The Office Compensation Control must verify that all debts, which were incurred at service termination, were disallowed by the FCO to the Salary Disallowance Account.
6.1.3 / Salary Debt Account
The Office Compensation Control verifies that all debts, which could not be settled immediately, appear on an interest bearing debtors account.