WE GUIDE ORGANIZATIONS SELLING TO THE FEDERAL GOVERNMENT

Legacy of a Timecard

By Linda Mahnke

Who Am I?

I am a timecard.

The woman, who wrote on me and gave me to her supervisor for approval, is smart. She is an electrical engineer. She works for three different Program Managers on five different projects. She works long hours, and has to keep her tasks straight; she switches from one project to another several times during her workday, and works many weekends. I know she is very good at what she does, because my predecessor has a code for a lower pay grade; she got a promotion.

I know she possesses an awesome memory, because she often fills me out on Friday afternoon - or even on Monday morning - to record how much time she spent on each project, during the whole week. Almost all of her recorded time goes directly to projects, with no "down" time. She rarely charges time to staff meetings, co-worker birthday celebrations, or other administrative functions; she must be dull and anti-social.

I have no revisions, even after her supervisor reviews me. Accuracy among the projects she charges is not my purpose. After all, I am only required to trigger the Accounting Department to issue her paycheck.

Effect on the Budget

Company-wide Budgets

My owner's supervisor approves me and forwards me to the Payroll Clerk. Payroll uses the data that my owner recorded - hours, by project - to compute the gross amount for the paycheck. Because my owner is on salary, the gross amount is always the same. The data recorded on me seems redundant. The number of hours for each project, and each administrative function, yields a proportion of total hours for each. This proportion of the gross paycheck amount is allocated to each project, and each administrative function. That's a lot of work for a paycheck that never changes - regardless of which projects were charged. Then again, the Accounting Department is anal retentive.

After each project has its allocated share of the gross pay, that amount is recorded in the accounting ledger as a cost of the project. This has no effect on my owner's paycheck.

Near the end of the year, the company executives get together and work out a budget for next year. They start with how much each project - or each type of project - cost in the past. Based on actual costs in the accounting ledgers, they estimate how much each continuing and each similar project will cost in the future. Historical costs are the basis for next year's budget.

If my owner records inaccurate hours on me, now, those inaccuracies have a direct impact on the next budget. But I am only required to trigger the Accounting Department to issue her paycheck.

Proposals for Future Projects

In addition to company-wide internal budgets, I am processed in a company that usually must propose a price to each customer, for each new and expanded project. The program managers are technically excellent, so price is not so important. On the other hand, internal management estimates the project costs, before proposing a price to the customer. They don't want to lose money, accidentally, on a project. To budget costs on a proposed project, they start with actual costs of a similar project.

For both project proposals and company-wide budgets, past direct labor costs recorded in the accounting ledger are the primary basis. I am proud to contribute my data to allocate these costs among projects; I am a significant part of the budget process. My owner believes I am only required to trigger the Accounting Department to issue her paycheck.

Effect on Customer Invoices

Some of our customer sales are on cost-reimbursement contracts. As my company pays for costs on a contract, those costs are included in our customer invoice.

My owner works on five different projects and three different contracts. Two of the projects that belong to the same contract are near completion. The design phase of that contract is a cost-reimbursement project. The deliverable product portion of that contract has a fixed price, regardless of the costs to my company.

My predecessors show that my owner recorded more hours on the fixed price project, for work on the final product. This week, my owner is not recording any hours on the fixed price project; all of her efforts on this almost-complete contract are for the design of the product. Designing a product after building it does not seem logical to me. Perhaps the budget for the fixed price project is overrun.

After my data is used to allocate my owner's paycheck among projects, the fixed price project will show no additional costs. The cost-reimbursable project will show unfairly high costs. The costs recorded in the accounting records are the basis for customer invoices on the cost-reimbursable project.

In order to keep from overrunning the budget on the fixed price project, my company will overcharge our customer on the cost-reimbursable project. Claiming excessive costs are not my owner's concern. I am only required to trigger the Accounting Department to issue her paycheck.

Required for a Paycheck

I am the most valuable possession of my owner. I trigger the Accounting Department to issue her a paycheck.

Because I am so important - I feel disrespected, when she does not record her "comp" time. She does work many hours of unpaid overtime, and earns the compensatory time. My purpose in life is conveying a record of her hours worked. She always records her overtime hours, assigned to the project or task on which she works. If her supervisor approves time off, as an offset, that time should also be recorded.

My owner, like all of the employees of my company, earns Paid Time Off for illness, vacation, and other obligations outside work. Any shortfall between actual time worked and a weekly sum of 40 hours is charged to an administrative project. In addition to recording inaccurate administrative costs in the accounting ledger - the "comp" time is not tracked. Neither my owner's supervisor nor the Accounting Department knows when "comp" time is exhausted and Paid Time Off should be charged. My owner might take more Paid Time Off than she accumulated for the pay period I represent.

One of my colleagues, a timecard for a non-exempt hourly employee, often reminds me of my diminished value, on this point. I remind him that his owner worked less than 40 hours in previous weeks, and recorded the 42 hours he worked this week. Under- and over-40-hour weeks are not averaged. His owner will be paid for two hours at time-and-one-half, despite past weeks' records. An accurate timecard of hours worked is even more important for him than for me. My salaried owner's paycheck won't be affected by incorrect timing of hours worked.

I am the source document for initiating the payroll process. After receipt, the Payroll Clerk computes and/or verifies gross pay and deductions. My data is vital to calculate gross pay, FICA (Social Security and Medicare), income taxes, and employee contributions to the pension plan; each of these deductions is, generally, a percentage of gross pay. Without my data, neither gross pay nor the percentage-of-gross deductions can be calculated. Even the paycheck of my salaried owner is required before payroll processing. If she takes unpaid time off, terminates employment during the pay period, or records some other reduction of hours - the gross pay changes from her usual salaried amount.

I am required to trigger the Accounting Department to issue her paycheck.