Benefits Responsible Cost Objects

Cindy Miesbach Author

06/27/2025 Added

2 Plays

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This video describes which cost objects are responsible for paying for employee benefits.

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[00:00:02.200]This video explains how
[00:00:03.800]employee benefits are paid by university cost objects.
[00:00:08.400]When a department is looking at the balance of its cost objects
[00:00:11.700]on a financial report, it is important to know which cost objects
[00:00:16.400]are responsible for paying for benefits and which are not.
[00:00:21.100]Knowing how benefits are paid will help you identify
[00:00:24.400]benefits responsible cost objects on financial reports,
[00:00:28.700]thereby allowing you to better manage your department's finances.
[00:00:34.600]For each university employee, the university pays
[00:00:38.500]wages and incurs other expenses that provide for employee benefits.
[00:00:44.400]First, let's clarify what benefits expenses we are discussing.
[00:00:49.700]Benefits expenses
[00:00:50.300]are identified and tracked with six digit
[00:00:54.300]general ledger account numbers that start
[00:00:57.400]with 519. Benefits expenses
[00:01:01.100]include the university's contribution to the funded retirement program.
[00:01:07.100]FICA contributions, which include Social Security and Medicare,
[00:01:12.400]the university's contribution
[00:01:14.300]to employee group health insurance and group life insurance.
[00:01:18.600]remission of tuition and fees granted to university staff
[00:01:22.600]and graduate assistants, unemployment compensation
[00:01:27.100]and worker's compensation.
[00:01:30.300]Using funds associated with one or more cost objects,
[00:01:34.500]the hiring department pays an employee's wages.
[00:01:38.600]However, depending on the source of funds, a department's cost
[00:01:43.200]object may or may not be responsible for the employees benefits.
[00:01:48.900]You may recall that the University is
[00:01:50.800]financed by four major funding sources.
[00:01:54.500]All cost centers for Revolving/Auxiliary funds
[00:01:58.300]and WBSs for grants and contracts,
[00:02:02.300]and University of Nebraska Foundation funds are responsible for benefits.
[00:02:08.100]This means that benefit expenses will post to these cost objects
[00:02:12.700]and will affect the cost object's balance.
[00:02:17.100]On the other hand, in most cases, state-
[00:02:20.500]aided cost centers are not benefits responsible.
[00:02:24.800]Instead, the Chancellor, on behalf of the institution,
[00:02:28.900]handles benefit expenses for most state-aided cost centers.
[00:02:33.900]Therefore, when a department is reviewing
[00:02:36.300]a financial report for most state-aided or 21 cost centers,
[00:02:41.100]benefit expense postings will not affect
[00:02:44.100]the final balance.
[00:02:47.200]However, it is important to know that some state-aided
[00:02:51.000]cost centers are responsible for benefits.
[00:02:55.400]Benefits-responsible state-aided cost centers begin with 21
[00:02:59.600]and their third through sixth digits
[00:03:01.600]Identify the responsible area’s subprogram
[00:03:04.600]and department number, as expected.
[00:03:08.100]It's the last four digits of their smart numbering
[00:03:11.200]that identifies them as benefits responsible.
[00:03:15.200]These benefits responsible cost centers
[00:03:17.600]are referred to as special twenty-ones.
[00:03:20.800]The following state-aided cost centers are responsible for paying
[00:03:25.500]for employee benefits, and are identified by their last four digits.
[00:03:31.000]The last four digits of “F and A” or
[00:03:33.300]Facilities and Administration funds begin with four.
[00:03:37.700]The last four digits of Programs of Excellence
[00:03:40.500]funds begin with 51 or 52.
[00:03:44.500]If the last four digits begin with 58, they are differential tuition funds,
[00:03:50.100]which are associated with certain colleges that charge a higher tuition rate.
[00:03:55.800]NRI funds’ last four digits
[00:03:58.200]range from 6000 to 6499.
[00:04:02.300]Funds from the Nebraska Tobacco Settlement
[00:04:04.900]Trust, known simply as Tobacco Funds,
[00:04:08.300]use the range of cost centers ending in 6500 to 6999.
[00:04:14.600]Because these funds are unique,
[00:04:16.800]you will know if one of these cost centers is assigned to your department.
[00:04:22.900]Thanks for taking time to become
[00:04:24.800]familiar with benefits responsibility
[00:04:27.800]and to identify benefits-responsible and non benefits responsible cost objects.
[00:04:34.100]Distinguishing these cost objects on financial reports
[00:04:38.100]is important to managing your department's finances.

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