NIDC

EOS Provision Calculation is Wrong in September, 2020

Author: Eng. Sami Mahmoud

Position: Senior Oracle HCM Track Lead
Creation Date: 05, October 2020
Version: 1.0
Issue
The Calculation of End of Service Provision in September showing wrong figures for All Employees.

Example:

Employee #47

Gross Salary: 33,805.17

Jul, 2020 Aug, 2020 Sep, 2020

Monthly EOS 2,911.00 5,728.10 -187.81
Total EOS 196,727.2 202,455.39 202,267.58
9

Breakdown
Total End of Service Calculation is based on Years, Months and Days of Service. Gross Salary is the
Salary which End of Service will Calculated on, where there are two bands:

- End of Service: EOS

- Gross Salary: GS
- Years of Service: YOS
- Months of Service: MOS
- Days of Service: DOS

1. Total Years of Service <= 5 Years

- EOS Years Amount = (GS / 2) * YOS

- EOS Months Amount = ((GS / 2) / 12) * MOS
- EOS Days Amount = ((GS / 2) / 360) * DOS
- Total Amount = EOS Years Amount + EOS Months Amount + EOS Days Amount

2. Total Years of Service > 5 Years

- EOS Years Amount = GS * YOS

- EOS Months Amount = (GS / 12) * MOS
- EOS Days Amount = (GS / 360) * DOS
- Total Amount = EOS Years Amount + EOS Months Amount + EOS Days Amount

3. EOS Provision Fast Formula

EOS Provision Fast

Formula.sql
Issue Root Cause
After a session with NIDC technical team to understand the issue our HCM consultant find
the root cause of the issue and scenarios as bellow:
- The root cause of the EOS Provision Issue in September, 2020 was a wrong
calculation in (EOS Provision) Fast Formula on August, 2020 were the Calculation
was retrieving wrong amounts.

- The implemented EOS Formula was Not taken the Months of Service in Calculation
and also wrong number of days of service where the Days of Service is Calculated
based on the Difference between (anniversary Hire Date & Payroll Period End Date),
Example Employee #47, Calculation Month August 2020: (31-Aug-2020 & 07-Apr-
2020) = 146 Days.

- There is an Update was done on the Fast Formula in 16, Aug 2020 and this was a
correction on the Fast Formula Code.

- The issue will be appeared for the correct employee next payroll run.
- For example: Employee #47

July, 2020 August, 2020 September, 2020

YOS 8 8 8
MO 3 4 5
S
DOS 25 25 24

EOS
Calculation Factor July - 2020 August - 2020 September - 2020
YOS <= 5 84,512.92 84,512.92 84,512.92
YOS > 5 101,415.5 101,415.5 101,415.5
MOS 8,451.292 11,268.39 14,085.49
DOS 2,347.581 2,253.678 2,253.678
Actual Total 196,727.29 199,450.48 202,267.58
System Calculation 196,727.29 202,455.39 202,267.58

- System was mess calculation on August 2020 by not calculating MOS & DOS = 146
Days.

- A Correction action has been made after made a change on the Fast Formula; so, the
value of EOS Provision in September = -187.81
Our Solution
In EOS calculation the Variable (M) was calculated without rounding; so, for some
employees the Months of Service = 6.99 instead of 7.
for example: Employee #150 in October, 2020
Actual Service Duration:
- YOS = 1
- MOS = 7
- DOS = 15

Formula Calculation:
- YOS = 1
- MOS = 6
- DOS = 45

We Change the calculation of Variable (M) to be round; so, the MOS corrected and now
formula calculated like the Actual calculation and the result is the correct figure (20,422.13).

Change on formula (EOS Provision):

Investigation Report Conclusion
- The EOS Calculation Formula is Calculating the EOS Provision on Monthly Basis
where the Monthly EOS Provision is the Difference between the Total EOS Provision
till the Current Month and the Total EOS Provision till the Last Month.

- The EOS Provision Calculation is fixing and Wrong Calculation in Previous Months
Automatically without any Additional Effort, in this Case there is no need to do any
further action because the system Corrected the EOS Provision and the latest
Calculated Balance is Accurate.

- A Trace message has been amended to the fast formula so we can trace the issue as
the following:

- We build a report that show all employee EOS balances and you can use it now will
find a snap of the report in last report page after update the EOS calculation.

- The following Extract shows the latest EOS Provision for all Employees for September
2020.

NCDIP-EOS
Balance.xlsx