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CAR Newsletter – October 2020

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Newsletter Archive | Statewide Accounting Manual | Forms | State Comptroller


Deadlines for November payrolls

In planning your work for November, remember Veterans Day is Wednesday, Nov. 11. Thanksgiving is recognized on Thursday, Nov. 26, and Friday, Nov. 27 is also a state holiday. November biweekly payroll for state agencies (B or C biweekly schedules) will be paid on Friday, Nov. 6, and Friday, Nov. 20. November monthly payrolls will be paid on the last working day of the month, Monday, Nov. 30.

With these dates in mind, agency staff should plan their work accordingly for the deadlines:

SUPPLEMENTAL: PeopleSoft supplemental payrolls are set to pay on Thursday, Nov. 12. Agencies should have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 4.

BIWEEKLY: B and C biweekly payrolls are set to pay on Friday, Nov. 6. Agencies should have these payrolls processed and paperwork forwarded to OMES by Oct. 30.

The next biweekly pay date for B and C biweekly schedule agencies will be Friday, Nov. 20. Agencies should have these payrolls processed and paperwork forwarded to OMES by Friday, Nov. 13.

For the Friday, Dec. 4, biweekly pay date, agencies should have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 25.

MONTHLY: Monthly payrolls will be set to pay on Monday, Nov. 30. Agencies should have these payrolls processed and paperwork forwarded to OMES by Thursday, Nov. 19.

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W-2 reporting of Families First Coronavirus Response Act wages

The IRS requires Form W-2 reporting for qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act. All agencies should be reporting the Emergency Paid Sick Leave and Extended Family Medical Leave wages through the Human Capital Management system with the correct earnings codes. Please be sure to report all wages correctly before the end of the calendar year. This required reporting provides employees who are also self-employed with information necessary for properly claiming qualified sick leave equivalent credits or qualified family leave equivalent credits under the FFCRA.

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Federal student loans reminder

As a reminder, the U.S. Department of Education has cancelled all wage garnishments orders for federally held, defaulted student loans through Dec. 31, 2020. Please do not resume garnishing any employees until/unless you receive written direction from the U.S. Department of Education to do so. Agencies with questions should call the Department of Education’s Default Resolution Group at 800-621-3115 and choose the employer Option 1.

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Submission of OMES Form 94P

When an employee reimburses a payroll overpayment, please complete and submit the OMES Form 94P as soon as the reimbursement is made. Timely submission helps ensure corrections are reflected in the quarter in which they occurred for proper reporting and also helps in the full recovery of OPERS retirement amounts. If the retirement system is not aware of an overpayment and the pending overpayment refund request, payouts to former employees may be incorrect, resulting in a loss to the agency. In addition, retirement calculations may be incorrect if the overpayment is not reported timely.

Please do not provide copies of personal checks. The form allows the agency to enter the amount reimbursed. Additional backup data is not required.  

The form requires the state employee ID be entered. This is for the privacy and security of the employee. Please do not submit with the Social Security number or any other number.

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Employee moving expense payments are taxable

The 2017 Tax Cuts and Jobs Act suspends the tax-free exclusion of qualified moving expenses paid to or on behalf of an employee by an employer. The suspension period is for tax years beginning Jan. 1, 2018, through Dec. 31, 2025.

Authorized moving expenses paid directly or indirectly to or for an employee will be taxable as wages and must be processed through the payroll system. This includes payments made with the P-card and those processed through accounts payable.

If paying the employee directly (through accounts payable) or a third party for moving expenses, the agency must notify its payroll department of the amount paid. The amount must process through the payroll system as nonpaying, taxable earnings so the amount will be taxed and properly reported on the employee’s W-2. We recommend the amount be processed through payroll on the employee’s next paycheck. Delaying until the end of the year could cause a hardship for the employee by taking the taxes out during the holidays. Delaying could also cause issues with collecting the employee taxes if the employee has terminated employment.

For any amounts paid directly to the employee through the HCM system, taxes will be withheld from the gross amount and the employee will receive the net payment.

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Payroll warrant reversals

When a payroll warrant is reversed, payable time entered in Time and Labor is set back to Estimated status in the HCM system. For a replacement check to be issued before the reversal is complete, it requires entering time upon which to be paid. Completion of the reversal after the replacement check results in duplication of the time worked in the system and potentially a duplicate payment to the employee if not reviewed and corrected.

Agencies should not issue a replacement until the reversal is complete to mitigate any wage and tax balance discrepancies.

If an agency absolutely cannot wait for the reversal to complete before issuing a replacement, the agency is responsible for removing the payable time created by the reversal. The agency must also review employee wage balances when processing a replacement check to ensure all wage and tax balances will be correct after the reversal is completed.

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Using state vehicles to commute

O.S. 47 § 156.1, as amended, prohibits the personal use of state-owned motor vehicles but permits the use of the vehicles for commuting in very specific situations. 2007 OK AG Opinion 18 also addresses this issue.

When a state employee is allowed to commute in accordance with the statute or the attorney general opinion, the agency must notify the governor, the president pro tempore of the Senate and the speaker of the House of Representatives. In addition, when an employee is using a vehicle from OMES Fleet Management, the agency must complete CAM/FLEET MGMT – FORM 022 Authorization for Commuting in State Vehicle.

The IRS considers commuting to be a noncash taxable benefit to the employee even when the use of the vehicle is for the benefit of the employer. There are very few exceptions to the taxability of commuting. Exceptions are for certain vehicles that are not likely to be used for personal use because of their design. These vehicles are listed in IRS Publication 15-B.

  • The method of calculating the taxable fringe benefit is dependent on the employee’s status.
  • Commuting rule: Most state employees may use the commuting rule. Under this rule, the value of a vehicle provided to an employee for commuting is computed by multiplying each one-way commute by $1.50. If more than one employee commutes in the vehicle, this value applies to each employee. This amount must be included in the employee’s wages or reimbursed by the employee.
  • Cents per mile: A cents-per-mile method may also be used by most state employees.
  • Automobile lease valuation rule: Elected officials or employees whose compensation is at least as great as a federal government employee at Executive Level V (for 2020; $160,100) are not allowed to compute taxable income under the commuting rule. These officials and employees must use the automobile lease valuation rule to compute taxable income.
  • All valuation methods are described in detail in IRS Publication 15-B.

The employee may choose to have the value included as taxable income or pay the employer for personal use rather than having it treated as wages. When treating the value as wages, the imputed income is subject to FICA and income tax withholding. The taxable amount, if not paid by the employee, must be processed through payroll so that taxes are calculated and amounts are reported on the employee's W-2.

Process the taxable amount through the HCM system using the TRC code of CAR, which will show as earnings code CAR. The amount will be included as taxable income and will be taxed on the paycheck.

We recommend the vehicle usage be included in the employee’s payroll each pay period to prevent a large sum from being included in the employee’s last pay of the calendar year, resulting in a higher than normal amount of taxes withheld. Additionally, up-to-date reporting of vehicle usage will benefit the agency should the employee terminate during the year.

For more information, please contact Lisa Raihl at 405-521-3258, [email protected] or Jean Hayes at 405-522-6300, [email protected].

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Payroll warrants issued in error

If, for any reason, an agency receives a payroll warrant issued in error, the warrant should be returned as soon as possible to OMES for cancellation. Payroll warrants must be accompanied by an OMES Form PWC.

Warrants issued by the state treasurer, which, for any cause, remain outstanding or unpaid for a period of 90 days shall be revoked and canceled under the provisions of O.S. 62 § 34.80. For warrants canceled by statute, the cash is transferred to the canceled warrant fund. Agencies will not be refunded the value of the canceled warrants.

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Payroll stat-canceled warrants not eligible for reissue

Agencies should be reviewing the PS Financials Payroll 36-Month Statutory Cancellation Report on a regular basis.

If there is a payroll warrant listed and the employee is entitled to the funds, please complete OMES Form 20R and send to OMES CAR Transaction Processing. This will allow a replacement warrant to be issued to provide the employees their due pay.

If there is a payroll warrant listed and the employee is not entitled to the funds, the issuing agency must notify OMES. (O.S. 62 § 34.80) Notification should include the warrant number, warrant date and must be signed by an agency approving authority. Please send notification to OMES CAR Transaction Processing stating that the warrant should not be reissued. In addition, the amounts must be removed from the employee’s earning record. Please contact Lisa Raihl at 405-521-3258, [email protected] or Jean Hayes at 405-522-6300, [email protected].

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State HCM system use of addresses on W-2s

As a reminder, in the HCM system, the W-2 process loads the employee’s mailing address for IRS Form W-2 reporting. If there is no value in the mailing address field, then the employee’s home address will be used on the W-2. If there is a value in the mailing address field that is not to be used on the Form W-2, it must be updated or inactivated.

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State HCM system use of addresses on 1095-C, ACA Reporting Form

The 1095-C form process in the HCM system has been set to load the employee’s mailing address just as the W-2 process does. If there is no value in the mailing address field, then the employee’s home address will be used on the W-2. If there is a value in the mailing address field that is not to be used on the Form W-2, it must be updated or inactivated.

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Agency address verification

Please verify the correct agency address is being used on the HCM system. The agency address can be found on the Employee’s Earnings Statement. If the address is not correct for the agency, this must be updated before year-end processing of tax forms. Please call the OMES Service Desk at 405-521-2444 to have the agency’s address updated in the HCM system.

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PeopleSoft mail drop for year-end processing

The HCM system employee W-2 and 1095-C forms are processed and printed in mail drop order. Please ensure this field is properly used for employees. The forms will print in the same order as checks and advices sort, which is based on each agency’s needs.

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State agency W-2 forms will be printed from the PeopleSoft HCM system. The format for the W-2 forms will be the same as that used last year. Envelopes that fit the 2019 PeopleSoft W-2 forms should fit the 2020 W-2 forms.

The format for the 1099 MISC forms is the same as last year. The forms will have three sections, with the top and middle sections of the page containing the two copies of the form and the bottom section of the page containing mailing addresses. Instructions will print on the back of the form. Standard No. 9 or No. 10 envelopes with left windows should work. The new 1099-NEC will also fit the envelopes.

Sample printed forms of the PeopleSoft W-2, 1099 MISC and 1099-NEC can be provided, if requested. Please contact Jean Hayes at 405-522-6300 or [email protected], or Alicia Reel at 405- 522-9479 or [email protected]

NOTE: This is not applicable for the institutions of higher education due to the fact they will be responsible for their own year-end reporting.

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November payroll deadlines

In planning your work for November, it is important to remember Veterans Day is Wednesday, Nov. 11.  Thanksgiving is recognized on Thursday, Nov. 26, and Friday, Nov. 27, is also a state holiday. With these dates in mind, please adjust your payroll processing schedules as needed. All payroll documents must be received five business days prior to the actual pay date to ensure adequate time for audit and processing.

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Prompt payment information

Late payment to vendors – New interest rate – FY 2021

The FY 2021 interest rate applicable to late payments to vendors has been set at 0.12% per annum, or $0.0003 per $100 per day, which will be in effect July 1, 2020, through June 30, 2021. This interest rate is provided by the state treasurer based on the average interest rate for 30-day time deposits of state funds during the last calendar quarter of the last preceding fiscal year. (O.S. 62 § 34.71 & 34.72 and O.S. 74 § 500.16A and OMES Prompt Payment Rules/Regulations)

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Review 1099 Reportable Transactions Report

Each agency should review their 1099 reportable transactions for the first three quarters of the calendar year 2020. Agencies should run and print the 1099 Transaction Report in the PeopleSoft system. The report path is:

Accounts Payable --> Reports --> Payments --> Misc. Tax Information Report

Specify your agency number and select the date range as 01/01/2020 through 09/30/2020.

As you review this report, please note the IRS Name, TIN, 1099 address and 1099 Flag are our primary concerns. All vendors that need to receive a 1099 should have a Y in the 1099 Flag column. If it shows an N and the vendor needs a 1099, please indicate the change with your corrections. If a 1099 Flag is N, there is no need to submit a change of address since the vendor will not receive a 1099; otherwise please verify the address where the 1099 should be sent.  The amounts are listed on the report, so as you reconcile, you can make sure all payments are accounted for.

Return the report and all available W-9s to document your changes (even if it is only an address change) to OMES on or before Friday, Oct. 30, 2020. Your timely review and response to this report will allow us time to update the vendor file in order to have the best information possible for the final report, which will need to be reviewed the first week of January 2021.

The 1099 report is processed in a PDF format. Insert any changes or comments through Adobe Acrobat and save. Email the corrected report to [email protected] or [email protected]. Please password protect the document and send the password in a separate email. If you have any questions or comments regarding this matter, please call Beth Brox at 522-1099 or Alicia Reel at 522-9479.

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Audit report deadline – Pensions/component units/colleges and universities

All pension trusts, colleges and universities, and other component units (with a fiscal year end of June 30) should be working with their auditors to complete financial statements. The deadline for submitting these, and any necessary financial reporting packages, to the OMES Financial Reporting Unit is Oct. 31. Failure to complete these statements in a timely manner jeopardizes the state’s ability to complete the audit of the CAFR in time to meet disclosure requirements set forth by bond issuers and the GFOA. A potential risk of missing the deadline includes a downgraded bond rating for the state. All component units are expected to ensure their auditors are aware of the deadline and complete their final reports in time for you to provide it to OMES no later than Oct. 31.

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SEFA for audited component units

The OMES Financial Reporting Unit has fielded several questions regarding the Schedule of Expenditures of Federal Awards/single audit causing delays for the issuance of financial statement audits. Due to expected OMB guidance related to COVID-19 grants not being available until November, single audits cannot be completed prior to the Oct. 31 statutory deadline for component unit financial statement audits.

An SEFA does not need to be included in the financial statement audit, and omitting one will not cause the component unit to be out of compliance with the statutory requirements. Our suggestion is that the single audit be released under separate cover, at least for the fiscal year that ended June 30, 2020.

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PeopleSoft Financials update

The PeopleSoft Financials upgrade project will go live in November. The exact date is dependent on several factors currently in motion. In preparation for the cutover, OMES has put in place a code freeze.

What is a code freeze? It is a freeze on any modification that requires development effort made to the application. This also includes any design changes.

A freeze stabilizes the system to reduce risk and avoid disruptions of the application in preparation for the cutover.  

The code freeze starts Oct. 9, 2020, and will last until the upgrade is live.  

Requests received via Cherwell will receive notice of the freeze in place. If it is deemed an emergency with a justification provided by OMES Central Accounting and Reporting or OMES Central Purchasing, it will be addressed appropriately.

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AP Workflow information

The AP Workflow process within PeopleSoft provides a means for invoices to be approved within the system without routing paper or emails throughout the agency. It also allows the agency to track unpaid invoices through the process so accounts payable staff can easily see the status of an invoice. Once the invoice is entered into PeopleSoft, the voucher routes for approvals to the appropriate individuals as specified by the agency in the initial setup of the module. Routing can be varied based on the amount of the invoice, the departments or other criteria. Vouchers can be held for further review, pushed back or denied if not accurate or if the agency is waiting on a service or product before the voucher is submitted for payment. The process also eliminates the need for a batch slip and the voucher jacket (15A) signature as the approval in PeopleSoft serves as the approving officer signature.

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Volume 31, Number 4
Fiscal Year 2021
October 8, 2020

In This Issue ...


Professional Development Training

Registration is now open for the Oct. 29 Professional Development Training hosted by several area chapter AGA organizations. 

Attend the PDT virtually and earn CPE credits on several topics from handling the COVID-19 crisis to ethics and "Legacy, Leadership & Transformation" from the national AGA president.

Register now!

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The Complete Guide to Payroll Taxes and 1099 Issues – Virtual

Presented by the Oklahoma Society of Certified Public Accountants

Thursday, Dec. 3, 2020 – Tulsa, OK

For more information, please visit the OSCPA website.

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Monthly Lunch & Learn virtual chapter meetings

Presented by American Payroll Association Oklahoma City Chapter

Topic: TBD

For more information, please visit the website.

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[email protected]

State Comptroller:
Lynne Bajema, CPA
[email protected]

OMES Services CAR Accounting:
Jennie Pratt, CPA, CGFM
[email protected]

Agency Business Services/Deputy State Comptroller:
Steve Funck, CPA, CGFM
[email protected] 

Financial Reporting Unit:
Matt Clarkson, CPA
[email protected]

Transaction Processing Manager:
Steve Wilson
[email protected]

Statewide Accounts Payable:
Courtney Cowart
[email protected]

Replacement Warrants:
[email protected]

Voucher Processing:
[email protected]

Payroll Transaction Processing:
Elsa Kunnel
[email protected]

Payroll Reporting:
Lisa Raihl, CPA
[email protected]

Purchase Cards Assistance:
Linda Powell
[email protected]

Travel Office (and online booking tool):
[email protected]

Vendor Registration:
Victoria Baker
[email protected]

Vendor File Maintenance:
[email protected]

Vendor Remittance Updates:
Updates to remittance contact for vendor payment notification.
[email protected]

OMES Service Desk:
405-521-2444 or toll-free 866-521-2444
[email protected]