CARES ACT/COVID-19
There are many purchase orders coded to COVID-19 that will likely not be used. Overstating potential expenses ties up funds that are needed elsewhere. Agencies should immediately review their POs and close any COVID-19-related POs that will not be expended.
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The use of the Coronavirus Relief Fund is in response to a wide variety of needs throughout the state and is benefiting state agencies, cities, counties and their citizens. In order to retain the funds necessary to meet the commitments being made, there must be a stopping point for agency reimbursements.
The CARES FORWARD Steering Committee has directed that August requests for reimbursement of expenditures through July 31 will be the last round of agency reimbursements. Agencies should include in this final request any COVID-19-related expenditures between March 16 and July 31. The CARES FORWARD project team will work with agencies that are heavily focused on pandemic response to provide additional funding for upcoming COVID-19-related expenditures. If you feel you need an exception made to this policy (for example, for something ordered but not received by July 31), please contact [email protected].
Agencies are encouraged to continue coding expenditures and payroll to COVID-19 in the event additional federal money is made available to the state.
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PAYROLL
Please thoroughly review any medical support orders received on employees and respond accordingly. Child Support Services is required to send a National Medical Support Notice and an Income Withholding Order within two business days after the date CSS is notified of an employee who is an obligor in a child support case. Additionally, you may receive an NMSN for an employee who is the custodian of a child if the child support order requires that person to provide health insurance for that child.
Employers and insurers must comply with the NMSN. An NMSN consists of four documents, and the total amount withheld for child support, health insurance premiums and cash medical support cannot exceed the Consumer Credit Protection Act withholding limits. The Oklahoma Department of Human Services Child Support Employer Services Employer Handbook provides guidance for employers when an NMSN is received. Once an agency receives the NMSN, please follow the instructions and process the notice promptly. Any delays in processing the notice could result in a follow-up from CSS and potentially put the agency at risk of sanctions for failing to comply with the notice.
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State agencies are encouraged to review and handle employee overpayments as soon as possible so the adjustment can be recorded in the quarter in which the overpayment occurred. Overpayments not reported to the retirement systems in a timely manner may result in less than a full recovery of funds for the agency and may cause employee retirement calculations to be incorrect. Overpayments may be due to incorrect hours paid, wage amounts or benefit allowance payments.
When submitting the Form 94P, please do not provide copies of personal checks. The form allows the agency to enter the amount recovered. Additional backup data is not required. Please submit the form using the employee ID and do not use the employee's SSN.
If an agency has questions, needs assistance or would like the form reviewed prior to requesting the overpayment from the employee, please email [email protected]. The final form is to be submitted to us only after the agency has recovered the overpaid amount.
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When entering a new employee’s name and Social Security number or updating a current employee’s name, please verify the name and SSN entered is exactly as it appears on the employee’s Social Security card. This is critical in reporting not only the W-2 wages at year-end, but also the Affordable Care Act required health offer/coverage information.
If the name and SSN do not match the Social Security Administration records, the employee’s wages may not be credited to their Social Security account. Additionally, if the name and SSN do not match, the employee may not be reported correctly for ACA purposes which could result in an IRS letter to the employee for possible lack of health coverage or an IRS letter to the agency for not offering coverage.
Beginning Sept. 8, 2007, the Social Security Administration updated the Social Security card. The number holder’s name will always be printed on two lines, with the last name printed directly below the first and middle names. If you receive a prior version from an employee and are unsure, please ask the employee to verify the first, middle and last names.
Additionally, compound names do not need to be hyphenated. If an employee provides a name with an apparent compound or multiple last names, ask the employee which name is the beginning of the last name and which (if any) is the middle name.
Please update the employee’s name in the HCM system as instructed in the COR301 Part II manual beginning on Page 42 (Navigation: Workforce Administration > Personal Information > Modify a Person). You may enter the name the employee currently uses as their paycheck name so their paycheck will continue to reflect the same name as in the past, but the employee record and W-2 information should match the Social Security card.
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If an incorrect Social Security number has been entered into the HCM system, please contact the OMES Service Desk to have the number corrected. DO NOT create another employee in the system; this will only compound the issue. Employees with multiple employee IDs must have data combined onto the one correct record, which requires many corrections and changes in the HCM system.
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When entering a new employee or dependent's name and Social Security number or updating an individual's name, please verify the name and SSN entered is exactly as it appears on the employee's Social Security card. Benefits coordinators should ensure employees are aware of this when providing dependent information. The health insurance plans offered by OMES Employees Group Insurance Division must also submit reports to the IRS for the Affordable Care Act. Incorrect information will cause the insurance plans to receive errors when submitting health coverage information and could result in an IRS letter to the employee for possible lack of health coverage on an individual.
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All compensation to employees and former employees, no matter what form, constitutes wages unless specifically excluded by the Internal Revenue Code. This includes stipends, allowances, employee lawsuits and settlements, gifts, prizes, awards, and fringe benefits, to name a few. Before compensation is given to employees or former employees, agencies must determine the correct method of payment (payroll vs. accounts payable) and reporting required (W-2, 1099 or none). In an audit, the IRS will focus on the reason for the payment.
NOTE: Attorney’s fees paid on a settlement are reportable to the plaintiff if the settlement is a reportable settlement. For attorney fees paid through accounts payable, the amount must be reported to [email protected]. The attorney will automatically receive a 1099-MISC reporting the amount in Box 14 if the correct account code is used on the voucher payment. The plaintiff reporting requires a manual entry and must be reported to OMES.
If the payment settles a lawsuit, the auditor will focus on the basis of the lawsuit. The IRS has a recorded webinar that provides valuable information regarding the taxability of lawsuits and settlements. Agency payroll, finance, human resources and legal departments should obtain the knowledge needed to accurately process compensation to employees or former employees. Agencies are responsible for complying with IRS requirements for withholding and reporting.
If an agency has a settlement agreement that requires the payment be processed through accounts payable instead of the payroll system to expedite processing and the payment is reportable as compensation, then applicable federal, state and FICA taxes must be remitted to OMES on the same day the settlement to the individual is processed. If taxes are not withheld on the payment, the agency must gross up the amount and pay both the employee and employer share of taxes. The employee’s record will be updated for year-end reporting. If additional guidance is needed, please email [email protected].
NOTE: The Internal Revenue Service has determined that Oklahoma public school teachers receiving payments from a state agency are to be treated as employees of the state. As such, any payments to teachers need to be evaluated to determine if the payments should be considered wages. If so, the amounts must be paid through the payroll system, not accounts payable, to be reported on Form W-2 by the paying agency.
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MISCELLANEOUS
With many employees transitioning to laptops, the use of CDs for distributing state agency 1095-C forms is no longer the best method. Secure files will be sent to agencies at year end. In order to send the files, we need contact information for each agency.
Please email [email protected]; [email protected] with the following information for the agency’s primary and alternate contacts:
- Agency number.
- Agency name.
- ACA contact name.
- ACA contact phone number.
- ACA contact email address.
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HIGHER EDUCATION
Transparency (OpenBooks) files are due no later than the fifth business day of the following month. Files must be sent promptly in order to comply with monthly FTE reporting as well as statutory requirements for posting the data to the website. The following are specific field data reminders:
- Jobcode – must be a valid OMES job code. Call OMES HCM Classification and Compensation at 405-521-2177 for assistance with job codes.
- Hours – must be an employee’s accurate hours. The hours reported here will also be used for FTE reporting, along with the pay frequency entered in the file.
- Warrant Number – must contain the required leading 2. This is the actual warrant number processed through the state’s financial system and paid through the treasurer’s office.
- Pay Date – must be the actual warrant issue date processed through the state’s financial system and paid through the treasurer’s office.
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1099 INFORMATION
In August, OMES will TIN Match names and tax ID numbers with the IRS on all vendors that have received 1099 reportable payments for the first half of tax year 2020. By doing this, we will be able to provide more correct information on the 1099 that vendors will receive at year end. We will notify individual agencies of vendors that don’t match with the IRS, and ask them to provide the necessary correct information. Please be ready to respond promptly if/when you are notified.
Please call Alicia Reel at 405-522-9479 or email [email protected], or call Beth Brox at 405-522-1099 or email [email protected] if you have any questions.
NOTE: This does not apply to higher education institutions since they will be doing their own 1099 reporting for 2020.
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ACCOUNTING
We would like to thank all the agencies that submitted their June Form 11 and 11A reconciliations by July 20. Because of your efforts, we were able to post the entries and complete the year-end close in time to meet the scheduled date for submitting the initial Combining Trial Balance to the state auditor’s office. This is a great accomplishment. We know it has been a struggle for agencies to find a way to transact business with the changes brought on us with the coronavirus pandemic. Agencies have had to find a way to continue with business as usual while working remotely. Making a change of that magnitude without adequate time to plan and prepare has been a significant challenge. Only six agencies did not submit their reconciliations by the deadline.
If agencies are experiencing difficulties getting reconciliations reviewed and approved, we are accepting email submissions with the approval included in the email. These submissions must come directly from the approving officer or agency director and must include all required information (SRD report page and the final page of the Treasurer’s Activity Statement). If the forms are submitted by anyone other than the approving officer or agency director, the Form 11 or 11a must include the appropriate signature.
Please let us know if we can provide assistance with any reconciling issues. Submissions must be sent to [email protected].
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FINANCIAL REPORTING
There were only two deadlines for GAAP packages during the month of August. Insurance Claims Liability (Package K) and Infrastructure (Package Y) were due by Aug. 10.
However, be aware Sept. 8 is the deadline for:
- C – Accounts Receivable and Deferred Revenue.
- D – Federal Grants/Entitlement Receivables and Deferred Revenue.
- E – Taxes Receivable.
- F – Due From.
- I – Accounts Payable and Encumbrances.
- M – Lessor.
- R – Interagency Payments.
- X – Miscellaneous.
- Z – Schedule of Expenditures and Federal Awards.
Package Z update:
The GAAP conversion package for the Schedule of Expenditure of Federal Awards has been updated and is available on the OMES website. It has been amended to allow for tracking of COVID-19-related awards. If your agency has any grants or other cash or non-cash awards from CARES, CRF or any other funds, equipment or supplies received from the federal government specifically for the combat of the global pandemic, there is a box to mark for that designation.
If there are COVID-19 funds that are part of another CFDA program, those should be segregated on the SEFA form. For those of you who remember how ARRA funds were handled starting in 2008, this is very similar. This could mean multiple entries are necessary on Package Z for a CFDA program.
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AGENCY NEWS
Transaction Processing would like to remind agencies of the following:
Per the Statewide Accounting Manual, Chapter 10.5.2:
Payment of expenses is restricted to amounts applicable to the fiscal year in which the travel occurred. In addition, payment shall be subject to the availability of the amounts in the agency’s budget.
Vouchers for reimbursement of travel expenses shall not cover more than one fiscal year (74 O.S. § 500.3). In cases where the travel period (days claimed) extends beyond the end of the fiscal year, the travel voucher must closed and a subsequent voucher submitted for the remainder of the trip in the next fiscal year. In addition, the first travel voucher must be annotated to show the travel period is continuous and a copy submitted with the second voucher for verification of the payment history of expenses claimed. If submitted together, a copy of the second voucher must be included with the first voucher.
Agencies must split the travel expenses at midnight on June 30; one voucher will end travel status at 11:59 p.m. on June 30, and the second voucher will begin travel status at midnight on July 1. Lodging incurred the night of June 30 and morning of July 1 should be included on the June 30 voucher. Be sure to cross-reference each voucher for audit purposes. For additional questions regarding this procedure, please email [email protected].
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Last month’s newsletter stated the governing body that sets rules for ACH transactions, NACHA, has released a rule requiring banking information housed by originators of electronic payments be rendered unreadable when stored at rest. OMES and the State Treasurer’s Office are in the process of determining the scope of this issue. Several agencies responded to last month’s article and we appreciate your response. The State Treasurer’s Office will send a survey to all state entities including institutions of higher education. Every agency should complete the survey even if you do not store banking information. Please watch for the survey as your response is very important as the state moves to become compliant with this regulation.
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For State Charitable Campaign contributions to United Way, deduction registers can be submitted by email to [email protected] or mail to:
1444 N.W. 28th St., Oklahoma City, OK 73106.
If you have questions regarding the VPD program, please email [email protected].
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