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CAR Newsletter April 2018

FEDERALLY FUNDED AGENCIES

Update on Pension Allowability Issue

Defined Benefit Plan Employees

States have been advised that OMB has drafted a change in the regulations that may alleviate this issue.  The language and the expected date of issuance is unknown.  For now we are just waiting.

Defined Contribution (Pathfinder) Plan Employees

Agencies should not be charging federal programs for amounts remitted to the OPERS Defined Benefit plan for employees who are on the Pathfinder plan.  The expenditure code for the non-allowable portion is 513300.

OMES will be arranging a meeting of CFOs from federally funded agencies and other involved parties to discuss the issues.

PAYROLL

Employee Moving Expense Payments Are Now 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 January 1, 2018 through December 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 non-paying, taxable earnings so that 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 payroll system, taxes will be withheld from the gross amount and the employee will receive the net payment.

SoonerSave Contributions and Eligible Compensation

As a reminder to agencies, certain types of earnings are eligible for deferral to SoonerSave while others are not considered eligible compensation.

Annual leave payout is generally eligible for SoonerSave deferral on termination of employment.  However, payments on severance from employment do not qualify as compensation for SoonerSave deferrals.  Therefore, payments under voluntary buyouts (VOBO) and reductions in force (RIF) would be excluded from deferral consideration.

SoonerSave deferrals may only be taken on compensation from an agency for services performed, including regular pay, overtime, shift differential and other similar payments.  If an amount would have been paid had the employment continued, (such as annual leave) then deferrals may be taken.  

Please advise employees that changes in deferral amounts must be submitted to the SoonerSave administrator and approved before processing through payroll.  For additional information, agency personnel should contact their SoonerSave coordinator or the SoonerSave administrative office at 1-800-733-9008 or 405-858-6781.

Deceased Employee Payroll Processing and Reporting

Agencies must complete Form DER, Deceased Employee Reporting when an employee dies and payments are made after the date of death. The form is on the OMES website under CAR Forms. Complete all forms and send to OMES/CAR payroll, attention Jean Hayes as soon as possible after all payments have been processed.

Procedures for processing payroll after the death of an employee are available in the HCM how-to document titled "Payroll Processing for Death of an Employee".

NOTE: Remember to update the date of death on the HR Personal Data Record, update Job Data for a termination with the reason code ‘SO4’ (deceased), and terminate the employee’s direct deposit. Banks will return direct deposits for deceased customers.  A return of an item will cause a delay to the individual receiving the payment.

Outstanding Wages Beneficiary Designation Option

40 O.S. § 165.3a, allows employers to provide employees the option of designating a beneficiary for wages and benefits payable upon an employee’s death.  There is no requirement for an employer to allow employees to select beneficiaries, but agencies may want to consider adopting such a policy.  Providing the option to employees would relieve stress and anxiety after the death of the employee on the family members.  Also, agencies would have clear guidance on who is to receive final wage payments and avoid any potential difficulties in determining who should receive the payment(s). 

This statute does not include any longevity payment that may be due as of the date of death of an employee.  74 O.S. § 840-2.18, subsection H.2, authorizes any longevity payment to be paid to the decendant’s surviving spouse, or if there is no surviving spouse, to the decedent’s estate. 

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

Submission of OMES Form 94P - Tidbits

When an employee reimburses a payroll overpayment, please complete and submit the OMES Form 94P as soon as the reimbursement is made.  The form should not be submitted until the full amount has been paid back to the agency. 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 back up data is not required.  

The form requires the State EmplID be entered.  This has been changed for the privacy and security of the employee. Please do not submit with the social security number or any other number.

1099 INFORMATION

1099 Tax Information Quarterly Report

The first quarter of the 2018 tax year is now complete, and it is time for State Agencies to run their Miscellaneous 1099 Tax Information Report which should include all transactions from January 1, 2018 through March 31, 2018.  The path for this report in PeopleSoft Financials is:  Accounts Payable, Reports, Payments, Misc Tax Information Report.

With this report please review the following:

  • 1099 FLAGS:  Please pay attention to the 1099 Flag where Y means Yes, the vendor should receive a 1099 and N means No, the vendor should not receive a 1099.  A 1099 will not be printed if the 1099 Flag is N.  A vendor does not need a 1099 if they are registered as a corporation, non-profit organization or government entity, (the exception to this is if the payment is for a legal or medical payment and they will receive a 1099). 

  • NAME & TIN:  Make sure that the Name and Tax ID number (TIN) match the information on the vendor’s W-9.  An additional name may need to be added so that it will match with the IRS.  Only the Supplier Name prints on this report, but if you have an Additional Name it will be added in the vendor file and will print on the 1099.

  • ADDRESS:  The designated address for 1099 reporting is Address 1 in the vendor file.  If the 1099 Flag is N, then new addresses will be added but Address 1 will not change.  Otherwise, if Address 1 is not the address that should be on the 1099 please have the vendor submit a Vendor/Payee Form or W-9 requesting that the 1099 address be changed.

  • TOTALS:  Review all warrants processed with 1099 reportable account codes for each vendor and make sure all are accounted for.  (Any warrant corrections need to be made at the agency level.) 

Your corrections to this report should be sent to the OMES by April 30, 2018.  You may send your corrections to the email address listed below or you may print the report, write in the corrections and send it in via interagency mail.  If you have questions, please contact Beth Brox at 405-522-1099, or by email at [email protected].

ACCOUNTING

Oklahoma Child Support and Financial Reports

OMES/CAR centrally pays Oklahoma child support for all state agencies on the Oracle/PeopleSoft HCM system. The timing of this process may result in a balance in the 994 class funding at the end of a month.

CAR runs the process to report and make payment to the OCSS/Oklahoma Centralized Support Registry, PS vendor ID 0000190715, every Monday.  The process is run for payments with dates from the second previous Saturday through the previous Friday. For example; paychecks with an issue date between 3/24/2018 – 3/30/2018 were processed to pay child support withholdings on 4/2/2018.

In PeopleSoft Financials, a journal entry is created to remove the funds from the agency’s 994 fund.  Journal entries created by CAR will be Allocation Journals (ALO) and begin with ‘000’. The agency will see a debit to the 633190 account and a credit to 101000. The timing of these payments may affect an agency’s reconciliation to the Summary of Receipts and Disbursements (SRD) ending cash balance as well as the available cash shown on the Allotment Budget and Available Cash (ABC) report. Agencies may have amounts withheld in one month that are not paid until the next month. Please keep this in mind when reconciling with the SRD and ABC reports. Agencies can run the following queries to assist with the reconciliation:

  • Query OCP_PR_WH_ACCT_BAL_DETAIL

  • Query OCP_PR_WH_ACCT_DETL_BY_PERIOD

Agency payroll personnel must notify CAR of any items that will affect the amount to be paid.  Items that could affect the amount to be paid include refunds to employees for amounts withheld in error and reversals of payroll warrants. If CAR is not notified and payment is processed, the agency’s 994 fund will be out of balance. The agency will be responsible for contacting the Department of Human Services child support division and attempting to get a refund.  If the funds have already been disbursed to the recipient, the money might not be refunded back to the agency. Timely communication from the agencies is critical in these situations.

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

Single Audit

Due to issues that have recently come to light involving the Oklahoma State Department of Health, the auditors have informed us that there are now additional federal programs that must be audited as part of the 2017 State of Oklahoma Single Audit.  Because of this additional audit work, the audit will not be completed by the deadline.  Auditors anticipate issuing this audit on or before June 30, 2018.  Federal agencies have been notified.

If agencies would like to have a copy of the notification that was sent to federal agencies to provide to your specific contacts, please request by e-mailing Stephanie Brown at [email protected].

BUDGET

Hyperion and FY19 Budget Work Programs

The Hyperion system is still offline.  Agencies will use the same spreadsheet process to submit their FY19 budget work programs (BWP) as was used for their FY18 budgets.  The OMES budget division will provide FY19 BWP instructions to agencies once the 2018 legislative session has concluded.  Please contact your OMES budget analyst if you have questions.

Strategic Plans Are Due This Year

Please remember that the statutory deadline for agency strategic plans is October 1st.  These plans are due every even numbered year on October 1st.  As you are preparing your plans, please feel free to reference the state’s strategic plan at http://okstatestat.ok.gov/

If you have questions or need guidance, please reach out to your OMES budget analyst

FINANCIAL REPORTING UNIT

LEASE REPORTING TO CHANGE

In June 2017, the GASB released Statement number 87 (GASB 87) entitled Leases. While the title is short, the effort required to implement this new standard will be long and arduous.

Currently, financial reporting standards require that all new leases be evaluated to determine if they should be classified as “capital” or “operating.” For agencies that have material lease expenses, the evaluation is done in the preparation of GAAP Package L. Leases that fit the definition of operating are simply expensed, as is already done in Peoplesoft. Leases that fall under the category of capital leases, though, require far more diligence in tracking since they must be capitalized and depreciated over the life of the lease agreement.

Under the guidelines of GASB 87, the concept of an operating lease has essentially ended. Only short-term leases, and short-term leases are very narrowly defined as leases that are no more than a year and non-renewable, can simply be expensed. Considering that currently the vast majority of leases reported by the State of Oklahoma are classified as operating, this will likely take a significant effort to make the necessary adjustments.

GASB 87 will not take effect until Fiscal Year 2021. This means there is plenty of time to get the data together. That said, the new standards will require retroactive implementation, so it is recommended that every agency begin a project to identify all existing leases and determine their capital values. The OMES Financial Reporting Unit will begin gathering this data in advance of the implementation period due to the need to restate prior periods.

As always, your Financial Reporting Analyst at OMES is available to assist you with any questions related to GAAP reporting.

SEFA Reminder

During the audit of the Schedule of Federal Awards (SEFA), the State Auditor’s Office asked that we remind all agencies that receive federal awards: when federal funds are transferred between two state agencies, it is important that the agency receiving the funds be notified that the funds are from a federal grant. The distributing agency should always inform the receiving agency of the CFDA number for the program from which the funds were provided. This will reduce errors made in the preparation of the transfer section of the Package Z.

AGENCY NEWS

Electronic Payment Requirement

O.S. § 62 Section 34.64 requires that funds disbursed from the State Treasury must be sent electronically.  State agencies are able to request an exemption from this requirement with cause.   All exemptions granted by the Office of the State Treasurer (OST) for FY2018 will expire June 30, 2018.    

State agencies can obtain the FY2019 Request for Exemption beginning Tuesday, April 10.   State agencies must complete and submit the FY 2019 Request electronically via email to OST at [email protected].  Only requests submitted using this document and to the web address noted below will be considered.   Agencies should submit their request by May 15, 2018, to ensure their exemption(s) can be processed before July 1. If you have questions about how your agency can send electronic payments, please contact Kiran Nallayahgari, Banking and Treasury Services Director at [email protected].

Volume 28, Number 10
Fiscal Year-2018
April 9, 2018
HTML Version


TRAINING

PeopleSoft HCM Suite Training

Training for new processors
Presented by OMES/Enterprise Business Service
Please contact your agency's nominating official to enroll.
Dates: Apr. 23 – Apr. 26, 2018
Location: OMES/CAR Computer Training Room, 5005 N. Lincoln Blvd., Oklahoma City 73105

Form I-9 and E-Verify Webinars

U.S. Citizenship and Immigration Service
Multiple Webinar Choices and Dates:

Form I-9: an overview of the Form I-9 process, including step by step instructions on how to complete each section, retention and storage.
E-Verify Overview:  an overview of the E-Verify Program, including how the program works, key features, how to enroll, employer responsibilities, program highlights, and a demonstration of the program.

E-Verify for Existing Users: a detailed overview of the E-Verify Program specifically for existing users. Topics include Form I-9, user roles, case alerts, how to handle a TNC, and common user mistakes.

For more information on the webinars, please visit the USCIS website.

OKC Chapter American Payroll Association Monthly Lunch & Learn Chapter Meetings

OKC American Payroll Association
Monthly Lunch & Learn Chapter Meetings

For more information, please visit the OKC APA website

Payroll Law 2018

Presented by Fred Pryor Seminars
April 16, 2018 - Oklahoma City
Aug. 16, 2018 – Oklahoma City
Aug. 17, 2018 – Tulsa
1-Day Seminar cost - $149
For groups of 5 or more - $139 each
For more information, please visit their website