PAYROLL
Revised CORE How to Document: Payroll Processing For Death of an Employee
This document has been revised to include an updated TRC list, vendor setup requirements, additional screenshots to assist in the payroll processing steps and appendices with related documents. The document can be found on our website.
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OK Child Support – Medical Support Orders
Please thoroughly review any medical support orders received on employees and respond accordingly. Child Support Services (CSS) is required to send a National Medical Support Notice (NMSN) 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 Child Support Employer Services Unit 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 timely. 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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Employee Name and Social Security Number Entries in HCM
When entering a new employee’s name and Social Security number or updating a current employee’s name, please verify the name and SSN being 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 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 possibly not offering coverage.
Current Social Security cards are printed with the number holder’s name 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 can enter the name that the employee currently uses as their paycheck name if desired, so that the paycheck will continue to reflect the same name as in the past but the employee record and W-2 information will match the Social Security card.
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Compensation to Employees and Former Employees, Including Settlements
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 just 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 item is processed/provided to the individual. 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 contact Lisa Raihl at 405-521-3258 or [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 see 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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HIGHER EDUCATION
Open Books Reporting – Reminders
Open Books files are due after the end of the month, by the fifth business day of the following month. The following are specific field data reminders:
Jobcode – This must be a valid OMES job code. If you need to know a job code, contact OMES HCM Classification and Compensation at 405-521-2177 and they will assist you.
Hours – This 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 – The 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.
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1099 INFORMATION
Mid-Year 1099 IRS TIN Match
In August, OMES will TIN Match names and tax identification numbers with the IRS on all vendors who have received 1099 reportable payments for the first half of tax year 2019. We will notify individual agencies of vendors that don’t match with the IRS, asking for them to provide the necessary correcting information. Please be ready to respond promptly if/when you are notified. Please contact Beth Brox at 405-522-1099 or [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 2019.
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ACCOUNTING
Payroll Funding Corrections
Payroll funding correction (PFC) requests are tested against the posted payroll entry and any related PFCs already posted. Agencies must provide the data being corrected using all chartfields included on the original entry. The amount to be corrected must not exceed the posted amount. The account number and bud ref should not be changed. The payroll system assigns the bud ref according to the actual days worked. For payroll periods that cross fiscal years the amounts should be prorated to the appropriate periods.
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TBD Purchase Orders
Agencies should be changing TBD lines on purchase orders to a valid account number if they are to be used. If they are not going to be used, they should be closed. The purchase orders with TBD account numbers are normally established prior to the posting of new fiscal year budgets and utilize the TBD account so that they can be completed and dispatched. Some agencies are including the bud ref on the PO to indicate the applicable year, but some agencies are leaving the bud ref blank. If the PO is to be used, it must be changed to include proper funding. Until this is done, the allotment budgets on the ABC report will not reflect the encumbrance, and agencies could have the potential to over-encumber for the FY 20 budgets. The TBD must be changed on the PO before a voucher is created against the encumbrance. If the TBD account number is still on the PO, the vouchers created against it will be deleted upon receipt when Transaction Processing runs the TBD Voucher query (twice daily). A public query is available for agencies to get a complete list of purchase orders with a TBD account number. The query name is OCP_PO_TBD_ACCTS_BR. If the TBD purchase orders are created with the bud ref of 20, the query will need to include that as a prompt. If the TBD purchase orders are created without a bud ref, the query can be run leaving the bud ref prompt blank.
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DEPOSITS
Duplicate Deposits
Instances of duplicate deposits have been increasing. If a deposit has been completed and budget checked, it will not show up in the normal deposit entry screen. Direct journal deposits are entered using the Accounts Receivable>Payments>Online Payments>Regular Deposit navigation. To view a deposit after you have clicked on the Apply Deposit link and entered data, users must use a different navigation. Depending on how far you have processed the deposit, it would be found in one of the following navigations:
Accounts Receivable>Payments>Direct Journal Payments>Create Accounting Entries
Accounts Receivable>Payments>Direct Journal Payments>Modify Accounting Entries
If you are unsure if your deposit was saved, please check the Create Accounting Entries or Modify Accounting Entries navigation to look for the deposit before creating a new deposit. You can search using an operator ID and/or an accounting date criteria if you are unsure of the deposit number.
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FINANCIAL REPORTING
Public-Private Partnerships
Business arrangements that involve government entities working in tandem with private organizations are known as private-public partnerships or PPPs. An example of a PPP is a construction project where the government and a business share in the funding of a construction project and split revenues after completion.
While PPPs are rare in the State of Oklahoma, this is likely to change as the objectives of state leadership become more receptive to the practice. Meanwhile, the GASB continues to address the accounting treatments related to these agreements. GASB 60, which was released in November of 2010, discussed the concept of Service Concession Arrangements. Then, GASB 90 was released eight years later to set standards for how majority equity interests would be reported by governments. A current project of the GASB suggests that a standard in the near future will be creating rules that cover all types of PPPs.
Keeping this in mind, OMES Financial Reporting asks that state government finance officers be aware of agreements that will need to be monitored. If any are discovered, please contact your financial reporting analyst to open a dialogue regarding the information that will be needed to be reported going forward.
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Upcoming GASB Implementations
As OMES Financial Reporting works to prepare the fiscal year 2019 CAFR, GASB Statement 83 “Certain Asset Retirement Obligations (AROs)” will be implemented. AROs are liabilities incurred by a government in order to dispose of an asset. Examples include necessary property clean up, costs to remove underground storage tanks or disposal cost related to medical equipment. The statement requires that liabilities be recorded at the time an obligating event occurs, which could mean at the time it is determined the asset will be retired, or even at the acquisition of an asset where it is known that the eventual disposal will be accompanied by costs to the owner.
Another statement being implemented for FY 2019 is GASB 88, “Certain Disclosures Related to Debt.” This statement has the objective of improving disclosures for direct borrowing or direct placements. While this is unlikely for general fund agencies, please inform your OMES Financial Reporting analyst if your agency is a party to such an arrangement.
As always, if you have any questions pertaining to the GASB, feel free to contact anyone in OMES Financial Reporting.
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OMES HUMAN CAPITAL MANAGEMENT
SAVE THE DATE: Health and Payroll Deduction Expo Set for Sept. 11 in OKC and Sept. 26 in Tulsa
All state employees are invited to attend this year’s expo. We have included a second date and location in Tulsa. A variety of wellness screenings will be offered as well as immunizations. The expo will be from 8:30 a.m.-2:30 p.m. at both locations. Stay tuned for more details and information. If you have any questions, please contact [email protected].
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Volume 30, Number 2
Fiscal Year 2020
Aug. 15, 2019
In This Issue ...
TRAINING
Form I-9 and E-Verify Webinars
E-Verify has launched several new videos to help employers better understand how to use E-Verify.
The videos in this series will teach you how to:
Each video is less than five minutes and provides valuable information.
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OKC American Payroll Association Monthly Lunch & Learn Chapter Meetings
Topic: TBD
Friday, Aug. 16, 2019, 11:30 a.m.
For more information please visit their website.
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Payroll Law 2019
Presented by Fred Pryor Seminars
Aug. 13, 2019 - Ardmore
Aug. 14, 2019 - Oklahoma City
Aug. 15, 2019 - Tulsa
Nov. 18, 2019 – Tulsa
Nov. 19, 2019 – Oklahoma City
For more information, please visit their website.
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2019 Oklahoma Payroll Conference
Presented by the Northeastern and Oklahoma City Chapters of the American Payroll Association.
Thurs., Sept. 19, and Fri., Sept. 20, 2019
Northeastern State University
3100 E. New Orleans St.
Broken Arrow, OK 74014
For more information please visit their website.
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Best Practices for Payroll Taxes and 1099 Issues
Presented by the Oklahoma Society of Certified Public Accountants
Friday, Nov. 15, 2019 – Tulsa, OK
For more information, please visit the OSCPA website.
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The Complete Guide to Payroll Taxes and 1099 Issues
Presented by the Oklahoma Society of Certified Public Accountants
Monday, Dec. 9, 2019 – Oklahoma City, OK
For more information, please visit the OSCPA website.
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Contacts
State Comptroller:
Lynne Bajema, CPA
405-522-5577
[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
405-521-4679
[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
405-521-3258
[email protected]
Purchase Cards and Travel (Online Booking) Assistance:
Linda Powell
[email protected]
Vendor Registration:
Victoria Baker
405-522-3093
[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]
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