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May 2019 CAR Newsletter

Newsletter Archive | Statewide Accounting Manual | Forms | State Comptroller


Payroll Fraud


Since August 2018, the state has experienced 15 known fraudulent attempts to change an employee’s banking information. Ten of those attempts have been successful. OMES has distributed various AAA memos to state finance officers and has included articles in past CAR newsletters regarding these occurrences along with steps for agencies to take to prevent them. State agencies and institutions of higher education are still being targeted because the steps below have not been taken. As recently as last week, a state entity was the victim of a fraudulent phishing scam aimed at changing employee direct deposit information. It is imperative that agency directors, finance officers, human resources staff and payroll staff take these attacks seriously, as these attempts are only increasing in frequency.

An email about this issue will be sent in the next few days to all employees who have access to make banking information changes in the state payroll system. Employees will be asked to respond affirming that they have read and understand the steps below.

Immediate steps to take:

  • Agencies must pull all Payroll Change/Direct Deposit forms from their public websites and move the forms to an intranet or distribute by employee request only. 
  • Additionally, until otherwise notified, personnel who handle employee payroll direct deposit procedures should verify ALL requests for changes to direct deposit by personally contacting the employee by phone and verifying information such as employee ID number, employment start date, etc. Do not contact the employee by responding to an email requesting the change. Make direct contact and ensure you are actually communicating with the employee and not someone posing as the employee.
  • We advise agencies to set a time delay when changing direct deposit information to decrease the chance of wage theft.

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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 DCAM/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 2019; $148,500) 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 employees’ 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 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 Processing and Submission Requirements – Reminder

As a reminder, agencies must submit payroll information to OMES by the established deadlines. The deadlines are set for your protection. Agencies failing to meet deadlines are putting their employees at risk of not being paid on payday.  The responsibility for late payroll is on the agency if deadlines are not met by the agency. OMES will notify agency directors when payroll is not submitted by 3 p.m. five business days prior to payday. 

Agencies must submit the following payroll documents to OMES Transaction Processing:

  1. The final Budget Check Report.
  2. The final Claim Document – signed.
  3. The CA GL Interface Trace File. 

Institutions of higher education must submit the following payroll documents to OMES Transaction Processing:

  1. The Validate PFT Funding Report.
  2. The Claim Document – signed.

All documents must be received five business days prior to the actual pay date to ensure adequate time for audit and processing. Once OMES receives the documents, the reports will be reviewed and the payroll will be released to be picked up by a process that sends the checks and direct deposits to the Office of the State Treasurer for further processing.

Payroll documents must be received by 3 p.m. in order for payroll to be released to the OST file on that day. If the paperwork is not received by 3 p.m., the payroll will be held until the paperwork is received.  

Payroll documents and correspondence regarding payroll should be submitted to [email protected].

NOTE: Remember that Monday, May 27, is Memorial Day, which impacts the payroll submission deadline.

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Payroll Stat Cancelled Warrants Not Eligible for Reissue

Agencies need to review 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 Transaction Processing so that a replacement warrant can be issued.

If a payroll warrant is listed and the employee is not entitled to the funds, the issuing agency must notify OMES (O.S. 62 § 34.80). Notification must include the employee name, warrant number, warrant date and amount. The notification must be signed by an agency approving authority. Please send notification to OMES 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 Jean Hayes at 405-522-6300, [email protected], or Lisa Raihl at 405-521-3258, [email protected], to have this completed.

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W-2 Reporting of Employer-sponsored Group Health Insurance

Beginning in 2012, the IRS mandated Box 12 reporting of the cost of employer-provided health coverage. The W-2 must show the amount in Box 12 with Code DD.  To correctly report the cost of health coverage, all payments (both employee and employer) made for health insurance must process through the payroll system. Failure to process through payroll will result in incorrect reporting on the W-2. 

This reporting to employees is for their information only.  The amount reported is not taxable and is only intended to inform them of the cost of their health care coverage.  

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

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Processing of Taxable Fringe Benefits with Payable Wages

When processing non-paying taxable fringe benefits for employees through payroll, only include the amount when processing payable wages. Non-paying taxable fringe benefits such as vehicle usage (CAR/VEH), cash tips (CAT), moving (MOV), miscellaneous (MIS) are subject to taxes and require payable wages in order to collect the employee share of taxes. Questions may be directed to Lisa Raihl at 405-521-3258, [email protected], or Jean Hayes at 405-522-6300, [email protected].

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Military Differential Wage Payments – Taxation and Reporting

Military differential wage payments are payments made to an employee during the period the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and represents all or a portion of the wages an employee would have received from the employer if the individual was performing services for the employer.

Military differential pay is includable as wages for income tax purposes on Form W-2, but is excludable from Social Security and Medicare taxes. To correctly report military differential wage payments, Time Reporting Code MILDF (earnings code MLD) must be used.

The military differential pay is also included in for OPERS, OLERS and URSJJ retirement contributions and must be correctly coded in order for the information to be sent to the retirement systems correctly.

Please refer to O.S. 72 § 48 and OAC 260:25-15-44 for additional information related to leave of absence due to military service.

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Payroll Processing Deadline

REMINDER - All agency payroll responsibilities must be completed and documents must be submitted to OMES by five business days prior to the actual pay date.

This deadline is primarily for the protection of the agency and the employee and allows for unknown contingencies or system issues that may occur. It also allows for OMES certification and the turnaround time needed to process the payment. Payrolls received by 3 p.m. are processed the same day if there are no issues. Payrolls received after 3 p.m. will process the following day.

NOTE: Delay in agencies not meeting the 3 p.m. deadline will result in delayed processing of the payroll. We do not promise to meet your payroll needs when our established deadlines are not met.

Agencies should retain the original payroll documents. Scanned documents should be emailed in lieu of the originals to [email protected]. As a backup method, the documents may be faxed to 405-521-3383. The agency must verify the transmission was successful by the confirmation on the agency’s fax machine. OMES will initiate the payroll claim processing procedure upon receipt of the emailed or faxed documents (BY THE 3 P.M. DEADLINE).

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W-9 Requests for Agencies

From time to time vendors, that state agencies make payments to, ask for a W-9. Since OMES has responsibility for the State FEI number, this type of request should be forwarded to OMES Central Accounting and Reporting to have the form properly completed and signed by the state comptroller, Lynne Bajema. We will create the W-9 properly and forward it to the requesting agency or vendor. Please send requests as needed to Beth Brox, 405-522-1099, [email protected], or Jean Hayes, 405-522-6300, [email protected], or Alicia Reel, 405-522-9479, [email protected].

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Clearing and Agency Special Account Reconciliations

Fiscal year end is quickly approaching and it is important that agencies have cleaned up any reconciling items on their clearing or ASA reconciliations. Timely and accurate reconciliations are important to proper financial reporting. If your agency needs assistance with the reconciliations, please contact OMES Central Accounting as soon as possible. All journal entries, corrections and revisions should be completed before year end.

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FY 20 Treasury State Agreement

OMES has evaluated federal awards received by state agencies to determine the programs to be included on the FY 20 Treasury State Agreement as required by the Cash Management Improvement Act of 1990, as amended. Programs that had expenditures exceeding 0.60% of the state’s total federal expenses in the FY 18 Single Audit Report will be included for consideration.

The expenditure threshold for FY 20 has been calculated as $40,784,564. Finance officers in state agencies with selected programs will receive an email requesting a review of the FY 19 funding techniques and clearance patterns. Any new programs included will be required to provide their funding techniques and clearance patterns.  Please complete the email’s survey by the date provided.

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Method of Booking Airfare

With the passage of SB 240 the current mandatory travel booking contract with FCM (SW 210) facilitated through the state’s online booking tool will no longer be mandatory effective Nov. 1, 2019. Going forward, agencies wishing to use a travel agent of their choice will not be required to obtain an exemption from the State Travel Office.

Please note this change does not negate the mandatory statewide contract (SW 215) which remains in effect with American Airlines. An agency using the online booking tool will see the airfare related to the contract with AA as well as price comparisons with other airlines. Lower priced flights will be clearly identifiable.

An agency using a separate travel agent is likely to experience a more complicated effort to ensure the agency is getting the AA contract fares or better. Agencies should work closely with their travel agent to ensure they are receiving the contracted fares with AA.

All other travel procedures and restrictions remain in effect. If you have questions, contact [email protected].

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Electronic Payment Requirement

O.S. 62 § 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 for FY 2019 will expire June 30, 2019

State agencies can obtain the FY 2020 Request for Exemption beginning Monday, April 22. State agencies must complete and submit the FY 2020 request electronically via email to OST at [email protected]. Only requests submitted using this document and emailed to OST will be considered. Agencies should submit their requests by May 20, 2019, 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 Banking and Treasury Services Director Deidra Salim at [email protected].

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Volume 29, Number 11
Fiscal Year 2019
May 8, 2019

In This Issue ...


OKC American Payroll Association Monthly Lunch & Learn Chapter Meetings

Topic: Generational Leadership.

Friday, May 17, 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

For more information, please visit their website.

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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 and Travel (Online Booking) Assistance:
Linda Powell
[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]