CAR Newsletter - August 2015

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Office of Management and Enterprise Services Logo

Notice anything different? How about the new OMES logo? OMES has done some remodeling and being on target with our new trend we present to you our newly revamped Newsletter. This is now the Central Accounting & Reporting Newsletter or CAR Newsletter for short. It's really all of the same information with a new look and a new name.  We hope you enjoy.


Employee Moving Expenses

Authorized payments of employee moving expenses under 74 O.S. § 500.51 et seq, either directly or indirectly to an employee, may be taxable and/or reportable on the employee’s W-2. Payments may be for qualified or non-qualified moving expense reimbursements and require close review to ensure proper reporting is completed.

Qualified moving expenses paid or reimbursed by an employer can be treated as an excludable fringe benefit to the employee. The exclusion only applies to the reimbursement of moving expenses that the employee could deduct if he or she had paid or incurred them without reimbursement. Please refer to IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits, and IRS Publication 521, Moving Expenses, for additional information. Qualified moving expense reimbursements paid directly to the employee are reported on Form W-2 only in box 12 with code “P”. Qualified moving expenses paid by an employer directly to a third party on behalf of an employee (i.e. moving company) are not reportable on Form W-2.

Non-qualified moving expense reimbursements, paid directly to an employee or indirectly on behalf of an employee, are taxable to the employee and are included on Form W-2 in boxes 1, 3, 5, and 16 with the applicable taxes withheld and reported. No box 12 reporting is required for non-qualified moving expense reimbursements.

A common error occurs when employee moving expenses are paid through accounts payable without notifying agency payroll personnel. Agency business practices must ensure communication between the different departments. Good communication and procedures will allow for the correct reporting of all moving expense amounts as required by the IRS. When moving expenses are paid through accounts payable, please forward all relevant information to agency payroll personnel for inclusion on the employee’s W-2 at year end as needed. Payroll personnel will need to review the information, and if taxable to the employee, process through payroll so that taxes are calculated and withheld and the amounts are reported on the W-2.

Process the taxable amount through payroll using the TRC Code of “MOVE,” which will show as earnings code “MOV.” The amount will be included as taxable income and will be taxed on the paycheck.

Amounts determined only to be reportable on the employee’s W-2 in box 12, will need to be forwarded to OMES, 5005 N. Lincoln Blvd., Suite 100, Oklahoma City, OK 73105-3324, Attn: Lisa Raihl or Jean Hayes. Please include in the memo, the employee name, employee ID number, and amount to be included on the W-2 in box 12 with code “P”.

For questions or more information, please contact Lisa Raihl at 405-521-3258 or, or Jean Hayes at 405-522-6300 or

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Using State Vehicles to Commute

Title 47 O.S. § 156.1, as amended, while forbidding the personal use of state-owned motor vehicles, permits the use of the vehicles for the commuting of designated employees.

The personal use of an employer-provided vehicle to commute constitutes a noncash taxable benefit to the employee even when the use of the vehicle is for the benefit of the employer. Excepted are qualified nonpersonal-use vehicles (any vehicle not likely to be used more than minimally for personal use because of its design). Please refer to IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits, for a list of vehicles generally included as qualified nonpersonal-use vehicles.

The employee can 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 valuation method is dependent on the employee status. Control employees (elected officials or employees whose compensation is at least as great as a Federal government employee at Executive Level V - for 2015; $148,700) cannot use the commuting valuation rule ($1.50 rule). All other employees can have the value computed using the Automobile Lease Valuation Rule, the Vehicle Cents-Per-Mile Rule, or the Commuting Rule ($1.50 rule) subject to the requirements of each rule.

All valuation methods are included in IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits. The most common method is the Commuting Rule ($1.50 rule) for valuing employee use of an employer-provided vehicle. The employer must require the employee to use the vehicle for a business purpose; it cannot be voluntary on the employee's part. Personal use for commuting can be valued at $1.50 each way between home and work. If more than one employee commutes in the vehicle, each rider has imputed taxable income. The taxable amount, if not paid by the employee, must be processed through payroll so that taxes are calculated and withheld and the amounts are reported on the W-2.

Process the taxable amount through payroll 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 highly recommend the vehicle usage be included in the employee’s payroll each pay period (for the previous pay period, as needed). This will preclude a large sum being included in the employee’s last pay of the calendar year which would result 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 questions, please contact Lisa Raihl at 405-521-3258, or Jean Hayes at 405-522-6300,

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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 OSF Form PWC.

Warrants issued by the State Treasurer which, for any cause, remain outstanding or unpaid for a period of ninety (90) days shall be revoked and canceled under the provisions of 62 O.S. § 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 Cancelled 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 the OMES Form 20R and send to 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. (62 O.S. § 34.80.) Notification should include the warrant number, warrant date, and must be signed by an agency approving authority. Please send notification to 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, or Jean Hayes at 405-522-6300,

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Project Website Updated

Information has been added to the higher education separation project website.  The webinar from July 8, 2015, is available and the Aug. 5, 2015, webinar will be published soon. All information that has been published can be found in one area on the OMES CIO website.

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Upcoming Project Q & A Session

Aug. 19, 2015, will be the next Q&A session.  Additional information will be forthcoming via the GovDelivery system. To receive this notification, and others related to the project, subscribe to the ‘Higher Education Payroll Processing & Reporting’ topic by clicking here.

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ACA Notification for Agency HR Representatives

This article is not applicable to institutions of Higher Education.

Representatives of the Human Capital Management Division are continuing their review of data for accuracy. The GO_PY_NOT_PAID_SINCE_PROMPT query in PeopleSoft HCM was run again to see how many active employees in the system have not been paid since Dec. 31, 2014. The results yielded over 2000 rows, this has gone down slightly from the initial 2300 rows when it was first run.

In the past, employees have been left in an active status even when they were not actively working. Due to new regulations that mandate more accurate reporting, this practice is no longer acceptable and inactive employees must be terminated.

Please run the GO_PY_NOT_PAID_SINCE_PROMPT query in PeopleSoft HCM using the date of Dec. 31, 2014 and review the employees on the list from your agency. After reviewing, enter termination rows for all employees who are not currently active.

The termination date must be entered retroactively. For example, if the last check for an employee was November 2014, then enter the corresponding date as the termination date. If an employee was on leave and never returned from leave, enter the termination date that corresponds to the end of the leave period.

Additionally, for those employees who terminated after January 1, 2015, you must also fill in the ACA Employee Eligibility page. The employee will need history as of 1/1/2015. Therefore, if the initial load did not enter data for the employee, enter the appropriate status as of 1/1/2015 or as of the employees hire date, whichever is later. Then, enter a second row for the termination.

We ask that you complete this task by Aug. 31, 2015. We appreciate your attention to this matter. If you have any questions, please contact the Human Capital Management Division of OMES at

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Proper Use of 700 Funds

Agency Special Accounts, including 700 funds are only permitted by statute for specific purposes. Agencies or institutions of higher education should not be using 700 funds as operating funds unless specifically allowed by statute (ie, workers compensation, unemployment compensation, evidence funds).  Agencies are allowed to use a 700 fund as its clearing account.  All receipts that flow through the clearing account that are not for the specific allowed purpose of the 700 fund must be transferred to the proper operating funds monthly. 

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No Changes to Voucher Batch Slips after Submission

Do not make changes to voucher batch slips once they have been submitted to OMES for payment. OMES continues to see cases in which there are multiple copies of batch slips for the same agency and same pay group being submitted. Submitting multiple copies of batch slips, including “revised” batch slips, delays the overall processing time for auditing vouchers and voucher payment. It is the agency’s responsibility to ensure the correct vouchers are on the batch slip before it has been submitted to OMES for payment. If a voucher that needs to be processed for payment was not included in a batch that was sent to OMES, the voucher will need to be added to a new batch slip with a different pay group and then submitted to OMES.

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Processing Rejected Vouchers for Payment

All rejected vouchers must be put on a new batch slip in order to be resubmitted for payment. OMES has seen cases in which agencies have quickly corrected a voucher and have assumed it would pay with the original batch. During an audit, if OMES needs to reject a voucher, the pay group is removed and the batch slip is altered to reflect the rejection; once the audit of the batch is complete, the batch is submitted for payment with the next pay cycle. It is not feasible for OMES personnel to add the corrected voucher back into the original batch the voucher was submitted with, regardless of the type of rejection or how quickly the rejection was corrected.

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Audit Report Deadline – Pensions/Component Units/College & Universities

Now that business has closed for Fiscal Year 2015, all pension trusts and component units (with a fiscal year 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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State CAFR Receives Award

The Certificate of Achievement for Excellence in Financial Reporting has been awarded to the State of Oklahoma by the Government Finance Officers Association of the United States and Canada (GFOA) for its comprehensive annual financial report (CAFR). The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents significant accomplishment by a government and its management.

The CAFR has been judged by an impartial panel to meet the high standards of the program including demonstrating constructive “spirit of full disclosure” to clearly communicate its financial story and motivate potential users and user groups to read the CAFR.

The GFOA is a nonprofit professional association serving approximately 17,500 government finance professionals with offices in Chicago, IL, and Washington, D.C.

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GAAP Package Deadlines

As of July 29, the first round of GAAP packages were due to the Office of Management and Enterprise Services Financial Reporting Unit (FRU). If your agency is required to provide a form for cash, deposits and investments, inventory, capital assets, leases, long-term obligations, or compensated absences and those have not been turned in, they are currently delinquent. Please complete and return those as soon as possible.

The state has set a goal of releasing the fiscal year 2015 CAFR two weeks earlier than has ever been achieved before. To do so, the FRU needs the cooperation of all agencies to meet the stated deadlines. Your financial reporting analyst will be happy to assist you in any way necessary to meet those deadlines.

The next GAAP package deadline—for insurance claims liability and infrastructure assets—is Aug. 12.

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State Paycard Conversion

JPMorgan Chase has discontinued their Paycard product and will not be accepting direct deposit payments to state employee paycard accounts after 9/30. As a result the state will be moving to KeyBank for a new paycard solution. The KeyBank card utilizes the same surcharge free ATM Network as the current JPMorgan Chase Paycard.  For additional information regarding the KeyBank solution please visit their website.

Your agency paycard contacts should have received correspondence from the Office of the State Treasurer (OST) regarding next steps in the conversion process. If you have not received information from OST and believe that you have active employees on the Paycard program please contact Diedra O’Neil at or 405-522-4256 for additional information.

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Volume 26, Number 2
Fiscal Year-2016
August 14, 2015

In This Issue ...


Mark Your Calendars – PCI DSS Seminar Sept. 10, 2015

Payment Card Industry (PCI) Data Security Standards (DSS) require merchants to protect sensitive cardholder information.  PCI DSS compliance requirements mandate that each state agency accepting credit card payments complete an annual assessment of their card processing environment. The Office of the State Treasurer (OST) is again working with Coalfire Systems and will be hosting a seminar where Coalfire Systems will review the security requirements related to business and IT staff and the process for completing your annual assessment. Bank of America will also be present to discuss the EMV requirement and the upcoming liability shift. Your agency CFO and PCI Contact will receive additional information regarding the seminar time and location in the coming days.

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15th Annual Oklahoma Payroll Conference

Friday, Sept. 18, 2015

Presented by the Oklahoma City and Northeastern Oklahoma Chapters of the American Payroll Association 

Renaissance Tulsa Hotel & Convention Center
6808 South 107th E. Ave.
Tulsa, OK  74133

$195 Prior to Aug. 15, 2015
$225 after Aug. 15, 2015

For more information you may view the brochure by clicking here.

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2015 Fall Nonresident Alien Tax Compliance Training Workshops

Offered by Arctic International LLC

Tropicana Hotel in Las Vegas, NV

Sept. 28-Oct. 1, 2015 

The workshops are geared towards developing solid skills and learning how to manage nonresident alien tax compliance. They also offer WEBshops as an alternative to traveling for the training. The Workshop class schedule, the WEBshops, and all of the details are available on their website.

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Payroll Law 2015

Lawton – Sept. 30, 2015

Oklahoma City – Oct. 1, 2015

Tulsa – Oct. 2, 2015

Presented by Fred Pryor Seminars

1-Day Seminar cost - $149

For groups of 5 or more - $139 each

For more information, please visit their website and select a location.

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The Complete Guide to Payroll Taxes and 1099 Issues

Hosted by the Oklahoma Society of CPAs

Presented by Surgent McCoy, CPE LLC

Monday, Nov. 16, 2015, in Oklahoma City

Topics include payroll tax requirements for wages, employee benefits, and reimbursements, fringe benefit and special issues, gross-up calculations, tax deposits, and complying with reporting requirements. Additional information can be found on their website

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Payroll 101: Foundations of Payroll Certificate Program

Offered by the American Payroll Association

San Antonio, Texas or Las Vegas, NV

Classes are held several times throughout the year at both locations.

The class is designed to help employees understand the procedures and processes in all aspects of payroll to include new employee forms, calculating pay, withholding and paying taxes, and preparing tax returns. The classes can be found on the APA website.

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Payroll 201: Payroll Administration Certificate Program

Offered by the American Payroll Association

San Antonio, Texas or Las Vegas, NV

Classes are held several times throughout the year at both locations.

The class is designed for employees who have the fundamentals of payroll and wish to improve job performance and gain more knowledge. The class gets more in-depth in all aspects of payroll to FLSA, taxable fringe benefits, paying non-resident and resident aliens, corrections to Form W-2 and 941. The classes can be found on the APA website.

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Jennie Pratt, CPA, CGFM

General Ledger:
Dan Thomason, CPA

Lisa Raihl, CPA

Transaction Processing:
Steve Wilson

Payroll Processing:
Elsa Kunnel

AP Manager:
Patricia Garcia, CPA, CGFM

ISD Finance:
Cathy Menefee, CPA, CGFM

Vendor Maintenance:
Victoria Baker

OMES Service Desk:
(PeopleSoft questions)

Financial Reporting Unit:
Matt Clarkson, CPA

Steven Hawkins, CGFM

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