Top Story
 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.
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PAYROLL
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 lisa.raihl@omes.ok.gov, or Jean
Hayes at 405-522-6300 or jean.hayes@omes.ok.gov.
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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, lisa.raihl@omes.ok.gov or Jean
Hayes at 405-522-6300, jean.hayes@omes.ok.gov.
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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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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, lisa.raihl@omes.ok.gov or Jean
Hayes at 405-522-6300, jean.hayes@omes.ok.gov.
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HIGHER EDUCATION PAYROLL PROCESSING AND REPORTING
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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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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MISCELLANEOUS
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 humanresources@omes.ok.gov.
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ACCOUNTING
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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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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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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FINANCIAL REPORTING
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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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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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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AGENCY NEWS
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 Diedra.Oneil@treasurer.ok.gov or 405-522-4256 for additional information.
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