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Deadline Reminder for Component Units
Just a reminder that the deadline for submission of financial statements and audit reports is Oct. 31st. Please make sure your auditors are aware of your deadline and complete their work in plenty of time.
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PAYROLL
OMES receives a daily report with banking changes and return items for employees on direct deposit. A file is then created to load the changes into the HCM system. The process has recently been modified to deactivate direct deposit records for employees that do not get updated with those banking changes and to also deactivate direct deposit records for those employees with returned direct deposits. Agencies will continue to receive the OCP0229A Updated Banking Information. The report will now show all items, updated or deactivated, along with the change or return code and if deactivated, the description. Agencies will need to get updated banking information from the employee and enter into the HCM system before processing the next payroll.
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Agencies will continue to receive the report which is generated from the Office of the State Treasurer’s (OST) current ACH application. OST’s current ACH application automatically updates bank routing numbers based on the latest table of Federal Reserve Bank routing numbers. This update allows the items to continue processing for payment. When an update is made, a report is generated listing the employee, the incorrect bank routing number, and the correct bank routing number. This report is distributed to agencies to update employee banking information. This report is sent out by OMES to the contact listed for the Updated Banking Information report that is currently distributed. These updates must be made now so these transactions will continue to process without interruption after migration to the new application.
If banking information is not updated before OST goes live with the new application, items with invalid routing numbers will be rejected and not processed to pay. The new application will validate the submitted information against the latest Federal Reserve Bank routing numbers table and will reject the transaction if the bank routing number is determined to be invalid. If an item is rejected, it will not leave OST to be paid and additional processing by the agency will be required to pay the employee(s). Again, it is imperative that these updates be made now so transactions will continue to process without interruption after migration to the new application.
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In planning your work for October, it is important to remember that Columbus Day is Mon., Oct. 14. Although not a state holiday, Columbus Day is a federal/bank holiday. As a reminder, all payroll documents must be received five business (5) days prior to the actual pay date to ensure adequate time for audit and processing. Adherence to this policy will ensure payrolls are processed to pay timely.
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Authorized payments of employee moving expenses under Title 74 O.S., Sec. 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 nonqualified 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 excludible 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.
Nonqualified 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 nonqualified 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, 2300 N. Lincoln Blvd., Room 122, Oklahoma City, OK 73105-4801, 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. Section 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 2013; $146,400) 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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Giving gifts to employees is restricted and should only be given as part of a formal employee recognition program. See Oklahoma Statutes, Title 74, Sections 4121 and 4122. Furthermore, any gift cards, certificates, and coupons given to employees are to be included in the employee’s taxable income.
These items are considered by the Internal Revenue Service to be cash or a cash equivalent and do not meet the requirements to be excludable as a de minimis fringe benefit.
Even when an employer provides gift cards, certificates, or coupons to purchase a turkey, ham, or other nominal value property, these are considered wages and are subject to income and employment taxes. This is true even when the card restricts the items purchased, the time to use the coupon, and any unused portion is forfeited. Cash equivalents do not meet the de minimis fringe benefit requirements.
Process the taxable amount through payroll using the gift card amount using the TRC Code of “GIFT,” which will show as earnings code “GFT.” The amount will be included as taxable income and will be taxed on the paycheck.
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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 Title 62, O.S., Section 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 the OMES. (Title 62, O.S., Section 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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Employee deferrals and employer contributions must be remitted to OPERS in a timely manner to ensure participant amounts are posted and transferred to the selected investment options within 10 business days of the payday, end of payroll period, or process date, whichever is later.
OMES processes payments for SoonerSave amounts on confirmed payrolls on a weekly basis. This payment schedule far exceeds the requirements set forth in the plan and IRS rules. On many occasions contributions are posted to employee accounts on or before the actual pay date. Occasionally, and due to the payroll processing schedule of agencies, payments may post after the actual pay date.
Please remind employees that payments not showing on a quarterly statement may be due to the later processing of payroll and will show in the next quarterly statement. Employees are also encouraged to use the SoonerSave website to review and receive up to date information on their account. The following link for SoonerSave can be found at http://www.opers.ok.gov/soonersave/ or you may go directly to the SoonerSave website.
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ACCOUNTING
The GSA Standard Lodging rate under the CONUS per diem table is increasing effective Oct. 1, 2013. The new rate increases from $77 to $83 for lodging, but the meals and incidental expenses (our per diem) remains at $46.
The two locations in Oklahoma exceeding the standard rate also have increases in lodging. The new lodging rate for Enid/Garfield County increases from $103 to $106, and the rate for Oklahoma City/Oklahoma County increases from $81 to $87. There were no changes to the meals and incidental expenses (our per diem) rates. Standard CONUS rate applies to all counties not specifically listed. Cities not listed may be located in a listed county.
These new lodging rates will be for travel occurring on and after Oct. 1, 2013. The new rates may also be viewed on the GSA website after Oct. 1, 2013.
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We are rescinding part of the recently released procedures from the latest DCAR Newsletter, Vol. 24, Number 2, dated Aug. 20, 2013. Some of you expressed concerns about our procedures requiring original payroll documents and we have decided that faxes of payroll documents will be accepted. The original documents are still preferred, although legible faxes will be allowed in lieu of the originals. If faxes are used, the follow-up of the original documents will not be necessary. The payroll document faxes should be transmitted to (405) 521-3383. The agency must verify the transmission was successful by the confirmation on the agency’s fax machine. Note: If emails are submitted in lieu of faxes, the contact staff for payroll is Elsa elsa.kunnel@omes.ok.gov and Brandi brandi.abou-rakaban@omes.ok.gov. If originals are used, send to the State Capitol attention: Transaction Processing, 2300 N Lincoln Blvd, Room 107, Oklahoma City, OK 73105-4801.
Also, with the current procedure of using a faxed PWC form to start the cancellation process, we will no longer require the follow-up submission of the original PWC form.
Please remember that the five (5) business days deadline prior to the actual pay date remains in effect as does the 3 p.m. daily cutoff for processing payrolls to release the direct deposit and warrant file to the OST.
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In connection with the implementation of its new systems, the Office of the Oklahoma State Treasurer (OST) will soon begin sending out forms for the designation of Agency Security Representatives. The form designating Agency Security Representatives for OST systems must be approved by the Agency Director. Agency Security Representatives will be responsible for:
- communicating the appropriate procedures, guidelines and best practices associated with the use of OST systems to agency users,
- granting , on behalf of their agency, user access to OST system functions, and
- reporting all deviations to procedures, guidelines and best practices.
OST will provide the following in connection with security administration for OST systems:
- confirmation of the setup of the Agency Security Representatives with the Agency Director and the individual concerned via email when the setup is complete,
- confirmation of the setup of user access with the Agency Security Representatives and the individual user concerned via email when the setup is complete,
- daily confirmation of terminations submitted pursuant to procedures that will be provided by OST to Agency Security Representatives, and
- weekly confirmation of all other agency access changes to Agency Security Representatives.
The form will also be posted on the OST website.
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Please review the Claim Jackets, OSF Form 15A, before payments are made to ensure vendor payments will be made to the correct vendor, especially since the number of EFT payments are increasing and the State Treasurer’s Office will not process a reversal on an ACH/EFT item that is more than five business days past the effective date pursuant to the National ACH Association Operating Rules. The Form 15A includes the following information to help agencies determine if the correct vendor is paid:
- The primary vendor name on the voucher prints next to the ‘Claim of’ field.
- The ‘Alternate Name’ prints under the primary vendor name if an ‘Alternate Name’ is associated with a vendor address in the vendor file. An “Alternate Name’ overrides the primary vendor name on the warrant, but viewing a vendor ‘Alternate Name’ in the vendor file and voucher requires clicking additional icons, so payers may not recognize that an ‘Alternate Name’ will print on the warrant while processing a voucher.
- The ‘Assignment Section’ under the primary vendor name and ‘Alternate Name’ will print the vendor name, address, vendor ID, and location if the ‘Remit To’ vendor is differs from the primary vendor on the voucher.
- An ‘Alternate Payee Address’ prints in the lower right hand side of the Form 15A if the ‘Remit To’ Location and/or Address differs from the primary vendor’s location and address.
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Payments made to the Department of Labor should be made using the interagency method. The department requests that for payments made for hot water heater, boiler, and elevator inspections, the location noted on the report, the city, and the inspection done (HWH, boiler, elevator) be included in the message field on the voucher. For agencies that transmit, please include the message in columns 301 – 378 on the Payee Record layout.
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Manual warrants transmitted using the EDT process that were cancelled by request subsequent to Nov. 26, 2012, were not reporting on the Warrant Cancellation Register report (Accounts Payable>Reports>Payments>Warrant Cancellation Report) until the problem was researched and corrections were made to these records on Sept. 4, 2013. EDT agencies with 7XX manual warrants that may have been cancelled by request should rerun the report to include the cancellations occurring between Nov. 26, 2012, and Sept. 4, 2013.
EDT manual warrants transmitted prior to Aug. 30, 2013, that will be cancelled by request after Sept. 4, 2013, will also not report in the Warrant Cancellation report. These records will be corrected in Dec. 2014, after the 90-day statutory cancellation period has run.
Questions regarding this report can be directed to patricia.garcia@omes.ok.gov.
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OCP_AP_UNPAID_VOUCHERS, which replaces OCP_VCHR_ DETAIL_NOT_PAID_REV is now available. It includes the invoice number and invoice date of unpaid vouchers as of specified date. The prompt specifies the date before the date entered since most agencies’ vouchers are not paid on the day they are entered. It is best to schedule this query to run between midnight and 6 a.m. to omit the stat cancelled 7XX warrants that may have cancelled during the day. All agencies should run the query periodically to ensure the vouchers are paid timely and an accounts payable liability is not recorded for transactions that should not be paid.
OCP_PCARD_VCHR_STG_VALIDATIO will also be made available by the end of the Sept. 2013 P-card billing for agencies to run and determine when the accounts payable staging tables have been loaded with the P-card transactions. It can be run after the P-card download due date.
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