FEDERALLY FUNDED AGENCIES
Defined
Benefit Plan Employees
States
have been advised that OMB has drafted a change in the regulations that may
alleviate this issue. The language and the expected date of issuance is
unknown. For now we are just waiting.
Defined
Contribution (Pathfinder) Plan Employees
Agencies
should not be charging federal programs for amounts remitted to the OPERS
Defined Benefit plan for employees who are on the Pathfinder plan. The
expenditure code for the non-allowable portion is 513300.
OMES will
be arranging a meeting of CFOs from federally funded agencies and other
involved parties to discuss the issues.
PAYROLL
The 2017 Tax Cuts and Jobs Act suspends the tax free
exclusion of qualified moving expenses paid to or on behalf of an employee by
an employer. The suspension period is for tax years beginning January 1, 2018
through December 31, 2025.
Authorized
moving expenses paid, directly or indirectly, to or for an employee will be
taxable as wages and must be processed through the payroll system. This
includes payments made with the P-card and those processed through accounts
payable.
If paying the
employee directly (through accounts payable) or a third party for moving
expenses, the agency must notify its payroll department of the amount paid. The
amount must process through the payroll system as non-paying, taxable earnings
so that the amount will be taxed and properly reported on the employee’s W-2. We
recommend the amount be processed through payroll on the employee’s next
paycheck. Delaying until the end of the year could cause a hardship for the
employee by taking the taxes out during the holidays. Delaying could also cause
issues with collecting the employee taxes if the employee has terminated
employment.
For any
amounts paid directly to the employee, through the payroll system, taxes will
be withheld from the gross amount and the employee will receive the net
payment.
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As a reminder to agencies, certain types of
earnings are eligible for deferral to SoonerSave while others are not
considered eligible compensation.
Annual leave payout is generally eligible for
SoonerSave deferral on termination of employment. However, payments on
severance from employment do not qualify as compensation for SoonerSave
deferrals. Therefore, payments under voluntary buyouts (VOBO) and
reductions in force (RIF) would be excluded from deferral consideration.
SoonerSave deferrals may only be taken on compensation from an agency for services performed, including regular pay,
overtime, shift differential and other similar payments. If an amount would have been paid had the employment
continued, (such as annual leave) then deferrals may be taken.
Please advise employees that changes in deferral
amounts must be submitted to the SoonerSave administrator and approved before
processing through payroll. For additional information, agency personnel
should contact their SoonerSave coordinator or the SoonerSave administrative
office at 1-800-733-9008 or 405-858-6781.
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Agencies must complete Form DER, Deceased Employee Reporting when
an employee dies and payments are made after the date of death. The form is on
the OMES website under CAR Forms.
Complete all forms and send to OMES/CAR payroll, attention Jean Hayes as soon
as possible after all payments have been processed.
Procedures for processing payroll after the death of an employee are available in the HCM how-to document titled "Payroll
Processing for Death of an Employee".
NOTE: Remember to update the date of death on the HR Personal Data
Record, update Job Data for a termination with the reason code ‘SO4’
(deceased), and terminate the employee’s direct deposit. Banks will return
direct deposits for deceased customers. A return of an item will cause a
delay to the individual receiving the payment.
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40 O.S. § 165.3a, allows employers to provide employees the option
of designating a beneficiary for wages and benefits payable upon an employee’s
death. There is no requirement for an employer to allow employees to
select beneficiaries, but agencies may want to consider adopting such a policy. Providing the option to
employees would relieve stress and anxiety after the death of the employee on
the family members. Also, agencies would have clear guidance on who
is to receive final wage payments and avoid any potential difficulties in
determining who should receive the payment(s).
This statute does not include any longevity payment that may be
due as of the date of death of an employee. 74 O.S. § 840-2.18, subsection
H.2, authorizes any longevity payment to be paid to the decendant’s surviving
spouse, or if there is no surviving spouse, to the decedent’s estate.
For more information or sample forms and instructions, please
contact Jean Hayes at 405-522-6300, jean.hayes@omes.ok.gov or Lisa
Raihl at 405-521-3258, lisa.raihl@omes.ok.gov.
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When an employee reimburses a payroll overpayment, please complete
and submit the OMES Form 94P as soon as the reimbursement is made. The
form should not be submitted until the full amount has been paid back to the
agency. Timely submission helps ensure corrections are reflected in the quarter
in which they occurred for proper reporting and also helps in the full recovery
of OPERS retirement amounts. If the retirement system is not aware of an
overpayment and the pending overpayment refund request, payouts to former
employees may be incorrect, resulting in a loss to the agency. In addition,
retirement calculations may be incorrect if the overpayment is not reported
timely.
Please do not provide copies of personal checks. The form
allows the agency to enter the amount reimbursed. Additional back up data
is not required.
The form requires the State EmplID be entered. This has been
changed for the privacy and security of the employee. Please do not submit with
the social security number or any other number.
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1099 INFORMATION
The first quarter of the 2018 tax year is now complete, and
it is time for State Agencies to run
their Miscellaneous 1099 Tax Information Report which should include all
transactions from January 1, 2018 through March 31, 2018. The path for this report in PeopleSoft
Financials is: Accounts Payable,
Reports, Payments, Misc Tax Information Report.
With this report please review the following:
-
1099
FLAGS: Please pay attention to the
1099 Flag where Y means Yes, the vendor should receive a 1099 and N means No,
the vendor should not receive a 1099. A
1099 will not be printed if the 1099 Flag is N.
A vendor does not need a 1099 if they are registered as a corporation,
non-profit organization or government entity, (the exception to this is if the
payment is for a legal or medical payment and they will receive a 1099).
-
NAME
& TIN: Make sure that the Name
and Tax ID number (TIN) match the information on the vendor’s W-9. An additional name may need to be added so
that it will match with the IRS. Only the
Supplier Name prints on this report, but if you have an Additional Name it will
be added in the vendor file and will print on the 1099.
-
ADDRESS: The designated address for 1099 reporting is
Address 1 in the vendor file. If the
1099 Flag is N, then new addresses will be added but Address 1 will not
change. Otherwise, if Address 1 is not
the address that should be on the 1099 please have the vendor submit a
Vendor/Payee Form or W-9 requesting that the 1099 address be changed.
-
TOTALS: Review all warrants processed with 1099
reportable account codes for each vendor and make sure all are accounted
for. (Any warrant corrections need to be
made at the agency level.)
Your corrections to this report should be sent to the OMES by April 30, 2018. You may send your corrections to the email
address listed below or you may print the report, write in the corrections and
send it in via interagency mail. If you
have questions, please contact Beth Brox at 405-522-1099, or by email at
Beth.Brox@omes.ok.gov.
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ACCOUNTING
OMES/CAR centrally pays Oklahoma child support for all state
agencies on the Oracle/PeopleSoft HCM system. The timing of this process may
result in a balance in the 994 class funding at the end of a month.
CAR runs the process to report and make payment to the
OCSS/Oklahoma Centralized Support Registry, PS vendor ID 0000190715, every
Monday. The process is run for payments with dates from the second
previous Saturday through the previous Friday. For example; paychecks with an
issue date between 3/24/2018 – 3/30/2018 were processed to pay child support
withholdings on 4/2/2018.
In PeopleSoft Financials, a journal entry is created to remove the
funds from the agency’s 994 fund. Journal entries created by CAR will be
Allocation Journals (ALO) and begin with ‘000’. The agency will see a debit to
the 633190 account and a credit to 101000. The timing of these payments may
affect an agency’s reconciliation to the Summary of Receipts and Disbursements
(SRD) ending cash balance as well as the available cash shown on the Allotment Budget and Available Cash
(ABC) report. Agencies may have amounts withheld in one month
that are not paid until the next month. Please keep this in mind when
reconciling with the SRD and ABC reports. Agencies can run the following
queries to assist with the reconciliation:
- Query
OCP_PR_WH_ACCT_BAL_DETAIL
- Query
OCP_PR_WH_ACCT_DETL_BY_PERIOD
Agency payroll personnel must notify CAR of any items that will
affect the amount to be paid. Items that could affect the amount to be
paid include refunds to employees for amounts withheld in error and reversals
of payroll warrants. If CAR is not notified and payment is processed, the
agency’s 994 fund will be out of balance. The agency will be responsible for
contacting the Department of Human Services child support division and
attempting to get a refund. If the funds have already been disbursed to
the recipient, the money might not be refunded back to the agency. Timely
communication from the agencies is critical in these situations.
For 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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Due to issues that have recently come to light involving the
Oklahoma State Department of Health, the auditors have informed us that there
are now additional federal programs that must be audited as part of the 2017
State of Oklahoma Single Audit. Because of this additional audit work,
the audit will not be completed by the deadline. Auditors anticipate
issuing this audit on or before June 30, 2018. Federal agencies have been notified.
If agencies would like to have a copy of the notification that was sent to federal agencies to provide to your specific contacts, please request by e-mailing Stephanie Brown at stephanie.brown@omes.ok.gov.
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BUDGET
The Hyperion system is still offline. Agencies will
use the same spreadsheet process to submit their FY19 budget work programs
(BWP) as was used for their FY18 budgets. The OMES budget division will
provide FY19 BWP instructions to agencies once the 2018 legislative session has
concluded. Please contact your OMES budget analyst if you have questions.
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Please remember that the statutory deadline for agency
strategic plans is October 1st. These plans are due every even
numbered year on October 1st. As you are preparing your plans,
please feel free to reference the state’s strategic plan at http://okstatestat.ok.gov/
If you have questions or need guidance, please reach out to
your OMES budget analyst.
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FINANCIAL REPORTING UNIT
In June 2017, the GASB released Statement number 87 (GASB
87) entitled Leases. While the title is short, the effort
required to implement this new standard will be long and arduous.
Currently, financial reporting standards require that all
new leases be evaluated to determine if they should be classified as “capital”
or “operating.” For agencies that have material lease expenses, the evaluation
is done in the preparation of GAAP Package L. Leases that fit the definition of
operating are simply expensed, as is already done in Peoplesoft. Leases that
fall under the category of capital leases, though, require far more diligence
in tracking since they must be capitalized and depreciated over the life of the
lease agreement.
Under the guidelines of GASB 87, the concept of an operating
lease has essentially ended. Only short-term leases, and short-term leases are
very narrowly defined as leases that are no more than a year and non-renewable,
can simply be expensed. Considering that currently the vast majority of leases
reported by the State of Oklahoma are classified as operating, this will likely
take a significant effort to make the necessary adjustments.
GASB 87 will not take effect until
Fiscal Year 2021. This means there is plenty of time to get the data together.
That said, the new standards will require retroactive implementation, so it is
recommended that every agency begin a project to identify all existing leases
and determine their capital values. The OMES Financial Reporting Unit will
begin gathering this data in advance of the implementation period due to the
need to restate prior periods.
As always, your Financial Reporting Analyst at OMES is available
to assist you with any questions related to GAAP reporting.
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During the audit of the Schedule of Federal Awards (SEFA),
the State Auditor’s Office asked that we remind all agencies that receive
federal awards: when federal funds are transferred between two state agencies,
it is important that the agency receiving the funds be notified that the funds
are from a federal grant. The distributing agency should always inform the
receiving agency of the CFDA number for the program from which the funds were
provided. This will reduce errors made in the preparation of the transfer
section of the Package Z.
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AGENCY NEWS
O.S.
§ 62 Section 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 (OST) for FY2018 will
expire June 30, 2018.
State
agencies can obtain the FY2019 Request for Exemption at https://www.ok.gov/treasurer/Banking/Electronic_Payment_Requirement/index.html
beginning Tuesday, April 10. State
agencies must complete and submit the FY 2019 Request electronically via email
to OST at Electronic.Payment.Exemption@treasurer.ok.gov. Only requests submitted using this document
and to the web address noted below will be considered. Agencies
should submit their Request by May 15, 2018, 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 Kiran Nallayahgari, Banking and
Treasury Services Director at Kiranmaye.Nallayahgari@treasurer.ok.gov.
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