TOP STORY
Pursuant to GASB 75, a liability for "other post-employment
benefits" must be booked on the participating employer’s financial
statements for the year ended June 30, 2018.
OPEB includes the subsidy that retirees receive ($105) towards their
health insurance premium. That OPEB is
calculated through the pension systems.
The GASB 75 report available on OPERS’ website includes the information
necessary for the footnote in total for the state and a listing of agencies
with each agency’s percentage of the total.
Another aspect of OPEB pertains to the statutory requirement
that health insurance premiums through EGID be the same for active employees
and pre-Medicare retirees. If these
retirees were rated separately the premium would be higher. The difference is known as an implicit rate subsidy. EGID’s actuaries have calculated the OPEB
liability attributable to the implicit rate subsidy for the state’s CAFR. Agencies that prepare individual GAAP financial statements may use this
calculation to report the agency’s OPEB liability from the implicit rate
subsidy by applying the percentage attributable to the agency to the
information reported for the state as a whole.
Only agencies (or component units) who participate in the
group insurance offered by EGID and whose
payroll goes through the state system will be included in this
calculation. Other component units or
entities that produce GAAP financials are responsible for their own OPEB
calculation for the implicit rate subsidy.
To request a copy of the actuarial valuation for OPEB
related to the implicit rate subsidy and the allocation by agency, contact Matt
Clarkson at matt.clarkson@omes.ok.gov.
>> Back to Top
BUDGET
Some agencies have questioned why
certain benefit allowances have changed while others remain at the current
level. Premium rates for different tiers
(i.e. member, spouse, 1 child, and 2 or more children) do not increase at the
same rate every year, so some tiers will surpass the frozen 2012 levels in
different years. Since the average
spouse premium for Plan Year 2012 remains higher than the HealthChoice spouse
rate, the benefit allowances with the spouse have not changed.
The benefit allowance for budget
purposes was based upon an assumption of a 5 percent increase of the
current HealthChoice High Option premium.
The actual premium increase and
benefit allowance will not be known until Aug. 17, 2018. For appropriated agencies, the
legislature included the projected
increase for each agency into their appropriation based upon the current
elections of their employees.
The benefit allowance consists of 4
components: The health premium (the
greater of the Plan Year 2012 average or the HealthChoice High Option), the
average dental premium, the disability premium and the basic life premium. According
to 74-1370 Section C, the benefit allowance shall not be LESS THAN the Plan
Year 2012 benefit allowance. This
article will give a few examples of the benefit allowance calculations and why
certain ones did not change.
For the member-only benefit
allowance, the amount projected for Calendar Year 2019 is in accordance with
74-1340 C.1. The current HealthChoice
High Option premium is $594.90. A projected
5 percent premium increase would be $624.66.
 If a member has dependents, the benefit allowance is the members benefit allowance PLUS:
- for a spouse, 75 percent of the HealthChoice High Option plan, available for coverage of a spouse,
- for one child, 75 percent of the HealthChoice High Option plan, for coverage of one child,
- for two or more children, 75 percent of the HealthChoice High Option plan, for coverage of two or more children,
- for a spouse and one child, 75 percent of the HealthChoice High Option plan, for coverage of a spouse and one child, or
- for a spouse and two or more children, 75 percent of the HealthChoice High Option plan, for coverage of a spouse and two or more children.
For the member with one child benefit allowance, the amount projected below for Calendar Year 2019 is in accordance with 74-1340 C.2. The current HealthChoice High Option premium for One Child is $229.24. A projected 5 percent premium increase would be $314.20.
For the member with a spouse and two or more children benefit allowance, the amount projected below for Calendar Year 2019 is in accordance with 74-1340 C.2. The current HealthChoice High Option premium for a spouse is $697.50. A projected 5 percent premium increase would be $732.38. The current HealthChoice High Option premium for Two or More Children is $507.80. A projected 5 percent premium increase would be $533.18.
OMES has permanently discontinued use of Hyperion for the budgeting process. The security forms will be taken offline – 301EPLAN and 301UPK. As always, if you have questions about this or the new spreadsheet processes implemented in place of Hyperion, contact your OMES budget analyst.
>> Back to Top
ACCOUNTING
When an agency is authorized to have an ASA or 700 class
funding, the account must be strictly used for the authorized purpose. Authorization to have one of these accounts does
not exempt the agency from any other requirements for which the agency does not
have a specific exemption, for example, the Central Purchasing Act and
encumbrance requirements. The structure
and process for these accounts does not allow OMES to review or query to
determine whether purchasing procedures were properly followed. However, if issues are found upon an audit
the fact that the transaction was made through an ASA or 700 fund is not a
defense.
>> Back to Top
In October 2017 there was an article in the CAR
newsletter regarding notices that agencies had begun getting from the System of
Award Management. Because there is
still confusion about the Taxpayer Offset Program, we felt that
additional information needed to be distributed.
The Taxpayer Offset Program reviews payments to be made by
the federal government for either grant draws or vendor payments to see if the
payee has an outstanding debt to the federal government. Because the TOP uses the state’s federal
employment number (FEI), which for the State of Oklahoma covers all state
agencies, the offsets for debt may reduce payments to a different agency than
the one that owes the debt.
There are several notifications, which if addressed
properly, can relieve some of the issues related to TOP. These notices are detailed below:
-
Notice of debt – This is a notice that is sent
to the delinquent debtor by the federal agency that is owed. It will go to the last known address of the
agency prior to the debt being turned over to TOP. This is the first opportunity to pay or
negotiate with the federal agency that is notifying the debtor.
-
U.S. Department of the Treasury Notice of Debt –
This notice is sent to the address of the debtor when a collection item is
turned over to TOP. The agency has an
opportunity to make the payment to the Department of Treasury prior to offsets.
-
SAM Notification of Debt Subject to Offset –
This notice is sent to agencies with DUNS numbers registered with the state’s
FEI when debt has either been put into the TOP system, or has been cleared from
the TOP system. This debt may not be
related to the agency receiving the notice.
-
TOP Offset Notice – This communication from the
Department of the Treasury will indicate that an offset has happened and will
show the amount of the original payment to be made and the amount that was
offset. This notice has important information
that will help OMES determine whose payment was offset and which agency had the debt.
If an agency receives either a Notice of Debt or an Offset Notice from the Department of
Treasury, please forward
copies of the notices to CAR. OMES
receives reports from TOP which may match up to those notices and assist us in
resolving offset issues.
Some states participate in a reciprocal TOP program where
the state may offset its payments to vendors for federal debt. With those agreements, the Federal TOP will
also offset federal payments for debts owed to the reciprocating state.
PAYROLL
The schedule for running the FY Combo Code Conversion
process is:
- Evenings of June 29 and June
30, 2018 – Department of Human Services. This process must be run prior to
running the July 13, 2018, payroll.
-
Evening of June 29 and June 30,
2018 – All state agencies having bi-weekly payrolls. This process must be
run prior to running ‘B01’ or ‘C01’ payrolls which pay on July 20, 2018.
NOTE: This date includes agencies that run both monthly and
bi-weekly payrolls. All supplemental and off-cycle payrolls must be
completed and processed to GL by 3 p.m. on July 05, 2018. The EBS payroll team
will monitor agencies to help ensure payrolls are completed before the
conversion begins.
- Evenings of July 10 and 11,
2018 – All monthly anticipatory agencies. Do not begin processing M01
until July 16, 2018.
NOTE: As
soon as all on- and off-cycle payroll processes are completed for the June pay
period, please notify Enterprise Business Services by creating a service desk
case asking for the case to be assigned to the IS-HCM payroll group. This
will enable the EBS team to try and schedule the agency’s FY Combo Code
Conversion Process earlier. Questions may be directed to Carol
Barton at 405-522-4371 or carol.barton@omes.ok.gov.
>> Back to Top
Processing of the statutory pay raises included in HB 1024
will begin June 30 and should be completed by July 1. Agencies will need to
refrain from entering any information in the job record that is dated July 1,
2018, or forward until after the pay raises have been added. The processing of
the pay raises will begin with the Department of Human Services, then agencies
with bi-weekly payrolls and conclude with the monthly payroll agencies. For
questions related to the pay raise processing, please create a service desk
case asking for the case to be assigned to the IS-HCM payroll group.
>> Back to Top
The rate certified for the administrative
cost which will be calculated in payrolls submitted for the fiscal year
beginning July 1, 2018, has changed to $2.13 per month for any qualified
participant. The equivalent amount for a bi-weekly pay period is $0.98. This
change will be reflected in any payrolls submitted with a pay period code of
M01 or B01.
>> Back to Top
The rate certified for the
administrative cost which will be calculated in payrolls submitted for the
fiscal year beginning July 1, 2018, has changed to $1.13 per month for any
qualified participant. The equivalent amount for a bi-weekly pay period is $0.52.
This change will be reflected in any payrolls submitted with a pay period code
of M01 or B01.
>> Back to Top
The amount the State of
Oklahoma pays for employee retirement will remain at 16.5% for FY 2019.
>> Back to Top
The employer contribution
rate for the Uniform Retirement System for Justices and Judges will increase
effective July 1, 2018, from 20.5 percent to 22.0 percent beginning with any payrolls
submitted with a pay period code on M01 or B01.
>> Back to Top
The amount the State of
Oklahoma pays for employee retirement will remain at 11.0 percent for FY 2019.
>> Back to Top
The Federal matching
contribution rate for the Teachers Retirement System will decrease effective
July 1, 2018, from 7.80 percent to 7.70 percent beginning with any payrolls submitted with a
pay period code on M01 or B01. The federal matching contribution rate
must be paid when salaries are paid by federal funds or externally sponsored
agreements such as grants, contracts and cooperative agreements. Other TRS
contribution rates remain the same for FY 2019. For a complete list of
rates, please see the TRS website.
>> Back to Top
Please distribute the FY-2019
Pay Date schedules found at ScheduleOfFY19PayPeriods
to Payroll and Human Resource
directors. Questions on the codes may be directed to Lisa Raihl at
405-521-3258, lisa.raihl@omes.ok.gov
or Jean Hayes at 405-522-6300, jean.hayes@omes.ok.gov.
>> Back to Top
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, lisa.raihl@omes.ok.gov or Jean Hayes at
405-522-6300, jean.hayes@omes.ok.gov.
>> Back to Top
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
includible 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 Title 72 O.S. §48
and OAC 260:25-15-44,
for additional information related to leave of absence due to military service.
>> Back to Top
When earnings are payable
after the death of an employee, the Payroll
Processing for Death of an Employee manual must be followed to ensure
proper processing. For payments to a spouse,
dependents, guardians or beneficiaries of a deceased employee that are made
through AP, the recipient(s) must be set up in the vendor file. Processing Step
1 in the manual states the agency can request a Vendor ID using the ‘Vendor
File Additions/Changes for Employees/Board Members’ form. This form has been
modified and is no longer valid for this type of vendor setup. Please submit a
completed IRS Form W-9
to Vendor Maintenance for payments to be made to a spouse, dependents,
guardians, or beneficiaries of a deceased employee. Requests to add or update
an employee Vendor ID made payable to the “Estate of …” an employee, may
continue to be submitted using the Form Adding Employees CORE Vendor Database. All forms should be submitted to Vendor Maintenance via
email to vendor.form@omes.ok.gov.
Forms may also be faxed to the updated number 405-521-3663 Attn: Vendor File
Maintenance.
>> Back to Top
Beginning in 2012,
the IRS mandated
Box 12 reporting
for 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 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.
>> Back to Top
HIGHER EDUCATION PAYROLL
Payroll
claims for hours worked in fiscal years 2018 and 2019 on one payroll fund
transfer file will record payroll expenses to the institution’s operating
funds with bud refs 18 and 19. The claim number will begin with 19, which will
require that all class 78900 transactions on the PFT file be recorded with bud
ref 19. The first two digits of the claim number determine which 78900 budget
is used for the net payroll vouchers, so all 78900 transactions on the PFT must
be recorded with bud ref 19 to ensure the same allotment budget is used.
Please
ensure the FY 2019 78900 allotment budget is sufficient for the FY 2018
expenses paid in July and August 2019.
If
a payroll contains only FY18 expenses, then the claim number will be 18aaaxxxxx and
the PFT bud ref will be 18.
If
a payroll has FY18 and 19 expenses, then the claim number will be 19aaaxxxxx
and the PFT bud refs for the operating funds (290, 430, 700) will be as
applicable and the 789 bud ref must be 19.
If
a payroll contains only FY19 expenses, then the claim number will be 19aaaxxxxx and
the PFT bud ref will be 19.
>> Back to Top
HUMAN CAPITAL MANAGEMENT (HCM)
Effective July 1, 2018, Globe
Life and Accident Insurance Company and Family Heritage Life Insurance
Company will no longer be members of the Voluntary Payroll Deduction
program for the State of Oklahoma.
Employees should make alternative arrangements before ending
deductions through the payroll system for the State of Oklahoma. The individual
companies will be responsible for notifying policyholders about other methods
for paying premiums going forward after July 1, 2018. If you would like to
contact your representatives with these companies, they are as follows:
Globe Life and Accident Insurance Company
Payroll Code: AI65
Kathie Jenkins
Email: kjenkins@torchmarkcorp.com
Phone: 972-569-3278
Family Heritage Life Insurance Company
Payroll Code: AI66
Tray Warrior
Email: twarrior77@gmail.com
Phone: 918-617-3401
If you have questions about the VPD program,
please contact us at vpd@omes.ok.gov or 405-522-6970.
*These companies are
supplemental plans and do not affect the Life Insurance or Dependent Life
Insurance that is part of your yearly benefits enrollment.
>> Back to Top
TRAVEL
Effective
immediately all lodging receipts (original or copy) must be included with any
Form 19 travel voucher that pertains to overnight travel, even if the lodging
was an agency direct payment or paid with p-card. Lodging payments are limited to the allowed
rates. If the lodging cost is greater
than the amount allowed, the traveler should make the payment and be reimbursed
only for the allowed amount. The agency
should not make payments over the allowed amount, but if this happens the
employee’s reimbursement for other travel costs must be decreased by the
overpayment. Overnight travel claims received without
documentation of the cost of lodging will be rejected until the agency provides
the documentation and adjusts the voucher as appropriate.
>> Back to Top
ACCOUNTS PAYABLE
Central
Purchasing’s Ratification Agreement
and the Budgetary Agreement of Prior
Year Obligation processes are often confused. These documents are each required in certain
circumstances and if both situations exist, both documents are required.
The
Ratification Agreement is strictly a purchasing document to be
used when an agency fails to encumber funds for an expenditure by setting up a
purchase order. The agency must complete
a ratification form and submit a copy to the state purchasing director for
his/her records (not approval). A copy of the ratification agreement must be
attached to the voucher and it is paid unencumbered.
The
Agreement of Prior Year Obligation process is strictly a budgetary
issue for an expenditure that must be paid against a prior year where there is
no remaining budget because it was either used or lapsed. Agencies must complete an Agreement of Prior
Year Obligation form and submit it to their OMES budget analyst. The expenditure must be approved by the state
budget director. If approved, the
expense is considered a current year obligation and current year budget would
be used to make the payment. The payment is made unencumbered. A copy of the approved Agreement of Prior
Year Obligation form must be included with the voucher.
If
there are any questions on these “settlement” type processes, please send an email
to OMESTPAccountsPayable@omes.ok.gov.
>> Back to Top
A
reminder that there are no exceptions to the “Tax Snags” often levied on
vendors used by state agencies. When a vendor is snagged by the Oklahoma Tax
Commission via a tax warrant, agencies can’t enter into new contracts
with the vendor and any payments to the vendor are held for the vendor to work
out arrangements with the OTC. Any scheduled payments to the vendor may be subject
to assignment to the OTC if an agreements is not made between the taxpayer and
the OTC. This also applies to employees’ travel and other reimbursements when
there are tax snags on the employees (payroll excluded).
For
additional detail on these procedures, see the OMES Statewide Accounting
Manual, Chapter 50.90.04 OTC Tax Warrant Program (Vendor Snag Program), or send
an email to OMESTPAccountsPayable@omes.ok.gov.
>> Back to Top
|
