Payroll User Group

March 21, 2018

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

WelcomeKevin McHugh Chief Payroll Officer

Spring Time in Boston

Metro’s Commitment

► Credit Union for State Employees!

► State Retirees - Once a Member, Always a Member!

► Financial education for State employees and their families

Mary Holland

Marsi Stoja

Credit Sense

Credit Sense

Credit Sense

Credit Sense

Credit Sense

Credit Sense

Credit Builder LoanThe money you borrow is secured in your savings account for the term of the loan.

Your loan payments are made to the Savings account. By making regularpayments on time, you improve yourcredit score. Once the loan is paidin full, the money in the savings is available to you!!

Free Lunch and Learns

Scholarships for High School Seniors

Metrocu.org/state

State Specials

Mary Hollandmholland@metrocu.org877-MY-METRO x 3504

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SMART Plan Agenda

Presented by Rob Young, Manager Retirement Counseling

PEC Enrollment (online enroll) 2018 – New Contribution Limits Refund infoQuestions

PEC (Online) Enrollment

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2018 New Contribution Limits

The limit on elective deferrals has increased to $18,500.

The age 50 catch-up amount for participants aged 50 remains at $6,000.

The new limit for participants utilizing the Special Catch-up program is $37,000.

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Refund Procedure

Submit excess contribution refund requests to Jane Waldron in the Cash Management Department of the State Treasurer’s Office.

Cash Management will forward corrections to Empower and provide authorization to process the refund.

Empower will process a withdrawal from the participant’s account and overnight a refund check to the Cash Management Department.

Cash Management will forward refund check to the agency and arrange for a correction to the participant’s payroll history via the Comptroller’s Office.

Top 5 Reasons for Refund Contribution Limit extended too far--

Adjustment amount in Savings Management

OBRA account with different Employer

Over age 70 ½

Sick/Vacation deferred without authorization (Catch-up worksheets)

More than 3 years in Special Catch-up

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Questions?

Thank you

Commuter Choice – Transit and Parking

Presented by Jasmine ShamerBenefit Strategies LLC

2403/21/2018

• For the 2018 tax plan year, the monthly pre-tax max limit for both the Mass Transit and Parking benefits has increased to $260, with Federal being $125 and State being $135

• Every employee that’s enrolled in the commuter Transit and/or Parking benefit receives a Monthly Balance Reminder email from Benefit Strategies – this is a quick prompt for members to login to their member portal and check their balance. Members can also download the Benefit Strategies mobile app for quick and easy access to their balance or they can go through our phone IVR system # 603-647-4666 which is available 24/7: option 2 for Customer Service - option 1 for Commuter Choice Plan – option 2 for Balance - enter your full Social Security Number followed by #

Transit and Parking Calendars To enroll in the commuter Transit or Parking benefit, members must complete the Online

Election Change Form here: https://www.benstrat.com/ctbform/index.php When making a Transit or Parking change through the Online Election Change Form – there

are links to the 2018 calendars as seen below on the form, please print them for quick and easy reference to important deadlines, or you can also find the calendars on the Benefit Strategies website here: https://www.benstrat.com/clientlink_ctb.php

2603/21/2018

Transit Election Change Process Calendar for 2018

The deadline to have submitted the April 2018 Transit Election Change Form to Benefit Strategies was 2/28/2018 and PR deduction was reflected on last Friday 3/09/2018 check

2703/21/2018

Parking Election Change Process Calendar 2018

The deadline to have submitted the April 2018 Parking Election Change Form to Benefit Strategies was last Wed 3/14/2018 and the PR deduction will be reflected on this coming Friday 3/23/2018 check

2803/21/2018

No Form, No Change!

Benefit Strategies cannot assume that members want or need their PR contributions to be changed (increased/decreased/stopped), therefore the Online Election Change Form must be completed with the correct amount in order for PR Coordinators to process those changes in the PR systems

Members cannot and should not print the Online Election Change Form and fill it out by hand – it must be submitted electronically through the Benefit Strategies website

Help us help your employees – if you receive the automated email notification from Benefit Strategies with the attached completed Online Election Change Form, and you realize that the listed employee does not belong to your agency – please alert your Account Executive Jasmine Shamer @ Benefit Strategies so she can inform the employee and request a corrected form be completed

Link to the Online Election Form https://www.benstrat.com/ctbform/index.php

2903/21/2018

Stats as of 3/16/2018

Extra funds that are not being used by your employees, there are 186 members with more than $500 in their commuter Transit or Parking account, in total $145,333.69:

03/21/2018 30

Over $500 Total # of EE's Division

$8,854.00 10 EHS0100

$6,092.00 7 EHS6000

$4,875.00 8 EOL1000

$2,984.00 5 EQE0427

$7,427.00 8 ITD0001

$2,893.00 5 MCA9999

$7,262.00 6 MRC9000

$5,531.00 7 SJC2000

$14,089.00 17 TRC

$2,092.50 3 TRE1400

$4,700.00 6 UMS0182 Boston

$2,445.00 3 VET1000

$2,777.00 3 WEL6000

Over $500 Total # of EE's Division

$3,217.00 6 AGO1000

$2,687.00 5 ANF1000

$3,042.00 2 BHC0001

$4,522.00 5 CPC1000

$2,419.00 1 DCP1000

$1,702.00 2 DCP3000

$4,084.00 5 DCR

$1,991.00 2 DMR1000

$9,255.00 14 DOT1000

$5,485.00 7 DPH0294

$5,084.00 7 DSS0993

$1,039.00 1 DYS1980

Contact Information for Benefit Strategies

Your dedicated Account Executive:Jasmine Shamer

HR/PR Coordinators: Jshamer@benstrat.comMembers: Info@benstrat.com

HR/PR Coordinators: (603) 232-8059 direct lineCustomer Service: 877-353-9442

Fax#: 603-647-4668Website: www.benstrat.com

3103/21/2018

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

HR/CMS 9.2Kevin McHugh Chief Payroll Officer

Upcoming Enhancements

3/22/2018 33

• Overtime requests– With Time and Labor, employees can enter overtime requests for future dates through a delivered on-line

page. Supervisors can view overtime requests, quickly check the amount of overtime that employees have worked to date, approve or deny requests, and enter any applicable comments.

– Once submitted, the approvals would be sent directly to employee’s supervisor. Supervisors can also select another secondary approval authority within their department.

– UAT testing including Accessibility testing is underway.– Planning to roll-out to all departments.

• Travel Reimbursements– Creating a Fluid travel reimbursement on-line form to track up to 8 separate reimbursements (i.e. mileage,

hotel, meals) within a single request. Employee can attach receipts to reduce paper.– Once submitted, the approvals would be sent directly to employee’s supervisor. Supervisors can also select

another secondary approval authority within their department. – Integrates with timesheet so that the system provides an end to end automated process. No additional

approvals would be required on the timesheet.– Build of the form is complete. Currently building the integration over to the timesheet.– Planning to roll-out to pilot departments.

Flexible Spending AccountsPUG MeetingMarch 21, 2018

FY2018 Open Enrollment Activities Open Enrollment April 4 – May 2, 2018 Attend GIC Coordinator Trainings

Amherst March 26 Bedford March 27 Boston March 28 Brockton March 29

GIC Health Fairs in April 13 heath fairs throughout the state See www.mass.gov/gic/healthfairs for dates, times and

locations

Coordinator TrainingMondayMarch 26

TuesdayMarch 27

WednesdayMarch28

ThursdayMarch 29

10 am - noon 10 am - noon10 am – noon

and1 pm – 3 pm

10 am - noon

UMASS AmherstCampus Center

Room 163 C

Middlesex Community

College Cafeteria

McCormack State Office Building

21st Floor

MassasoitConference Center

Amherst, MA 591 Springs RoadBedford, MA

One Ashburton PlBoston, MA

770 Crescent StBrockton, MA

2018/2019 Plan Provisions Eligibility

Must be GIC eligible to enroll in DCAP New Hire Enrollment

Must sign up within 10 days Unpaid Leave-of-Absence

Catchup payment allowed upon return to work

2018/2019 Plan Provisions Cont’d HCSA Plan Year Maximum

IRS limit increased from $2,600 to $2,650 DCAP Pay Period Maximum

Weekly - $96.15 Biweekly - $192.30 (HR/CMS)

Check Reimbursement Minimum $25 (does not apply to electronic payments)

Plan YearsGIC Fiscal Plan Year 2017/2018 GIC Fiscal Plan Year 2018/2019

Number of Months 12 months 12 monthsPlan Year Dates 7/1/2017 - 6/30/2018 7/1/2018 – 6/30/2019

HCSA Maximum $2,600 $2,650HCSA Minimum $250 $250DCAP Maximum $5,000 per tax year

Weekly: $96.15 per pay periodBiweekly: $192.30 per pay period

$5,000 per tax yearWeekly: $96.15 per pay period

Biweekly: $192.30 per pay periodGrace Period 2.5 months 9/15/2018 9/15/2019Deadline to File Claims 10/15/2018 10/15/2019

Bi-weekly Deductions Start 6/25/2017 6/24/2018

Bi-weekly Deductions End 6/23/2018 6/22/2018

Number of Pay Periods FSA 26 FSA 26

Employer Portal

Secure portal with unique credentials for each Coordinator

ASIFlex posts enrollment reports and payroll discrepancy reports

Coordinator can upload enrollment forms and status change forms

Coordinator Action Items May/June Activities

Review 2018/2019 enrollment lists posted to Employer Portal 2018/2019 Enrollments and 2017/2018 Not re-enrolled

Make changes to enroll or terminate as needed Updated HR/CMS job aid will be posted in Knowledge Center

On-Going Pay Period Discrepancy Reports Will be sent through your Employer Portal

Email sent when report is posted Resolve discrepancies within two business days Payroll error refunds, payroll reversals, must be sent to GIC and

requested within 60 days of internal error. Qualifying event status changes do not warrant a refund.

Coordinators fax or upload new hire and change forms to ASIFlex, not the GIC

Contacting ASIFlexCoordinators Only Participants

Mailing Address ASIFlex Customer ServiceP.O. Box 6044Columbia, MO 65205-6044

Website www.asiflex.com/gic

Email asi@asiflex.com

Customer ServiceHours

8 AM to 8 PM Mon. – Fri.10 AM to 2 PM Saturday

Toll-Free Phone 1.800.659.3035

Toll-Free Fax 1.877.879.9038

AccountManager Kaleena Kollmeier

Email flexgic@asiflex.com

CoordinatorsOnly

(888) 602-4132

Direct Phone (573) 777-5631

Direct Fax (573) 442-4435

NOTE: Do not refer participants to the account manager. Refer to customer service.

Participant calls to account manager will be referred to Customer Service.

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

Calendar Year Wrap Up

Kevin McHughStatewide Payroll Team

2017 2016 2015 2014 2013 2012 2011

Box 1Federal Taxable Wage $5,269,869 $4,696,071 $4,758,687 $4,501,969 $4,279,015 $4,072,242 $3,942,447

Box 2 Federal Tax $776,525 $676,019 $669,238 $627,667 $587,110 $553,514 $536,718

Box 5Medicare Taxable Wage $5,524,877 $4,830,845 $4,787,707 $4,425,831 $4,124,196 $3,839,933 $3,639,380

Box 6 Medicare Tax $80,166 $70,080 $69,458 $64,197 $59,812 $55,691 $52,770

Box 16State Taxable Wage $5,754,339 $5,170,022 $5,236,897 $4,949,269 $4,701,327 $4,469,058 $4,319,843

Box 17 State Tax $275,425 $246,719 $251,958 $239,604 $229,480 $217,673 $213,385

TOTAL W-2 Employees 118,637 113,205 115,406 114,238 112,730 110,031 110,013

HR/CMS W-2 ($ in Millions)2017 includes MBTA

2017 W-2

COMPANY COMMONWEALTH MBTAGrand Total

BOX Federal MASS All Other States Federal MASS01 $4,776,453,383.46 $493,416,119.18 $5,269,869,502.6402 $696,634,974.55 $79,890,705.35 $776,525,679.9003 $525,011,139.23 $525,011,139.2304 $32,550,690.76 $32,550,690.7605 $4,989,938,869.76 $534,938,786.39 $5,524,877,656.1506 $72,408,332.11 $7,758,384.71 $80,166,716.8210 $6,797,345.43 $177,519.75 $6,974,865.1812C $161,611.20 $161,611.2012DD $887,401,401.16 $75,320,610.03 $962,722,011.1912E $15,816,706.19 $15,816,706.1912EE $8,687,618.06 $717,210.14 $9,404,828.2012G $164,474,122.21 $12,608,523.90 $177,082,646.1112P $64,053.45 $64,053.4514M $42,714.00 $42,714.0014O $19,743,276.95 $816,964.80 $20,560,241.7514P $2,172,718.36 $22,001.14 $2,194,719.5014R $3,145,769.58 $3,145,769.5814S $271,939.21 $38,401.38 $310,340.5914T $352,676.68 $352,676.6814W $16,908.33 $2,166,564.92 $2,183,473.2514Y $484,946,184.02 $31,850,615.13 $516,796,799.1514Z $199,438,101.68 $17,101,824.61 $216,539,926.2916 $5,255,983,983.05 $4,897,935.75 $493,457,578.35 $5,754,339,497.1517 $251,584,984.54 $218,073.02 $23,622,893.83 $275,425,951.3918 $674,310.54 $674,310.5419 $17,237.12 $17,237.12

2018 Tax Changes

Federal Tax Tables reduced Amount withheld; important to encourage employees fill out new W-4

Previously employees generally would put a '1' for themselves, another '1' if they're married and would put the number of children that they have that are dependents. Employees add those all up and claim a withholding exemption for the amount of total exemptions that they have. But this new law changes no longer has an exemption per person, the W-4 form needs to be updated.

It's particularly important to review withholding this year if the employee itemize deductions, owns a home, or are in any other situation that complicates their tax return, or has any kind of special circumstances outside of the norm, then their withholdings are probably going to be quite off.

Encourage the use of the IRS withholding calculator, which it recently updated.

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

Reminders from Legal

Jenny Hedderman, Esq.Deputy Comptroller and General Counsel

Payroll Expectations

• Payroll is accurately entered by employees/Department representing actual hours worked or appropriately approved leave.

• Payroll is appropriately validated and approved by supervisors to ensure that payments have been validated and approved as actual hours worked or appropriately approved leave.

• Payroll is appropriately approved by the Department DHSA• Payroll is managed to ensure that funds are available to

support planned payroll obligations and individuals are not allowed to work if funds are not or will not be available to pay for hours to be worked

Payroll Expectations Material Mistakes or “Adjustments”

• While there may be minor mistakes or adjustments in hours or leave due to an employee’s error in putting in hours or leave, these adjustments should normally be caught at the time of payroll approvals if the payroll is being properly validated and approved by supervisors.

• A high number of payroll adjustments due to failure to properly validate by supervisors should not be considered “routine” and creates unnecessary and expensive costs for corrections.

• High number of payroll mistakes identifies an internal control weakness and higher risk for waste, fraud and time theft.

• For example:– Approving payroll just to get it done and then going back to identify anomalies

or changes after the fact is not best practices and creates high risk of waste and fraud.

• Internal controls must be put in place for supervisors to review and validate all time entries so that corrections are limited to unusual circumstances.

Increase in Payroll MistakesWhy does this Matter?

• CTR has identified a concerning increase in payroll errors.

• CTR staff spend increasing amounts of time correcting errors in order for payroll to run.

• Some payroll mistakes that went undiscovered by Department have resulted in weeks, months and years of overpayments – thousands of dollars.

• Some are smaller recurring amounts that don’t appear as an anomaly with reports so don’t stand out (e.g., payroll reimbursement of $200 per pay period) but accumulate to thousands in overpayments over time if not caught.

Increase in Payroll MistakesWhy does this Matter?

• Some of these “mistakes” occur during a “transfer” of employees when the onboarding salary is not validated, or when travel or other non-standard costs or reimbursements are established without an end date and recur per pay period.

• Any “overpayments” to employees can be considered payroll “theft” since these employees were not entitled to these amounts, but have received the monetary benefit for funds not earned.

• In addition, some employees have received “retirement” creditable service and higher contributions for these amounts which entitles them to higher payouts for retirement if not caught prior to retirement.

• These circumstances demonstrate poor internal controls, poor validation and waste.

Increase in Payroll Mistakes Costs the Department and CTR Valuable Funds

• When these mistakes are discovered, the Department and CTR face significant costs to reconcile the payroll and the Department must recoup the overpayments, which may involve union negotiation or litigation.

• Payroll adjustments may also involve tax reconciliation for both the Commonwealth and the taxpayer which may require the taxpayer to refile their taxes and may trigger negative tax consequences or flag the employee or the Commonwealth for audit.

• Mistakes that allow overpayments result in lost dollars that the Department can not recover and use for other payroll purposes and may trigger deficiencies.

Major Payroll Mistakes = Catastrophic Results

• With tight budgets, these types of payroll mistakes are extremely costly and time consuming to rectify for both the Department and CTR.

• Larger mistakes can result in litigation, audits, bad press with embarrassing accusations of negligent payroll management, and potentially criminal or disciplinary action against the overpaid employee(s) and disciplinary action against payroll staff, supervisors who failed to properly validate time, and Department management.

Payroll Entries and TransparencyNothing to Hide

• Payroll payments are coming under increasing scrutiny• With recent public record requests (Leave with Pay,

Race of Employees) the press is hunting for fraud, waste and abuse or poor internal procedures

• The SAO and IGO are also on the hunt for fraud, waste and abuse

• Recent payroll abuse reported in the press means more PIRs and scrutiny of payroll transactions

• It is critical that all payroll entries are appropriate and follow Best Practices and Payroll Guidance

Payroll Entries and TransparencyNothing to Hide

• Payroll entries are not “just” payroll entries. Any entry follows the same legal and fiscal requirements as any other Department expenditure.

• All entries are considered part of an employee’s personnel file and must be accurate and complete, and may be subject to litigation.

• With increased transparency of payroll through CTHRU, there is also an increased pressure to “hide” certain payroll payments to avoid transparency or avoid CTR or other review

DON’T. • Intentionally entering incorrect codes or misrepresenting payments

to avoid transparency will eventually be discovered and is a state finance law violation

Major or Material Payroll Corrections Are Internal Control FailureTime Theft is SERIOUS violation

Caution – Do Not Hide

• Material payroll changes presume a failure in internal controls and should NOT be considered “routine”.

• Material” means mistakes by employees or Department that equal to or are greater than one day’s pay for that employee. Why?

– An employee’s failure to put in time correctly within the pay period is considered a failure of timesheet entry unless there are extenuating circumstances. Even so, these should be corrected in most cases within the pay period.

– Poor employee time sheet entry and submission leads to increased risk of “time theft”. – Time theft includes putting in for hours not worked, overtime not worked, overstating hours

worked or “misclassifying” type of pay, e.g., entering “REG” when should have been “VAC” to be able to use the VAC at a later time.

– Poor Department supervisor oversight and validation of time sheet entry presumes failure of internal controls and compounds and enables time theft mistakes since these mistakes should be “caught” during validation if proper oversight is being maintained by supervisors.

– There is no “tolerance” level of time theft allowed for public funds. Allowing payroll to run “un-validated” violates state finance law and would be considered a high risk for intentionally or negligently allowing potential time theft.

Be warned: Intentional Misrepresentation of Payroll Entries is a State Finance Law Violation

• All payroll entries are subject to M.G.L. c. 29, s. 66, so intentionally misrepresenting payments or trying to hide payments may be considered a statutory violation.Section 66: Violation of state finance laws; penalties Section 66. Any officer or employee who knowingly violates,authorizes or directs another officer or employee to violatethis chapter, or any rule or regulation promulgated under thischapter, or any other law relating to the incurring of liabilityor expenditure of public funds, shall be punished by a fine ofnot more than $1,000 or by imprisonment in a jail or house ofcorrection for not more than 1 year, or both.

• You are responsible for all entries you make. When in doubt, ask CTR.

Major or Material Payroll Corrections Are Internal Control FailureSettlement, Release, Negotiation or Criminal Action

Caution – Do Not Hide

• Major mistakes, corrections, payments or adjustments (due to Employee or Department errors) may require a settlement or release for employee or Department to document the correction– “Material changes must be documented as part of personnel file, in

HR/CMS or in some manner for audit purposes. • Time theft may require criminal action and audit of payroll entries

since these entries were “approved” by Department. This may also involve litigation.

• CTR should be consulted immediately to ensure corrections are made appropriately and any other associated impacts, (retirement, vacation etc. are also properly adjusted) and whenever there has been:– a “failure to pay” for hours worked within the appropriate pay period– an overpayment of wages for any pay period– A requirement for a material payroll correction.

Settlements and JudgmentsPayroll and Legal Staff Must Follow Guidance

• Website has Policy, instructions, forms and process to follow for Settlements

• Legal Staff must follow Settlement and Judgment Policy when litigating and negotiating claims, including how payroll items are negotiated

• Legal Staff should be consulting payroll staff to ensure what is being negotiated can be supported in payroll in accordance with SJ Policy.

• When in doubt contact CTR.• Instructions will be provided to payroll staff for how to enter claims• If instructions not provided by CTR or under Policy, Payroll staff

should validate with CTR that process is appropriate prior to entry.

Settlements and JudgmentsMailbox and Instructions Website

• (Mailbox) for fastest response all SJ emails should be sent to: Settlements.judgments@massmail.state.ma.us

• Settlement and Judgment Forms, Policies, Instructions:https://www.macomptroller.org/settlements-and-judgments

Settlements and Judgments

Judgments include: • Any court or administrative Judgment, arbitration or MCAD

order that requires specified payroll or other monetary payments, payroll corrections or adjustments.

Settlements include:• Any negotiated, agreed upon or other resolution of an

employment claim, grievance or other matter that results in:– monetary payment– Payroll adjustment – vacation or other leave adjustment is a

monetary adjustment – e.g., VAC hours are considered regular salary

– Any other material payroll correction or adjustment.

Settlements and JudgmentsTypical Settlement and Judgement “Payroll” Payments

1. Lump Sum – Compensatory Damages: (S/J – A11)– Specified amount of non-specified damages, treated as regular compensation not subject to

RET. Includes any COBRA or other costs incurred during any period off payroll. (these are considered income and are taxable)

– Vacation time and Comp time should NOT be used in place of Lump Sum payments. Vacation is “earned leave” and employees may not be given more Vacation time than legally earned since VAC adds to retirement.

2. Back Pay – for Period off payroll, or difference in pay that should have been paid. (SJP – A11)– Must be documented with specific #hours, days and salary back up – Any interim earned income from other sources during any period off payroll must be

identified.• Retirement contributions must be made on total Back Pay payment.• Interim earnings are deducted from total award so employee is taxed and paid only on net Back Pay

actually paid. • CTR manages the tax and retirement coding to ensure accurate payments. Otherwise employee will

not get sufficient retirement credit and will be overtaxed for back pay. • Vacation and other payroll adjustments must be coordinated to match period of back pay and

appropriate accruals.

Types of Payments

Settlements and JudgmentsTypical Settlement and Judgement “Payroll” Payments3. Reimbursements. Documented out of pocket

medical expenses for emotional distress or pre-paid attorneys fees. (B10)– This earning code is non-taxable and will be highly

audited, therefore use must be limited to allowable reimbursements. Settlements may not be paid under B10 if employees/counsel/union want it to be tax free.

4. Interest. Pre judgment and post judgment interest. All interest is tax reportable and taxable. (INT/E29)

Types of Payments

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

Our Responsibilities

Kevin McHughCommonwealth Chief Payroll Officer

CFO Duties

• Key State Finance Law Compliance– Oversees payroll (including payroll cost reporting),

budget, revenue, payee, procurement, expenditure, fixed asset and internal control issues as these issues relate to the state accounting system

– Works closely with Department Head and staff to ensure that department expenditures (including payroll) will not exceed appropriations in violation of state finance law and that, if appropriation shortfalls are anticipated, the necessary steps are taken (in accordance with law) to reduce department obligations and expenditures to live within current appropriations

Payroll Director

Compliance Areas and Policies

• Department needs to read and understand Payroll Policies• Department needs to follow Payroll Best Practices and Job

Aids for creating and reviewing payroll transactions• Department needs Internal Control steps to identify areas

of risk and prevention of errors– Paying wrong amounts– Paying employees late– Using wrong pay codes

• Department needs to follow payroll adjustment procedures – Correcting overpayments/ underpayments– Correcting taxes: W-2C and 1099– Proper use and reconciliation of DYNACash

Payroll HR Responsibilities

• Payroll needs to review transactions entered by HR to determine if data used to produce payroll is properly entered and authorized

Employee set-up compliance

• Classifying employee/ independent contractor and contingent worker

• Confirming work eligibility (SSN, I-9)• Hourly versus Salaried Employees• Tax withholding (W-4/M4); exempt employees; out-of-

state employees• Proper entry of pay rates• Setting employees in correct Leave Plans, Benefit

Programs and Retirement Plans• Ensure all dates are accurate for Leave Plans and

Retirement

Paying Employees

• Use and review of timesheets (a payroll invoice)

• Use of correct pay codes—taxable/ non tax; subject to pension; imputed income

• Reimbursements and Accountable Plan

Making deduction payments

• Tax• Voluntary Deductions (Union Dues, Special

Insurance, Transit, etc.)• Garnishments• Retirement and Retirement Plans (457, 403B,

and OBRA)

Charging Payroll Costs Correctly and with Sufficient Funds

• Set-up correct COA for employees charges• Provide justification (rules) for charging

appropriations separate from the position assigned Appropriation

• Ensure budget can support payroll charges before allowing employees to work

FICA tax is a mandatory deduction for Commonwealth Employees hired after March 31, 1986.

Please make sure when hiring, rehiring and/or transferring an emplid, their FICA status is correct.

Only 2 options to choose from“Exempt “or “Medicare Only”

Please visit our website at www.mass.gov/osc

and refer to these links for guidanceMedicare Tax (10/17/2008)

Determining Medicare Tax Status (11/1/2006)

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

Payroll ReconciliationTryntje BumgardnerStatewide Payroll Team

Payroll Reconciliation

Before and After

• Time and Attendance– Online Reports– CIW Queries

• Payments/Deductions– Predictive Paycheck– CIW Queries

• Funding– Dept Notifications– Online Reports– CIW Queries

• Payroll Expenditure Approval– Online Reports– CIW Queries

• Funding– Online Reports– CIW Queries

• Record Retention– Online Reports– CIW Queries

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

Pre-Payroll Reconciliation

Time and Attendance

• Self-Service– Multiple reports available online in HR/CMS– Updated with each Time Admin– Limited results; can be exported to Excel

Time and Attendance

• All reports from HR/CMS also available in Mobius Luminist– Updated with each Time

Admin– All results; generated in

PDF

Time and Attendance

• All reports are available in the CIW

• Updated with each Time Admin

• Unlimited results; can be exported to Excel

• Starter queries available

Payments and Deductions

• Employee Paycheck Data– Monitor and catch overpayments/underpayments– Predictive for standard hours through Tuesday of

Week 2– If no predictive paycheck visible in HR/CMS, check

HPAY011 http://www.hrcms.state.ma.us/KnowledgeCenter/TrainingAndSupportTools/JobAids/JobAidDownloads/PY_13.4_RD_View_and_Correct_Payroll_Error%20Messages.docx

HPAY011

• Report will include EEs with multiple jobs• The Message Data will define the affected Empl ID• Disregard if the record is not attached to your dept• Understand that actions you take in the system have an

impact on other agencies if employees are employed at multiple agencies

Payments and Deductions

• CIW has predictive tables available– Updated with each nightly batch for paychecks,

deductions, taxes, earnings and special earnings– Unlimited results; can be exported to Excel

Reconciliation

• Bi-weekly Comparison– Is the employee being paid at least their base?– Is the difference accounted for? (Salary Increase,

Unpaid Leave, etc.)

• Exceptions– Are there payments that are not included within

their base? (Overtime, Differentials, Reimbursements, etc.)

Reconciliation (Cont’d)

• Query current comprate for all active deptemployees

• Compare current comprate to Predictive Paycheck or LCM Predictive data– Predictive Paycheck updates nightly; summarizes

earnings– LCM Predictive runs Mon, Tues, Fri; earnings detail

• Resource document and SQLs available

Predictive Funding

• Statewide Payroll Team sends five (5) e-mail notifications throughout the pay period regarding insufficient funding

• There are also reports available throughout the pay period in Luminist

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

Post-Payroll Reconciliation

Payroll Expenditure Approval

• Payroll Expenditure Approval – A signatory authority or authorities certify the entire payroll based on the confirmation of managers. http://www.macomptroller.info/comptroller/docs/policies-procedures/payroll-lcm/po-pr-exp-approv.pdf (includes link to form)

Funding

• Two reports in Luminist for unfunded payroll issues after payroll processes

• Corrections need to be made as soon as possible in MMARS/LCM

Record Retention

• Departments are required to preserve payroll records for seven years from the last date of entry.

• http://www.macomptroller.info/comptroller/docs/policies-procedures/payroll-lcm/po-pr-arc-pr-rec.pdf

• The use of Luminist as on on-line report storage device has replaced the need to retain and store paper reports.

Record Retention

• If a Department has been notified of a pending audit or has an audit in process, all records pertaining to the audit (Statewide Single Audit, Audits performed by the Office of the State Auditor, the Federal Government, or any other Audit group) need to be kept until the completion of the audit. Consideration should be given to Federal gov’t requirements for retention of records pertaining to Federal programs and activities administered by the Commonwealth.

Welcome

Kevin McHughState Payroll Director, CTR

CTR Payroll User Group

Payroll Close/Open Timeline

Kevin McHughStatewide Payroll Team

Fiscal Year Reminders

• Prior to June 1: Identify any FY19 COA changes, e.g. program codes or appropriation changes

• May 1st- Start entering PH documents• June 1st – Position Rules Roll Departments can begin

requesting FY19 Rules• Date TBD - PH over $25K requires ANF approval for

Executive Departments

Key Dates - Last Payroll FY18

• Pay Ending June 23, 2018 Last full Payroll in FY18• June 24th – First day of Split Year Payroll• June 30th – Last day for entering PH and Last day for

HR/CMS data entry• Last Day for PRRV (Cash Cut off of 7/1) for FY18• July 1st – Beginning of FY19• June 29th – Pay Day for Last full PP in FY18

Mass Rules Roll - MPOAA

• On June 1st, CTR will either approve or reject all pending POAA Rules requested for FY18 Activity and will Process the MPOAA program. Any new rules needed for FY18 or FY19 Activity can be entered after June 4th.

• New draft rules for FY19 will be in the LCM document catalog

Accounts Payable

• Payroll Holds are object code based so departments need to encumber based on estimated payroll dollars i.e. A01, A08, B02, etc.

• All PH documents will workflow to CTR Payroll in order to assist departments in proper PH documents set-up.

• The PH document must include a justification in the Comment.

HR Reminder:

• Be careful when rehiring employees whose HR/CMS history (Object Code, Account, Unit) shows Accounting information no longer valid in the new FY.

• It must be corrected as of July 1 in the new FY.

Questions?

Thank You!!!