Please review the general reminders below before submitting payroll funding corrections.

• Before submitting a PFC to OMES, you must run an ABC report to ensure your entry will pass budget check. Ensure you validate all chartfields that affect budget: Department, class fund and bud ref. OMES Central Accounting and Reporting cannot post a PFC if there is insufficient budget for the new entry.
• Chartfields entered for the credit lines must match the original payroll lines.
• The amount on the credit line cannot exceed the amount from the original payroll line.

For additional information, review the Crash Course with CAR training session on payroll funding corrections.

Crash Course with CAR will return in September for a joint session with the Office of the State Auditor and Inspector (SAI). This special two-hour virtual training will be helpful for those in accounting, finance, purchasing, HR and some IT roles. 

September Crash Course with CAR:

• When: Wednesday, Sept. 9, from 1-3 p.m.
• Topic: Internal Controls – Segregation of Duties.
• Registration: Select the buttons below to register.

Save the date for the following session:

• When: Wednesday, Oct. 7, from 12-12:30 p.m.
• Topic: PeopleSoft tips and tricks.

Need a refresher? Select the links below to review past sessions:

• GAAP Package Overview
• Encumbrance Corrections
• Payroll Funding Corrections
• Warrant Replacements
• Accounts Receivable Regular Deposits

Agencies must process a transfer out of their clearing account at least once per month (62 O.S. § 34.57.E). The account does not need to be brought to zero every month, but agencies should not retain funds indefinitely in the clearing account. If an agency has revenue that must be transferred to General Revenue, statute requires the transfer to occur by the second Monday of each month. Transfers from an agency clearing account to agency revolving class funds do not have a required schedule. 

This requirement helps ensure timely deposits and accurate statewide financial reporting. Please verify your agency’s processes comply with this statutory mandate.

The Office of the State Treasurer (OST) has extended the implementation timeline for the new Treasury and Cash Management system to provide agencies additional time for testing, training and preparation. The system is now set to launch Aug. 24.

OST appreciates the feedback received throughout this process and will provide a more detailed timeline and transition activities as Aug. 24 approaches.

To stay informed, please select the link below to update your contact preferences, and share the link with others in your agency. OST thanks you for your continued partnership as we modernize our financial systems for the State of Oklahoma.

Please thoroughly review any medical support orders received for employees and respond accordingly. Child Support Services (CSS) is required to send a National Medical Support Notice (NMSN) and an Income Withholding Order within two business days after the date CSS is notified of an employee who is an obligor in a child support case. Additionally, you may receive an NMSN for an employee who is the custodian of a child if the child support order requires that person to provide health insurance for that child.

Employers and insurers must comply with the NMSN. The total amount withheld for child support, health insurance premiums and cash medical support cannot exceed the Consumer Credit Protection Act withholding limits unless an employee consents to pay the amount in excess of the withholding limit. Agencies should maintain documentation of the employee’s consent. The Oklahoma Department of Human Services Child Support Employer Services Employer Handbook provides guidance for employers when an NMSN is received. Once an agency receives the NMSN, please follow the instructions and process the notice promptly. Any delays in processing the notice could result in a follow-up from CSS and potentially put the agency at risk of sanctions for failing to comply with the notice.

Agencies with employees working outside Oklahoma should be aware that other states may have implemented a Paid Family Medical Leave plan or other state plan as required by their laws. Such a plan may involve the withholding of amounts in the form of an employee withholding, an employer withholding or a combination of both. If such amounts are included in the payroll results, do not adjust or refund the withholdings. We are required to withhold, remit and report in accordance with state laws. Agencies need to understand the withholding and reporting requirements for each state where employees are working.

Note: The IRS has determined any employee amount due that is not withheld from an employee but is paid by the employer is considered taxable income to the employee and must be included on their W-2. As an employer, the State of Oklahoma shall not pay an employee's share of required state tax or other withholdings on their behalf. All employee amounts must be withheld from their payroll.

All compensation to employees and former employees, regardless of the form, constitutes wages unless specifically excluded by the Internal Revenue Code. Examples include stipends, allowances, employee lawsuits and settlements, gifts, prizes, awards and fringe benefits. Before compensation is given to employees or former employees, agencies must determine the correct method of payment (payroll vs. accounts payable) and reporting required (W-2, 1099 or none). In an audit, the IRS will focus on the reason for the payment. 

Public school teacher payments

The IRS has determined that Oklahoma public school teachers receiving payments from a state agency are to be treated as employees of the state. As such, any payments to teachers must be evaluated to determine if the payments should be considered wages. If so, the amounts must be paid through the payroll system, not accounts payable, to be reported on Form W-2 by the paying agency. 

Attorney fees

Attorney fees paid on a settlement are reportable to the plaintiff if the settlement is a reportable settlement. For attorney fees paid through accounts payable, the amount must be reported to payrollreporting@omes.ok.gov. The attorney will automatically receive a 1099-MISC reporting the amount in Box 10 if the correct account code is used on the voucher payment. The plaintiff reporting requires a manual entry and must be reported to OMES. 

If a payment settles a lawsuit, the auditor will focus on the basis of the lawsuit. Agency payroll, finance, human resources and legal departments should obtain the knowledge needed to accurately process compensation to employees or former employees. Agencies are responsible for complying with IRS requirements for withholding and reporting. 

If the plaintiff is a current or former employee and the settlement or judgment payment is income that constitutes wages, the payment is reportable as compensation and included on the Form W-2 and all applicable taxes and deductions must be withheld. For any payment that is income but doesn’t constitute wages, the payment will be subject to reporting on Form 1099-MISC to the plaintiff in Box 3, Other Income.  

If an agency has a settlement agreement that requires the payment be processed through accounts payable instead of the payroll system to expedite processing and the payment is reportable as compensation, then applicable federal, state and FICA taxes must be remitted to OMES on the same day the settlement to the individual is processed. If taxes are not withheld on the payment, the agency must gross up the amount and pay both the employee and employer share of taxes. The employee’s record will be updated for year-end reporting. If additional guidance is needed, please email payrollreporting@omes.ok.gov. 

Please be aware of the processing time when entering the tax journal entry and scheduling the tax payment on the OST payment system to ensure payments are entered and set to pay by the liability due date.

Tax payment information that has been entered into the OST payment system must be provided to CAR through a journal entry in PeopleSoft and a ServiceNow ticket by 10 a.m. for the payment to be released by OST that same day. OST release allows payment to be issued the next business day, so agencies must ensure that the effective date be at least one day in the future.

2026 Annual Statewide Conference

• Friday, Aug. 28, from 7:45 a.m. to 5 p.m.
• Grand Casino Hotel and Resort: 777 Grand Casino Blvd., Shawnee, OK 74804
• Additional conference information.

Calculating Paychecks

Calculating Paychecks provides a comprehensive overview of the rules, regulations and calculation methods essential to accurate payments. Better understand minimum wage requirements, overtime computations, federal and state tax withholding, benefits-related adjustments, and the proper handling of wage deductions and garnishments. Each course is presented in four segments which cannot be purchased separately.

September course – four sessions (noon to 1:30 p.m.)

• Sept. 3
• Sept. 4
• Sept. 10 
• Sept. 11

All classes are interactive virtual style. To learn more and register, visit the PayrollOrg website.

Upcoming employee services webinars:

• Aug. 19
• Oct. 21

Additional information on webninars.

Live Online Seminars Presented by Fred Pryor Seminars.

Live or On Demand Webinars Presented by myCPE.

Multiple webinars and on-demand videos available.