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CAR Newsletter - February 2021

Volume 31, Number 8
Fiscal Year 2021
February 10, 2021


Statewide Cost Allocation Plan

The State’s SWCAP for FY21 has not yet been approved and will not be posted to our website until the approval is official. However Cost Allocation Services has informally told us that the Section I cost allocation should be fine to use and is not being questioned. If your agency uses Section I of the SWCAP for claiming indirect costs on federal programs, please e-mail and we will send you a draft copy.

Crediting P-Card Rebates to Federal Programs

Agencies must take P-Card rebates into consideration when charging P-Card purchases to federal programs. Any rebate that it attributable to a purchase that was charged to a federal program should be credited to that program and returned to the federal agency or netted against future charges to the program.

Mileage Reimbursement When Teleworking

During the pandemic many employees who normally work in the office have either been required or allowed to telework. The current temporary telework situation has created some complexities in determining what may be reimbursed, and what reimbursements are taxable. The Statewide Accounting Manual states:

“The official duty station is the employee’s or officer’s official workstation/office. It is normally the city in which the employee or officer is assigned to work. Employees or officials whose duties are normally mobile and statewide or multi-county in nature may be deemed by the agency to have no official duty station or office; therefore, the person’s home is their official duty station. Once the duty station has been established, it cannot be changed unless the employee or officer is assigned to work at a different location.

 "The starting and ending point of travel is the official duty station unless the employee is leaving on the trip straight from home or another location and the home or other location is closer to the destination than the official duty station. In that case, the home or other location is the starting point of travel.”

The current COVID situation has resulted in many employees teleworking temporarily or part-time. Employees who are teleworking during the pandemic should be allowed to treat their home as their official duty station when traveling on state business. However, agencies should not allow mileage reimbursement when employees who are teleworking are asked to come into the office location for a meeting or any other purpose. One of the perks of teleworking is that the employee does not have to commute into the office, but employees should not expect to be compensated on the occasions that they are asked to do what should be their normal commute.

Clearing and Special Account Reconciliations

Agencies are required by statue to reconcile clearing and special accounts on a monthly basis. Reconciliations are due by the 20th of the following month. This activity is an important internal control and it is the method of posting disbursements for these accounts. The reconciliations should be taken seriously. Statute provides for penalties for not complying with this requirement. A Form 11 reconciliation should not contain plug numbers or ongoing unreconciled differences. OMES Central Accounting and Reporting will be reviewing agency reconciliations in detail and may be contacting you for additional information. If there has been turnover in your agency and training is needed on the process, please contact

Common Issues Related to Clearing and ASA Accounts

Central Accounting and Reporting has been doing some in-depth reviews of the reconciliations and data presented on the Form 11 and 11A for agency clearing and ASA accounts. Each account must be completed correctly and supported by backup documentation. During the process of our reviews, we are finding some common errors or deficiencies, which are noted below. This information is being provided so that agencies can review their processes to ensure that the accounts are being used correctly and that the reconciliations are accurate and supported by backup. 

 Stat cancel warrants are not being reported or are being reported incorrectly. Warrants that have been outstanding over 90 days are stale dated warrants and cannot be cashed. Those warrants should be removed from the outstanding warrant amount and should be shown as a negative expenditure in the voucher area of Section A. A journal entry reducing (crediting) the expense account should be created in the State Accounting System. The entry will be posted when the completed Form 11 or 11a is processed by CAR.

Deposit Transfers could include money being transferred into or out of the account. Transfers out must be reported in the voucher area of Section A and must be shown in the transfers area. Transfers in must be presented in the receipts area of Section A. Do not net the transfers in and out. Do not report the transfers out in the Vouchers and EFT Payments area.

Adjusting items related to deposit corrections are being included but corrections are not being completed. If there is a deposit correction necessary, the Form 76 must be completed and submitted to OST. The agency should be following up on deposit correction requests to ensure that they are completed. These items should be clearing in a timely manner.

The beginning balance in Section B must be the ending cash balance from the prior month. If the prior month’s Form 11 or 11a have been revised, use the ending balance on the revised form.

Section B should not include any adjustment items. For ASA accounts that have investments (a rare item), a line has been included to report the investment balance. No other entries should be made in Section B.

If accounts have unreconciled or unknown differences in either Section C or Section D, these amounts should be presented on a separate line from known reconciling items. Agencies should be actively researching to determine what caused the unreconciled difference. This difference should not be changing each month as that would be indicative of another issue.

General Ledger Journal Entry Requests

All journal entry requests must include the appropriate information when it is submitted to Central Accounting and Reporting. The most common requests include the following categories:

Cash transfer request (OMES Form 10A) – The appropriate authority for the transfer must be included. Usually this will be a specific statute or bill. When including a bill number, be sure to include the legislative session in which the bill was passed. The form should be signed by an authorized signor or the Chief Finance Officer.

340 fund journal imports – These summarized entries should be submitted daily and include the total of disbursements for that day. Cancelled or stat-cancelled 340 fund warrants should be included as a separate entry to allow for validation. These submissions must include the authorized signor.

Payroll funding corrections – All payroll funding corrections must include reference to the entry that is being corrected. Most payroll funding corrections are a result of an employee being incorrectly set up in the HCM system. When funding errors are discovered, the correction should be made in the HCM system. These submissions must be signed by an individual authorized to sign the payroll funding claim.

Questions regarding the required documentation and submissions of journal entry requests should be sent to


Comprehensive Annual Financial Report Published

As of Jan. 29, 2021, the State of Oklahoma’s Comprehensive Annual Financial Report (CAFR) for fiscal year 2020 has been completed. The Financial Reporting Unit would like to thank all state agencies for their effort and cooperation in providing timely financial information. The CAFR is available online through OMES’s website

GASB 87 Lease Reporting

In preparation for the upcoming changes to lease reporting, the Financial Reporting Unit will be implementing software that will be used for tracking lease information required by GASB Statement number 87 during fiscal year 2021. As part of this process, financial reporting analysts will be reaching out to agencies for lease data on all leases where the leasee and leasor are not both general fund agencies. More information will be provided as it becomes known. In the meantime, please begin gathering a list of lease agreements entered into by the agency.


IRS Form W-4 and OK W-4 Exemption Renewals

Agencies must review and ensure employees have valid forms on file for 2021. The exemptions expire on Feb. 16, 2021, and employees must submit new forms to continue exemptions for 2021. If you receive an exempt W-4 after Feb. 16, do not process a tax refund to the employee or submit one to OMES for processing. The W-4 will take effect on the next pay cycle; it is not retroactive to the beginning of the year. The PeopleSoft HCM query: GO_PY_TAX_EXEMPT_STATUS – Fed or State Tax Exemption can be run by agencies to see who is currently claiming an exemption from income tax withholding. The IRS has posted the 2021 W-4 form on their website and the OK-W-4 form can be found on the OTC website.

Reporting Requirements for Repayments of Prior Year Wage Amounts

Repayments from employees made in the current year (2021) that are for overpayments of wages in a prior year (2020 or earlier) must be repaid at the gross overpayment amount in accordance with Internal Revenue Service regulations. A W-2C must be completed and sent to OMES. Only Social Security and Medicare wages and taxes are corrected on the W-2C.

Do not correct federal or state taxable wages or income taxes. The employee received and had use of the funds during the year of overpayment and as such, the amounts are taxable for federal and state purposes. The employee may be able to consider such repayments on their current year (2021) income tax return. Please advise the employee to speak to a tax accountant.

Additional instructions for Form W-2C are available on the IRS website. For assistance, contact Jean Hayes at 405-522-6300,

Reduction of Annual Leave Hours for Overpayments

When an employee chooses to reimburse an overpayment of salary or wages using annual leave, the amount of annual leave reduced should equal the gross amount of the overpayment.

If an employee reimburses an overpayment using terminal leave, an OMES Form 94P must be submitted to correct the retirement amounts reported on the check that included the overpayment. Terminal leave is not included in retirement wage calculations; therefore, a payroll correction is required. For assistance, contact Jean Hayes at 405-522-6300,

Outstanding Wages Beneficiary Designation Option

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 relieves stress and anxiety on the family members and provides agencies with clear guidance on who is to receive final wage payments.

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 decedent’s surviving spouse or estate.

For more information or sample forms and instructions, please email

Employee ZIP Code Entries in PS HCM

When entering an employee’s address in the PS HCM system, please do not type the dash (-) that goes between the first five and last four digits. The system automatically populates the dash when printing the earning statement and W-2, along with any other items that include the employee’s address. By manually entering a dash, the system converts this to a space and then drops off the last digit of the final four, resulting in an incorrect ZIP code when documents are printed.

OMES Form PWC - Payroll Warrant Cancellation

The OMES Form PWC should only be used when an employee is not entitled, in part or whole, to the funds. All PWC forms OMES receives will initiate the process to retrieve the funds, if direct deposit, and cancel the warrant in the payroll system. It is imperative that agencies identify payroll errors and process the form immediately upon discovery.

Paper warrant cancellations: Email Form PWC to Scan the original warrant (marked void) and attach to the email. However, OMES will process the cancellation without the scanned copy if the email certifies the agency has the warrant and can provide it when circumstances allow. If physically sending the paper warrant and form, the original warrant must be marked “Void” and attached to the completed Form PWC and sent to OMES Transaction Processing. These requests cannot be processed by fax.

Direct deposit cancellations: Email Form PWC to The document must be password-protected and the password should be included in a separate email or sent via another secure method. To ensure direct deposit funds are returned, the PWC request must be received by noon three business days prior to the effective pay date. Any request for cancellation of direct deposits after that cutoff will be subject to recall or reversal procedures that are subject to denial by the employee’s bank. An employee must be notified in writing of a reversing entry and its reason no later than the effective date of the reversing entry. Please notify the employee no later than the day the OMES Form PWC is submitted for processing.

Your agency can modify the statement below and use it to inform your employee(s) of the pending reversal.

“A payroll item will be posted in error to your bank account on MM/DD/YY. A reversal has been issued and will post to your account to pull these funds back to the state. Please keep the full amount of this deposit in your account. If the state cannot retrieve the full amount of the deposit, action will be taken in accordance with applicable procedures to retrieve the funds from you."

Once the funds have been returned to the state, OMES will process a cancellation in the payroll system, which returns the funds to the agency. If the funds cannot be recovered from the bank, the agency is responsible for recovering the funds from the employee. Please refer to 74 O.S. § 840-2.19 D for proper procedures for recovering overpayments, if needed. The agency should submit OMES Form 94P for processing if the employee reimburses the funds through a miscellaneous payroll deduction or cash.

PWC forms received for direct deposit items that are more than five business days past the effective date will not be processed pursuant to NACHA rules. If agencies encounter erroneous entries more than five business days past the effective date, please contact OMES or OST for consultation on options for recovering the funds.

Compensation to Current and Former Employees, Including Settlements

All compensation to employees and former employees, no matter what form, constitutes wages unless specifically excluded by the Internal Revenue Code. This includes stipends, allowances, employee lawsuits and settlements, gifts, prizes, awards and fringe benefits, to name a few.

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.

Note: The Internal Revenue Service 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 need to 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.

Note: Attorney’s 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 The attorney will automatically receive a 1099-MISC reporting the amount in Box 14 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 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


Reconciliation for 78900 Class Funding

Class funding 78900 was set up during the higher ed payroll transition in late 2015. Specialized accounts were set up to allow for ease of balancing and tracking. Due to the restricted uses and the structure of the 789 class funding, reconciliations should be relatively simple and clean, as long as the institution is keeping current on their reconciliation. Detail instructions on how to reconcile the fund were provided during the transition. A link to the reconciliation tips is provided below.

Agencies that have not reconciled this fund should do so as soon as possible. Some institutions are experiencing cash shortages on their payroll tax deposits because the fund is not reconciled. One of the issues with the reconciliation is that institutions are not using the correct account numbers on 789 voucher payments. If payments have been processed with incorrect account codes, corrections should be made using a journal voucher.

If payments that should have been made from the 789 fund were processed from a different class funding, a journal voucher must be processed to keep the 789 fund reconciled. Agencies should have processes in place to ensure that the correct account is used and that the fund is reconciled monthly. Any balance remaining in the fund should be identifiable to a specific vendor.

Business Application Services - Financial News

Timely Submission of Payroll Tax Deposit Notification

Notifications to CAR for payroll tax deposit posting must be submitted to CAR by 10 a.m. to be processed for settlement the next day. Earlier submission is recommended. Items submitted at the last minute which do not post because of errors may not be able to be resolved in time to meet the defined timelines for release to OST. Institutions should provide at least two contacts with the submission.


1099 Corrections

All 1099 corrections for 2020 or for previous years must be submitted to OMES and we will report the corrections to the IRS. This includes payments reported on 1099NEC, 1099MISC, 1099INT, 1099DIV, 1099B and 1099G. If you should have any 1099s that are returned by the vendor requiring changes, please issue a Corrected 1099 to the vendor using the blank forms provided with the original 1099s or you may contact OMES to print them for you. Send copies of the incorrect 1099, the correct 1099 and any documentation to support the change to OMES. If you have any questions, please contact Alicia Reel at 405-522-9479 or or Beth Brox at 405-522-1099 or


PeopleSoft HCM Blackout Period

Just a reminder that there is a 9 p.m. to midnight blackout period for PeopleSoft HCM every night. During this time, users should not be logged into the system. Additionally, please do not submit any batch jobs that could run past 9 p.m. close to the blackout time.

Affordable Care Act (ACA) 1095-C Form Reminders

By this time agencies should have printed the forms from the file received from OMES. Employers are required to provide Form 1095-C to ACA full-time employees. Employees that had an ACA eligibility status other than Eligible are not required to be reported and will not have a form. The last agency on record at the end of 2020 will have received the 1095-C form for the employee with information for the entire year related to the employee’s status.

Please see the FAQs for more information and detailed instructions on correcting or creating a 1095-C form. Corrections for Form 1095-C must be submitted to OMES HCM by Feb. 26, 2021. Please send the original form, a copy of the corrected form and a memo explaining why the correction is needed. If a form was not created for an employee and should have been, the agency must manually create one, provide the employee a copy and submit a copy for inclusion on the IRS file.

For correcting a 1095-C after providing the original to the employee and before the file is submitted to the IRS, correct the form as needed and write, type or print CORRECTED somewhere on the new 1095-C furnished to the employee.

ONLY enter an X in the CORRECTED box after the file has been submitted to the IRS (this won’t be done until after the Feb. 26, 2021, correction deadline).

In addition to the form corrections, please ensure the data entered on the ACA Employee Eligibility (0674) page in the HCM system is correct. The data entered on this page is critical to correct reporting of an employee’s offer and periods of coverage.

For additional information or questions related to ACA reporting and to submit corrected or newly created forms, please contact LaCree Austin,, and Deanna Ferron,, or send by interagency mail to Will Rogers Building – OMES HCM, Attention: LaCree Austin/Deanna Ferron.

Any corrections needed after the deadline should still be sent to OMES for us to notify the IRS.


PFT Processing for Cancellations and Adjustments

As a reminder, when an MWC or EWC is submitted to cancel a payroll warrant, a corresponding PFT Reversal file must be submitted to remove the funds from the 789 class-funding and place the amount back in the originating class-funding. The amount in the PFT reversal file should be the gross-to-net amount and employer share of taxes and benefits that processed on the original warrant.

The PFT Reversal process is also used to process amounts in or out of the 789 fund based on business needs. This includes:

  • Processing taxes that were not processed through the normal 500Misc/PFT process but must be submitted through the ACES system.
  • Corrections necessary for overpayment refunds. 
  • Correction of items improperly reported or omitted from the original PFT submitted.

Additional information on processing PFT Reversal files can be found on the OMES website.

Last Modified on Aug 26, 2021