CAR Newsletter - September 2023

Volume 34, Number 3 | Fiscal Year 2024 | Sept. 12, 2023

• 2023 1095-C and W-2 electronic option in Workday@OK
• Workday Deduction Recipients (aka PS Vendors/Suppliers)
• SoonerSave Contributions to Employee Accounts
• SoonerSave Contributions and Eligible Compensation
• Health Saving Account (HSA) Refund Audits – Payroll Processing
• Employee Overpayments and OMES Form 94P Submission
• Employee Overpayments Collected After Year End
• Reduction of Annual Leave Hours for Overpayments
• Outstanding Wages Beneficiary Designation Option
• Adjustments to Workday@OK Oklahoma Child Support Payments

HIGHER EDUCATION

• Higher Education Entity Use of State TIN

ACCOUNTING

• POs Created for FY 24 with TBD

AGENCY NEWS

• Changes to Reversal/Recall Process
• Large Transactions Notice
• Jennie Pratt's Retirement

TRAINING

• Statewide Finance Policy Training
• AGA Webinars
• Payroll Law

Agencies are encouraged to promote electronic only access to year-end forms. The following information is provided to distribute to employees.

To avoid waiting for your 2023 Form 1095-C or your 2023 W-2 to arrive by mail, you can opt to go paperless only. When you choose to go paperless only, you will receive an electronic copy of the documents that can be downloaded and printed earlier than if electing both paper and electronic. Once you select to receive an electronic only copy, you do not need to make the selection again in the future. A 1095-C user guide and a W-2 user guide have been created to assist you in opting out of receiving the documents by mail. Those who have elected to receive both electronic and paper copies for their year-end documents will have them mailed by the required deadlines. Electronic versions will also be available by the deadlines. W-2s are due to employees by Jan. 31, 2024. 1095-C forms vary in the due date and may be between Jan. 31 and April 1, 2024.

When a deduction recipient is needed on withholding orders:

• Open a new Workday@OK tab and search View Deduction Recipient.
• Type in all or part of the deduction recipient’s name, then hit the enter button on your keyboard (this may pull up several).
• Only view those that are formatted correctly with the Alternate Deduction Recipient Name field including the PS Supplier ID/Location/Address.
• Select one and review the full name and mailing address. Those formatted correctly will also have an External Entity ID. Continue until the one needed is found, then enter on the withholding order. If not found, try another variation of the name and search again. If you know the vendor ID, that too can be entered (all 10 digits).
• If the needed deduction recipient is not found, or the address found does not match the order, the Garnishment Vendor Payee Form will need to be completed and emailed to payee.update.request@omes.ok.gov with the subject as Garnishment Vendor.
• After the vendor is set up, please submit a Service Desk ticket and cc HRMSWorkdaySupport@omes.ok.gov for the deduction recipient to be added in Workday@OK.
• Once added in Workday@OK, the deduction recipient can be used on the withholding order.

Please do not make any changes to or create deduction recipients in Workday@OK as they are set up in a specific way to integrate with PeopleSoft Financials. The Alternate Deduction Recipient Name field includes the PS Supplier ID/Location/Address so agencies can easily identify the correct one to select. Any deduction recipients that do not have this information or have DO NOT USE or DNU are not to be used. Deduction recipients used in the PY to AP process must include additional information, correctly formatted, and be included in the integration logic to process to PS Financials.

Use of an invalid deduction recipient will cause no payment to the vendor/supplier but may cause the amount to be included in payment to an incorrect vendor/supplier, thereby delaying payment processing, potentially causing harm to the employee with additional interest due or penalties applied. Additionally, this may contribute to reconciliation issues in the 994-class fund.

Employee deferrals and employer contributions must be remitted to Oklahoma Public Employees Retirement System in a timely manner to ensure participant amounts are posted and transferred to the selected investment options within 10 business days of payday, end-of-payroll period or process date, whichever is later.

OMES processes payments for SoonerSave amounts on completed payrolls on a weekly basis. This payment schedule far exceeds the requirements set forth in the plan and IRS rules. On many occasions contributions are posted to employee accounts on or before the actual pay date. Occasionally, and due to the payroll processing schedule of agencies, payments may post after the actual pay date.

Please remind employees that payments not showing on a quarterly statement may be due to the later processing of payroll and will show in the next quarterly statement. Employees are also encouraged to use the SoonerSave website to review and receive up-to-date information on their account.

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. Therefore, payments under voluntary buyouts and reductions in force would be excluded from deferral consideration.

Only compensation from an agency that is attributable to services performed for the agency may be considered as earnings from which SoonerSave deferrals can be taken. This would include regular pay, overtime, shift differential and other similar payments based on employment. 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 800-733-9008 or 405-858-6781.

Agencies that have received HSA refund audits from OMES Employee Benefits should process the employee refunds as soon as possible but no later than on the last paycheck of this calendar year.

• For audits refunding 2023 HSA withholdings, processing the refund in the same calendar year will prevent the agency from having to complete a W-2C. If refunds are processed in calendar year 2024, agencies will be responsible for completing W-2Cs for those employees.

• For audits refunding prior year HSA withholdings (2022 or earlier), agencies are responsible for completing W-2Cs for those employees after the refund has been processed. Employees should receive their copies of the W-2C and Copy A will need to be sent to OMES Central Payroll.

Please contact Jean Hayes at 405-522-6300, jean.hayes@omes.ok.gov or payrollreporting@omes.ok.gov with any questions.

State agencies are encouraged to review and handle employee overpayments as soon as possible so the adjustment can be recorded in the quarter in which the overpayment occurred. Overpayments not reported to the retirement systems in a timely manner may result in less than a full recovery of funds for the agency and may cause employee retirement calculations to be incorrect. Overpayments may be due to incorrect hours paid, wage amounts or benefit allowance payments.

When submitting the Form 94P, please do not provide copies of personal checks or copies of the pay slip. The form allows the agency to enter the amount recovered. Additional backup data is not required. Please submit the form using the employee ID and do not use the employee's SSN.

If an agency has questions, needs assistance or would like the form reviewed prior to requesting the overpayment from the employee, please email payrollreporting@omes.ok.gov. The final form is to be submitted to us only after the agency has recovered the overpaid amount.

Employee overpayments collected in the next calendar year are to be repaid at the gross overpayment amount in accordance with Internal Revenue Service regulations. If an employee owes the agency, notify the employee that if the amount is not paid in full by Dec. 31, 2023, the amount due will increase to the gross amount.

In accordance with 74 O.S. § 840-2.19, the agency must send a notice to the employee within 10 days of identifying an overpayment. The employee then has 30 days to respond to this notification. Employees have several options for repaying overpaid payroll amounts:

• Reduction of annual leave (for the gross overpaid).
• Reduction of current gross salary (for the gross overpaid) in a lump sum or installments over a term not to exceed the term in which the overpayment(s) occurred.
• Lump-sum cash repayment.
• Miscellaneous payroll deduction (for the net overpaid) in a lump sum or installments over a term not to exceed the term in which the overpayment(s) occurred.
• Any combination of the above options.

With the calendar year end nearing, the collection of any outstanding overpayment is especially important and must be conveyed to employees who owe any monies back to the agency. When an overpayment is reimbursed in a subsequent year, IRS rules state the employee must reimburse at the gross amount because the funds were available for use in the prior year and, as such, they are taxable to that year. Additionally, federal and state wages and taxes cannot be reduced for prior years when repayments are made after the end of that calendar year.

For example, John Doe was overpaid in August by $1,000 regular wages. This was discovered in September, and the agency calculated what the correct payroll should have been. The net check difference is $743.50, the amount the employee owes the agency if making the reimbursement by personal check or miscellaneous deduction in the current year. If the employee does not reimburse the net amount by Dec. 31, 2023, the employee owes the agency the full $1,000 gross overpayment.

If the employee reimburses the entire gross amount after year end, the applicable W-2, corrected W-2, or W-2C will only reflect a change in the Social Security and Medicare wages and taxes. Since the employee received and had use of the funds during the year of overpayment, the amount is still taxable for federal and state purposes. The W-2 form will not correct federal or state taxable wages or income taxes. The employee may be entitled to either a deduction or credit on their current year Form 1040 and should be advised to speak to their tax accountant.

When an employee chooses to reimburse an overpayment 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 earnings adjustment is required.

Statute 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 family members after the death of the employee. It also provides 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 if there is no surviving spouse, to the decedent’s estate.

For more information or sample forms and instructions, please email: payrollreporting@omes.ok.gov.

Agencies must notify OMES Central Payroll by 5 p.m. Friday of any items that will affect the Oklahoma centralized child support payment to be made the following Monday. Items that could affect the amount to be paid include refunds to employees for amounts withheld in error and reversals of payroll warrants. If OMES Central Payroll is not notified and the centralized child support payment is processed, the agency will be responsible for contacting the Department of Human Services Child Support Division to attempt 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 agencies is critical in these situations.

Each Monday, OMES Central Payroll runs the OMES HCM process to report and make payment to the Oklahoma Child Support Services/Oklahoma Centralized Support Registry, Deduction Recipient ID 0000190715. 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 8/12/2023 and 8/18/2022 were processed to pay the child support withholdings on 8/21/2023. All payments going to OCSS must be set up to use Vendor ID 0000190715. Payments to Vendor ID 0000000830 for OCSS are no longer allowed and will not be processed for centralized payment if used in error. 

Agencies should not be making changes to, or creating, deduction recipients in Workday@OK. The names have logic behind them. The Deduction Recipient Name field is the name as set up in PeopleSoft Financials. The Alternate Deduction Recipient Name field includes the PS Supplier ID/Location/Address so agencies can easily identify the correct one to select. Any deduction recipients that don’t have this information or have DO NOT USE or DNU are not to be used. Deduction recipients used in the PY to AP process must include additional information, correctly formatted, and be included in the integration logic to process to PS Financials.

In PeopleSoft Financials, a journal entry is created to remove the funds from the agency’s 994.

Higher education entities should be using their own individual TIN when creating contracts with vendors and when they are applying for grants. There has been an increase recently with colleges or universities setting up third-party billing contracts using the State of Oklahoma TIN. This is creating issues for state agencies that receive payments from insurance companies. If a college or university uses the state TIN on their contract, the insurance companies appear to be updating their vendor records to reflect the third-party billing company causing state agency payments to be improperly routed through that third-party billing company associated with the college or university.

Higher education entities should review their contracts to ensure that they are using the correct TIN on those contracts.

Reminder: Agencies that have purchase orders established using TBD as the account number for FY 24 expenditures should update them with accurate information. This ensures that the available budget recognizes those encumbrances.

Effective immediately, there are changes on how OST will handle reversal of ACH transaction requests greater than four banking days after the payment effective date. When submitting requests for reversal of ACH/EFT transactions greater than four banking days after the settlement date, the request will have to be processed as a Recall. OST will require additional documentation to process the request as a recall. 

NACHA allows for reversal of transactions for the following reasons:

• Duplicate entry.
• Unintended receiver.
• Incorrect dollar amount.

The reversal request must be transmitted within four banking days following the settlement date of the erroneous entry.

NACHA Operating Rules require the originator to make a reasonable attempt to notify the receiver of the reason for the reversing entry no later than the settlement date of the reversing entry. 

If a request to reverse an ACH transaction exceeds four banking days following the settlement date, it will be processed as a recall. OST will provide the requesting agency a Reimbursement Agreement indemnification form that is to be signed by the agency CFO as well as require the agency to obtain from the receiver/beneficiary a written authorization for the State of Oklahoma to recall the erroneous payment from their bank account. The letter will need to include the date of the credit, the amount, and the last four digits of the account number. Once OST receives the beneficiary letter and indemnity agreement, a request will be submitted for recall to JP Morgan. In place of doing a recall, the beneficiary of the funds can contact their financial institution and have them return the funds by refusing the credit entry to their account.

This communication is to remind state agencies they should provide an advance notice to the state treasurer of all disbursements that could negatively impact state cash flow requirements. For notice purposes, daily total submissions for disbursement equal to or in excess of $50 million shall deem to have the potential to negatively impact state cash flow. Notice should be provided to treasuryservices@treasurer.ok.gov and Lisa.Murray@treasurer.ok.gov. While OST will do everything possible to handle all submissions, failure to provide timely notice may result in delayed payments. 

After 28 years of service to OMES Central Accounting and Reporting, Jennie Pratt is retiring. Many accounting and finance employees statewide have worked with Jennie over the years. We are sad to see her go but wish her a very happy retirement. If you would like to say goodbye to Jennie, there will be a retirement event on Sept. 28 from 2-4 p.m. at the Will Rogers Building in Conference Rm 214/216. For more information, email Stephanie Brown at stephanie.brown@omes.ok.gov.

Be on the lookout as the Office of Management and Enterprise Services will again offer the Statewide Financial Policy Training session for state agency finance, budget, procurement personnel, P-card holders and agency directors.

The training provides a broad overview of the state’s accounting, budgeting and procurement policies and is recommended for everyone in a management position within an agency as well as for all financial and budget staff whether they are new or a veteran state employee.

The class will provide six hours of continuing professional education credits for CPAs, CPOs or CGFM. Space is limited and reservations are required as this training will be in person this year.

More details, including registration information, will follow once the date and location have been confirmed.

Looking for convenient and affordable training? AGA webinars make earning CPE hours easy.

All webinars, unless denoted with a members-only icon, are open to anyone. They feature experts speaking on emergent issues to keep you in the loop on hot topics in auditing, ethics, governmental accounting, internal controls, performance and more.

AGA tentative dates (some virtual, some mixed in person and virtual):

• Sept. 20, 2023.
• Oct. 18, 2023.
• Nov. 15, 2023 – fall PDT.
• Jan. 24, 2024.
• Feb. 21, 2024.
• March 20, 2024.
• April 24, 2024 – spring PDT.
• May 22, 2024.

Check out their website for more information.

Live Online Seminars Presented by Fred Pryor Seminars

For more information, please visit their website.