FOUNDATIONS IN UNIVERSITY FINANCE UNIVERSITY PAYROLL

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1 FOUNDATIONS IN UNIVERSITY FINANCE UNIVERSITY PAYROLL

2 University Payroll: Topic Outcomes Steve Miller Director of Payroll, Customer Service, and Training Financial Management Services Participant Outcomes Recognize your responsibility in the payroll process to protect the university s payroll funds Describe how standardized processes enable the accurate and timely payment of employees Identify when and whom to consult for expert payroll assistance INDIANA UNIVERSITY 1

3 Why Is Payroll Important? Employees Expect Us To Get It Right Payroll mistakes reduce productivity and decrease morale The Law Requires Us To Get It Right Payroll mistakes expose the university to penalties, interest & attorney fees IU Is a Huge Organization & It s Real Money The university is Indiana s 4 th largest employer, and at more than $1.87 billion in FY 2015, payroll & benefits account for nearly two-thirds of the university s annual operating expenses Mistakes inconvenience our employees, undermine our credibility, and expose the university to liability. INDIANA UNIVERSITY 2

4 University Payroll: Who Are We? Several areas within FMS comprise University Payroll: Stephen Miller, Director of Payroll, Customer Service & Training Sandy McElhinney, Payroll Operations Manager John Brumley, Payroll and Time Systems Manager FMS Customer Service: Andy Bruce Kelli Eberhard Lora Monix Michelle Parks FMS Training: Ellie Mason Vacant FMS Pay Clerks: Becki Campbell Deb Doub Lisa Hays Linda Morrow Kathy Sexton- Stephen Systems Analysts: April Thomas Kyle Trinkle Mike White INDIANA UNIVERSITY 3

5 University Payroll: What Do We Do? Ensure Accurate & Timely Payment of All Employees Manage Payroll Operations Process Deductions Taxes Benefits General Deductions Resolve payroll issues with departments/campuses Retro pays due to late edocs Overpayments due to late edocs or departmental error Coordinate work-study payroll processing in conjunction with Financial Aid Office INDIANA UNIVERSITY 4

6 University Payroll: What Do We Do? Ensure Accurate & Timely Payment of All Employees Manage Time and Payroll Systems Build the Payroll Calendar Update Tax Withholding Rates Create Timesheets & Vouchers Extract Information to Payroll Vouchers Generate Direct Deposit File, Pay Advices & Paychecks INDIANA UNIVERSITY 5

7 University Payroll: What Do We Do? Ensure Accurate & Timely Payment of All Employees Monitor Compliance Audit auto-approvals, missed punches, 24-hour clock outs Pre-payroll run: timesheets that didn t route to a voucher & regular hours in excess of 40 hours/week Post-payroll run: auto-approvals Develop policies & procedures in conjunction with other functional areas Academic HR University HR INDIANA UNIVERSITY 6

8 Payroll Responsibilities Employees (52,116) Accurate & timely timekeeping Review paystubs Report paycheck problems Time Approvers/Supervisors (6,244) Ensure employees worked the hours recorded Correct & approve timesheets & epto Payroll Processors (378) Review payroll vouchers Submit adjustment vouchers Ensure proper time codes are used according to policy Fiscal Officers (254) Process edocs in a timely manner Run IUIE reports to verify payroll accuracy INDIANA UNIVERSITY 7

9 Areas of Concern within Payroll Time Recording: 53% of biweekly (BW1) employees were recording hours worked two or more days after the end of each work day 9% of biweekly employees (BW1) were recording hours worked two or more days before the actual work day Auto-Approvals: 15% of total timesheets for temporary hourly employees were auto-approved 10% of timesheets that contain 24-hour clock outs were auto-approved 23% of missed clock punches reported were auto-approved Overpayments: 35% of timesheets tested containing 24-hour clock out logs resulted in overpayments INDIANA UNIVERSITY 8

10 Important Payroll Policies Control-Focused Policies FIN-PAY-IV-200: Segregation of Duties for Payroll Processing. Requires payroll processing staff not to be in a position to audit or verify payroll, or pick up paychecks. FIN-PAY-IV-270: Recording of Timekeeping in TIME. Requires supervisors & payroll processors to review & approve time records before the records are submitted for payment. FIN-PAY-IV-280: Payroll Overpayment Processing. Requires departments to attempt collection of all overpayments regardless of circumstance. INDIANA UNIVERSITY 9

11 Question #1 Payroll Review Dear Payroll Director: I am going on leave and would like to have the departmental payroll clerk review payroll reports in my absence. She is trained in payroll processing, so she is the most qualified to review these documents. Please have the fiscal approver s audit report sent to Patty Payclerk during my absence. Sincerely, Francine Fiscal Officer Use your clicker to submit your answer: A. No problem, Francine. What s Patty s ? 100% B. Sorry, Francine, but Patty can t both process & review payroll. 0% A. B. INDIANA UNIVERSITY 10

12 Question #2 Picking Up Paychecks Dear Payroll Director: I think it s ridiculous that the most highly paid people in the department should be responsible for picking up paychecks. I am simply too busy to pick up a paycheck for one of my employees. Please allow our departmental pay clerk, Paul Payclerk, to pick up our checks instead. Regards, Frank Fiscal Officer Use your clicker to submit your answer: A. I agree with you, Frank. Please feel free to send Paul over to pick up the checks. B. Sorry, Frank, but segregation of duties prohibits Paul from picking up checks he processes. 100% 0% A. B. INDIANA UNIVERSITY 11

13 Question #3 Auto-Approvals Dear Payroll Director: The timekeeping system will automatically approve my employees timesheets if I don t, so I don t understand why I need to approve them. Shouldn t I just let Kuali Time do the work so I can focus on more important tasks that aren t automated? Regards, Sarah Supervisor Use your clicker to submit your answer: A. You re right, Sarah. Letting Kuali Time handle the approvals is a great time saver. 100% B. Sorry, Sarah. As the supervisor, you must review and approve your employees hours to prevent under- or overpayments. 0% A. B. INDIANA UNIVERSITY 12

14 Question #4 Overpayment Dear Payroll Director: Our department just realized we paid a faculty member for a summer course that was canceled due to low class enrollment. The professor is world-renowned, and the extra money she received is only $5,000, which is well within our budget. Given the small amount involved, we would prefer not to inconvenience the professor by pursuing collection of the overpayment. Thank you for your understanding in this matter. Sincerely, Francine Fiscal Officer Use your clicker to submit your answer: 100% A. In cases like this, Francine, discretion is best. Don t bother trying to collect the overpayment. B. Sorry, Francine, but departments must attempt to collect all overpayments, regardless of circumstance. 0% A. B. INDIANA UNIVERSITY 13

15 Important Payroll Policies Compliance-Focused Policies FIN-PAY-IV-40: Distribution of Payroll Checks. Requires distribution of wages and salaries by the regularly-scheduled pay days. FIN-PAY-IV-250: Off-Cycle Payroll Payments. Requires payments that missed the on-cycle payroll to be paid on the next available off-cycle payroll. INDIANA UNIVERSITY 14

16 Question #5 Withholding Wages Dear Payroll Director: Our account manager would like to stop an employee s wages from being directly deposited until that employee turns in his laptop computer. Can you stop his payment? Sincerely, Sam Supervisor Use your clicker to submit your answer: A. No problem, Sam. Just let me know when you get the laptop back. B. Sorry, Sam, but state law doesn t allow us to withhold his wages. 100% 0% A. B. INDIANA UNIVERSITY 15

17 Question #6 Unapproved Overtime Dear Payroll Director: We received an from payroll informing us that Ed Employee worked over 40 hours and should have received overtime. We have informed Ed that he cannot work overtime, so we did not pay it. Please make a note of this in your records. Sincerely, Sally Supervisor Use your clicker to submit your answer: A. Sorry for the inconvenience, Sally. We ll note it in our records. B. Sorry, Sally, but you have to pay Ed overtime, even if it wasn t approved. 100% 0% A. B. INDIANA UNIVERSITY 16

18 Question #7 Pay Raise Timing Dear Payroll Director: Effective 12/19, an Academic Specialist transferred to another position within our department at a higher rate of pay. The December vouchers had to be balanced by 12/22. Due to the timing of this transfer, an adjustment voucher had to be prepared. I don t have the budget to pay the off-cycle fee for this transaction. I would like to tell the employee it will be included on her January 31 paycheck. Is this appropriate? Sincerely, Frank Fiscal Officer Use your clicker to submit your answer: 100% A. Sorry, Frank, but you ll have to pay her on the next off-cycle payroll. B. It might be, Frank, but only if she gives her permission to include it on the next on-cycle payroll. 0% A. B. INDIANA UNIVERSITY 17

19 Important Payroll Policies Employee-Focused Policies FIN-PAY-IV-1 (& 270): Time Reporting for Non-Exempt Employees. Requires non-exempt employees to accurately record their own time worked daily, at the end of the work day, in Kuali Time. FIN-PAY-IV-20: Direct Bank Depositing of Employee Wages. Requires employees to use direct deposit for payroll. INDIANA UNIVERSITY 18

20 Question #8 Recording Hours Dear Payroll Director: Our department records time asynchronously (manually). Recently, I ve noticed that some of our employees are filling out their hours in advance of working them, while others are recording their hours at the end of the pay period. The hours they re reporting are close to what I d expect from them, and I d really prefer not to rock the boat. Would it be a problem if we let this practice continue? Sincerely, Frank Fiscal Officer Use your clicker to submit your answer: A. Payroll is like horse shoes & hand grenades, Frank. As long as you re close, it s no problem. B. Sorry, Frank, but our employees have to accurately record their hours worked daily at the end of the work day. 100% 0% A. B. INDIANA UNIVERSITY 19

21 Question #9 Direct Deposit Dear Payroll Director: I recently received an from your department instructing me to sign up for direct deposit or a paycard would be issued to me. I spoke with someone in my department who assured me that I am not required to sign up for direct deposit because I am a work study employee. Sincerely, Will Work Study Use your clicker to submit your answer: A. You re right, Will. Work study employees don t have to use direct deposit or paycards. 100% B. Sorry, Will, but all employees, including those in work study, have to sign up for direct deposit, or they will be paid via paycard. 0% A. B. INDIANA UNIVERSITY 20

22 Takeaways What we hope you learned today: Each of us has some responsibility for payroll, regardless of role Controls are in place for a reason; standardized processes ensure accuracy We re here for you! Contact University Payroll with questions Payroll SOPs and other great resources can be found on the FMS website at fms.iu.edu. They re available 24/7! INDIANA UNIVERSITY 21

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