Policies, Procedures & Guide

Transcription

1 Policies, Procedures & Guide Managing Overpayments Policy Issue Number: 1 Originated by: Ratified by: SMT & JSPC Agreed by: Issue Date: January 2010 Review Date: HR Department Presented to SMT for approval HR Department February 2013 SMT February

2 Version Control Reference HR / OVERPAY / 09 NHS/LEW/HR/021/1.1 Date Approved January 2010 Approving Body JSPC Implementation Date January 2010 Version 1.1 Supersedes Overpayments Policy Consultation Supporting Procedure Staff side, Senior Management Team N/A Review Date February 2013 Lead Executive Author/Lead Manager Further Guidance HR Director HR Manager ACAS, CIPD, DOH, NHS Employers Implementation Target audience Implementation plan in place? Tools for dissemination All PCT Staff Yes & Intranet Date of dissemination December 2009 Monitoring Monitoring method Frequency Responsibility Reporting Audit Annual HR Department HR Department 2

3 Equalities Impact Assessment Screening Grid Note: See equalities impact assessment guidance notes on PCT website at before completion. Equality Group Race Disability Gender Age Sexual Orientation Religion or belief Deprivation Assessment of Impact Dignity and Human Rights 3

4 Contents 1. Introduction 5 2. Scope of policy Accountability & Responsibilities Overpayment and Recovery of Pay and Allowances: Existing employee,,,,,,,, Overpayment and Recovery of Pay and Allowances: Ex-employee Failure to agree repayment terms 8 7. Arrears or non-payment Reporting 8 9. Hardship scenarios Ledger Provision and write off Policy review 9 Appendix Flowchart for overpayments Appendix 1 Template letter to existing employees Appendix 2 Template letter to ex-employees Appendix3 4

5 PCT Managing Overpayments Policy 1. Introduction 1.1 The PCT is required to recover public money which has been paid out incorrectly, regardless of the reason. 1.2 The aim of this policy is to ensure that where a payroll discrepancy occurs through overpayment i.e salaries, allowances, incorrect expenses etc. the relevant stakeholders are made aware as soon as possible with the objective that the PCT recovers the overpayment within acceptable time limits. 1.3 If an overpayment is considered fraudulent then it will be investigated in accordance with the Local Counter Fraud Specialist (LCFS) procedures. 1.4 Whilst this procedure sets outs how recovery will operate, it allows for some flexibility in terms of the length of the recovery depending on the individual circumstances of the overpayment. 2. Scope of policy 2.1 The key stakeholders who need to be made aware and involved in any decisions regarding overpayment recovery are: Employee/ex-employee Line Manager HR Directorate Shared Services Business Unit Payroll (SSBU Payroll) Finance Directorate 3. Accountability & Responsibilities 3.1 The Director of Finance is required to authorise any write-off of overpayments of salaries, up to the value of 10,000. Losses over and above this amount will need to be authorised by the Trust Board. 3.2 Head of HR/Director of HR is responsible for ensuring that appropriate systems are in place for ensuring all staff that are subject to payroll discrepancies are dealt with in a fair and equitable manner and in accordance with current employment law and best practise. 5

6 3.3 SSBU Payroll are responsible for ensuring that once over-payments are highlighted they are communicated to the Finance Directorate, HR and the employee in a timely manner. (See overpayment flow chart appendix 1). 3.4 The Finance Directorate are responsible for reconciling all payroll discrepancies in the Trust ledger and monitor the overpayment of the collection of these amounts. The entry of items to the ledger is actioned by SSBU when they initiate a write-back of salary. 3.5 The HR Department are responsible for resolving payroll discrepancies by understanding and following this policy. (See attached overpayment flow chart Appendix 1) 3.6 Managers are responsible for reviewing all salaries and wages charged to their cost centre / department and query any unusual items or unexplained variances of pay with HR, SSBU Payroll and the Finance Directorate in a timely manner. Managers are required to submit any notification of changes that affect pay to the appropriate department for approval one week prior to payroll deadline (5 th of each month). If received later payroll discrepancies can occur The following are examples of notification of changes that will affect pay and must be sent directly to Finance for approval in a timely manner: Establishment Change Forms: Reductions in hours, commencing unpaid career break etc The following are notification forms that must be sent directly to HR in a timely manner: Leaver form: Including any amounts of outstanding payments should be stated on this form Maternity application form: Commencing maternity leave Return to work form: Following sickness Return to work following maternity leave form Return to work following career break form All the above HR forms can be found on the intranet. It is essential that these forms arrive in time to HR in order to be actioned by SSBU Payroll. It is the manager's responsibility to ensure that they are received by the above deadline. Where there is persistent delay in sending these forms through to HR resulting in overpayments, formal action may be taken against the manager concerned. Note that termination forms can be sent as soon as it is known that the employee is leaving; pay will be terminated only when the employee has left. 3.7 Local Counter Fraud Specialist (LCFS) are responsible for investigating all overpayments that may be considered fraudulent. 3.8 All employees have a responsibility to check their payslips and are expected to inform their line manager, HR or SSBU Payroll if they have been overpaid. If it is suspected that an employee was dishonest by not disclosing a payroll 6

7 discrepancies (i.e. knowing that they have been overpaid, falsifying expenses) disciplinary action may be taken and a referral to LCFS will also be made which could lead to criminal proceedings. 4. Overpayment and Recovery of Pay and Allowances: Existing employees 4.1 Where the overpayment relates to the most recent pay period, SSBU Payroll will inform the employee that full recovery will be made in the following pay period, within 5 working days of an overpayment being identified. SSBU Payroll will inform the member of staff and their line manager. 4.2 Where, the overpayment relates to a number of pay periods, SSBU Payroll will notify HR. HR will arrange a meeting with the manager and the employee to discuss appropriate re-payment terms. Re-payment periods should not normally exceed 6 months. 4.3 If the re-payment period can not be agreed within the above time period then HR will discuss the reason along with the possible way forward with the Finance Directorate. Overpayment and subsequent repayments will be addressed by the Director of Finance. 4.4 No repayment period will exceed 12 months without the prior approval of the Director of Finance in conjunction with the Director of HR or the nominated deputy. 4.5 HR will confirm the following details in writing to the employee within 5 working days of first notification (where a meeting is not required) or within 5 working days after the date of the meeting (where the overpayment is over more than one pay period): The amount of overpayment The cause of overpayment The period of overpayment The employee s correct net pay The agreed re-payment terms (See Appendix 2 for template letter) 4.6 A copy of this letter will be sent to Finance Directorate and the employee s line manager. 5. Overpayment and Recovery of Pay and Allowances: Ex-employee 5.1 If the employees contract ends or is terminated during a repayment period, the manager is responsible for notifying SSBU Payroll using the leaver form by stating any outstanding amounts that to be deducted from the final salary. 5.2 If money is still owed, the Finance Directorate will invoice the employee immediately. 7

8 5.1 Where the individual is no longer employed by the PCT and an overpayment has been identified, SSBU Payroll will notify the Finance Directorate and HR by sending a schedule detailing the amount payable, actual amounts paid and difference including the causes of the overpayment. HR will send a letter to the individual s home address, advising them of the following: The amount of overpayment The cause of overpayment The period of overpayment The employee s correct net pay That the individual will be invoiced for the full amount of the overpayment HR Directorate contact details to discuss the terms of repayment where necessary i.e. in cases of hardship (See Appendix 2 for template letter) 5.2 A copy of this letter will be sent to HR. 5.3 Once an invoice is issued, the NHS Shared Business Services will follow their standard process of debt collection unless instructed otherwise by the Finance Directorate. If Finance are advised of instalment terms being agreed, NHS Business Services will be advised accordingly and the repayment will be monitored. 6. Failure to Agree Repayment Terms Where there is a failure to agree appropriate repayment terms this will be referred to the Director of Finance to decide repayment terms, in full consideration of the circumstances in conjunction with the Director of HR or their nominated deputy. 7. Arrears or Non-payment The normal debt-recovery process will follow including, where necessary, referral to debt collectors and legal action. 8. Reporting Finance and SSBU will meet monthly to review balances on overpayments and advances to ensure timely action on payroll recoveries. 9. Hardship Scenarios It will be for the individual to demonstrate cases of hardship, with evidence, and these will be considered on an individual basis along with the following options for recovery: Agreement that the payment in full will be made in the final salary upon leaving notification. 8

9 10. Ledger Should circumstances change (eg promotion or increased hours) the agreement will be amended to increase the speed of recovery. If the staff member reduces hours, the recovery will continue at the initially agreed rate. Overpayments will be written back on the payroll to transfer to the balance sheet control account within 10 working days of it being identified. Where it is not possible for the overpayment to be transferred via payroll (due to spanning a financial close), Finance Directorate will be notified of the net overpayment (adjusted for tax and national insurance) within 10 working days of it being identified. A spreadsheet of all individual overpayments will be maintained by Finance to reconcile to the control account. 11. Provision and Write Off Debts can only be written off in accordance with the PCT s Standing Financial Instructions. Any write-offs require Director of Finance or Chief Executive approval (and Board approval for larger amounts) and must be reported to the PCT Audit Committee. 12. Policy Review This policy will be reviewed after 2 years or sooner where required. 9

10 Appendix 1 FOR EMPLOYEES REMAINING ON THE PAYROLL: Overpayment occurs and the SSBU Payroll notifies Finance and HR with the details of overpayment. If payroll discrepancy affects less than one months pay and is recoverable in next months pay then the Payroll Department will notify the employee and line manager If payroll discrepancy is not recoverable in next months pay, then HR will intervene. Employee agrees to repay the outstanding amount in next month pay / agreed period or via cheque. Case resolved payroll monitors collection and notifies Finance. HR will send a letter to the employee within 5 days of being notified of the overpayment detailing a proposed repayment plan. Employee fails to agree to the repayment plan and wants to discuss the issue further then HR will meet with the employee as soon as possible. The purpose of the meeting is to propose a new repayment plan. HR confirms outcome to employee within 5 days. HR submits hardship evidence Appendix and informs 1 Finance to decide on outcome and or requests approval of new repayment plan. Case resolved & Finance monitors collection 10

11 Appendix 2 Template letter to existing employee ADDRESS Dear XXXXXXXX Notification of Overpayment Further to our conversation on xx/xx/xx where I notified you that you had been overpaid, I am writing to confirm these details. (Amount of overpayment) (Period of Overpayment) (Reason for the overpayment) In line with your terms and conditions of employment, Lewisham PCT must recover the amount overpaid but does not wish to cause you any financial hardship. Consequently when you met with HR and your line manager on xx/xx/xx, we agreed that the PCT make deductions from your salary of X per month for the next XX months commencing from XX in order to recover this mount. OR In line with your terms and conditions of employment, Lewisham PCT must recover the amount overpaid. Since the overpayment occurred over one pay period, we will be recovering this amount from your next month s salary. Yours sincerely, HR Adviser cc Line Manager Finance Directorate 11

12 Appendix 3 Template letter to ex-employee ADDRESS Dear XXXXXXXX Notification of Overpayment I regret to inform you that you have been overpaid and, in line with your terms and conditions of employment, Lewisham PCT must recover the amount overpaid as soon as possible. (Amount of overpayment) (Period of Overpayment) (Reason for the overpayment) You will be sent an invoice for the amount of overpayment shortly. If you wish to discuss the repayment terms with someone you should contact [relevant HR officer] on XXXX, however, you should note that only genuine cases of hardship with evidence will be considered for delayed repayment of outstanding monies. NHS Shared Business Services, who issue invoices on behalf of the PCT, will follow their usual debt recovery process in respect of the invoice debt unless or until a payment arrangement is agreed with the PCT Yours sincerely, HR Adviser cc Finance Directorate (to initiate invoice) 12