Issuing Payments to Workers & Vendors

Collect and Date Stamp Timesheets & Invoices

Policy:

Timesheets are submitted to F/EA by consumers on a bi-weekly basis according to the payroll calendar schedule. All timesheets must be received by at the Fiscal/Employer Agent Office by <<4:00 PM on the Monday>> after the payroll period ends.

Timesheets are accepted via <<drop-off, mail, fax, and/or online>>. A separate timesheet must be completed for each employee.

Each timesheet must include the following:

Time in and time out for each day worked

Employer Signature

Employee Signature

Service Code for the Service performed by the workers

Procedure:

Faxed Timesheets

Consumers are encouraged to fax timesheets to the F/EA as stated in the timesheet instructions in the Start-Up Package
The timesheet fax number is <<XXX-XXX-XXXX>>
Timesheets faxed to the timesheet fax number go directly to the <<verifier system>>
- Timesheets faxed to the timesheet fax number are automatically date stamped by the system as they are picked up by the system
Timesheets are processed via the standard process

Mailed and Dropped Off Timesheets

Consumers can mail timesheets to F/EA or drop them off at the F/EA at <<insert address here>>.
Timesheets that are mailed to F/EA are opened and processed daily
Timesheets that are dropped off at the F/EA drop box by 3PM daily, are collected daily from the drop-off box and processed
Payroll Representative collects all dropped off or mailed timesheets each day at 3:15 PM
Payroll Representative takes timesheets to date stamp machine and date stamps the timesheet
<<Where do timesheets go for the next phase of processing?>>

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, document procedures and ensure independent internal verification.

Only F/EA Personnel are authorized to pick up timesheets and other Fiscal/Employer Agent paperwork the F/EA Drop-Off box.
All timesheets are date stamped immediately upon receipt.
<<Staff Title>> verifies that each scanned batch is accepted by the system.

Review Each Timesheet for Accuracy and Completeness

Policy:

Timesheets are verified for accuracy and completeness either manually or with software called <<Insert if you have software that supports timesheet validation>>. Each timesheet is reviewed to ensure the following fields are correctly completed:

Signatures by both the workers and employer are on the timesheet (Note: see section listed in procedure for specific policy if a participant/employer passes away during a payroll period in which a workers has worked)
Start and end dates of the payroll cycle
Time in and time out for each day worked
AM and PM completion for each day worked
Consumer Number
Employer signature
Employee signature
Total hours worked for each week

Any fields that are not correctly and accurately completed are either corrected by F/EA Payroll Department or are submitted to F/EA Customer Service Unit. Customer Service Unit contacts participant to correct timesheets as applicable.

Procedure:

Verify Timesheets for Accuracy and Completeness

The review of the timesheets for accuracy and completeness is performed by <<Staff Title>> and assigned staff.

<<Staff Title>> or assigned staff double clicks on Teleform icon on desktop
<<Insert process used to verify timesheet accuracy>>
Verify that the participant has completed all necessary paperwork prior to the timesheet being processed
<<Insert the process used to verify that all program requirements have been met>>
Verify that the participant number on the timesheet exists in the Payroll System and pull up the participant name associated with the participant number for verification

The participant’s name and number require verification.

6. Verify that the Employee ID number on the timesheet exists in the Payroll System and pull up the workers name associated with the Employee ID for verification

The workers’s name and number require verification.

7. If it doesn’t, <<Staff Title>> or assigned staff logs in to Payroll System and looks up the workers by the last name written on the timesheet

8. Verify that the workers has completed all necessary paperwork and met all requirements prior to the timesheet being processed

9. Verify that the Signature <<insert the program requirements for Signature verification.>>

10. Verify that the dates on the timesheet coincide with the payroll cycle

11. If the begin and end dates are not within 3 days of the pay cycle dates, go to step 10.

If the dates on the timesheet are for future dates, the timesheet should not be processed

12. Verify that the total hours worked each day match the difference between the in and out times on the timesheet.

<<Insert what to do if hours don't match>>

Verify that the total hours worked for the week match the sum of the daily totals for each week.

Identify the weekly totals that do not match the sum of daily totals for each week.
Update the weekly totals to match the sum of daily totals

13. For any timesheet verification errors that cannot be resolved, do the following:

Print image of timesheet (if verifying electronic timesheet)
Write <<the batch number>> on the timesheet and the problem with the timesheet
Give the timesheets with problems to <<Staff Title>>
Customer Service Unit will contact consumers as applicable
After verifying all timesheets in a batch, <<Staff Title>> or assigned staff will be assigned another batch to verify
Each Batch is saved as the verification is completed, the batch status will change to “Ready to be committed”
This completes the review of the timesheets for completeness and accuracy.

Commit Timesheets for Payment

Processing of the timesheets for payment is the responsibility of the Payroll Department staff only. Payroll staff are the only personnel authorized to perform the steps below.

For any batches with a status of “Ready to be committed” <<adjust process per software system below>>
Select “Commit"
A message displaying, “Do you want to commit the batch?” will display
Select “Yes”
The batch status will change to “Batch is Complete”
These batches will be picked up by Payroll System
Identify any batches that have a number greater than zero in the “Nonforms” column

Process to Sign Timesheet if a Consumer Passes Away in Payroll Period

Timesheets are required to be signed by a participant or representative. The procedure below outlines the process to execute the timesheet in the event the participant passes away during a payroll period in which a workers has worked. In no instance are Counselor staff authorized to sign a participant’s timesheet.

If the participant has a representative or legal guardian, the representative or legal guardian should sign the timesheet
If the participant does not have a representative, then a relative or caretaker who is not the workers is authorized to sign the timesheet
- The relative or caretaker must submit with the timesheet a letter stating the date that the participant passed away
- This date is compared to the last date worked on the timesheet and no time worked after the participant’s date of death are paid

3. If none of the above are available, the <<Staff Title>> or <<Staff Title>> will sign the timesheet.

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

All systems are password protected
- Only staff with direct responsibility for certain payroll duties have password access to systems’ functions
The <<>> system automatically compares the participant number written on a timesheet to participant numbers in the Payroll System
- This systematic process ensures that timesheets are not paid for consumers who have not successfully completed all F/EA Start-Up paperwork.
The <<>> system automatically validates mathematical calculations.
The <<>> system automatically identifies timesheets with future dates.
The <<>> system automatically identifies any timesheets missing workers or participant signatures.
Verification of timesheet accuracy and follow-up with consumers are segregated duties within F/EA.
- The Payroll Department is responsible for verifying timesheets for accuracy.
- The Customer Service Unit is responsible for contacting consumers to correct timesheets as applicable.
Any timesheets that are manually verified are initialed and dated by the <<Staff Title>> or assigned staff who manually checks them.
All timesheets are stored in <<>> for a minimum of 7 years per File Retention Policy.

Review Timesheet for Compliance with Budget and Program Rules

Policy:

Timesheets are checked for completion in accordance with Program rules. The process to verify timesheets in accordance with program rules occurs using <<F/EA’s Payroll System.>> <<Program rules will vary by program. Some sample program rules are here.>>

The Payroll system includes a database containing all budget data, including the participant name, budget number,budget start date, budget end date and approved hours/units for each service and workers/vendor. <<Include approved rate information?>> The database also contains all workers data.

This system is programmed to perform automated data validation. Each timesheet is checked against database data per program rules and any discrepancy is flagged for follow-up.

Timesheets are entered into this system either manually or via an import from the <<Optical Character Recognition>> system. Timesheets are verified in the payroll system <<Monday through Thursday >> of each payroll week.

Program Rules

<<List the program payment rules here. Below are some examples.>>

-A participant cannot receive service from more than one workers simultaneously

-A workers cannot provide service to more than one participant simultaneously

-Workers who get paid for transportation must show proof of a valid drivers' license

-Workers must pass a criminal background check before they can be paid for service

-A participant's budget must include an authorized service before a workers or vendor can be paid for providing that service

-A participant must have sufficient funds in the budget line item before a workers or vendor can be paid for the service

Procedure:

Import and Verify Timesheet Data

1. <<Staff Title>> <<insert process to import and verify timesheet data>>

<<this might be a combination of importing OCR timesheets and manually entering timesheet data>>

Manual Entry of Timesheets

<<For any timesheets that required manual verification from any non-forms or any timesheets with a typo in the workers’s Social Security Number, follow this process to manually enter the timesheets in to Payroll System.>>

Error and Discrepancy Resolution

<<Enter the process used to identify Program Rule errors and discrepancies and the process to resolve them, when possible>> <<Information on following up with consumers, counselors and families can be found in the chapter dedicated to that process>>

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

The Payroll system performs a second validation to ensure the participant number written on a timesheet is in Payroll System
- This systematic process ensures that timesheets are not paid for consumers who have not successfully completed all F/EA Start-Up paperwork.
The Payroll system automatically compares hours on a timesheet to the remaining balance in the participant’s budget
- Users are notified when the participant’s budget does not have a balance to cover hours on the timesheet
- The timesheet will not be paid unless the <<Staff Title>> directs the timesheet to be paid
The Payroll system automatically identifies timesheets with a workers that is not connected the participant listed on the timesheet
- This triggers the <<Staff Title>> to verify that the workers has completed all necessary paperwork and is approved to provide service to the participant
The Payroll System automatically verifies that a duplicate timesheet is not being paid.
- This ensures that workers are not paid twice for the same service even if they submit a timesheet twice for the same service.
Verification of timesheet accuracy and follow-up with consumers are segregated duties within F/EA
- The Payroll Department is responsible for verifying timesheets for accuracy.
- The Customer Service Unit is responsible for contacting consumers to correct timesheets as applicable.
All payroll systems are password protected.
- Only those F/EA staff with responsibility for certain payroll activities have passwords for applicable payroll systems.

Pay Worker in Accordance with Applicable Rate for Each Approved Service Code

Policy:

<<How rates are determined varies greatly by program. Insert the policy for rate determination here and the procedure for paying in accordance with rates below.>>

Most programs use one of the following models to determine payable rates:

-Rates are set by the service code. Each service code is associated with a rate and every workers is paid that rate when they perform the service.

-Rates are set by the participant, but cannot be higher than a certain maximum. Rate maximums exist for each service. The minimum is minimum wage.

-Rates are set by the participant, and there is not a maximum. The minimum is minimum wage.

-Rates are tiered and workers get paid based on experience or qualification.

-Workers qualify for the companionship exemption and are not required to be paid minimum wage.

In many cases, the workers agrees to the rate in the employment agreement. <<If that is the case, insert that the workers agrees to his/her rate in the employment agreement, when the employment agreement is executed and where it is stored.>>

Procedure:

<<Insert procedure for paying in accordance with rates. In most cases, the rates are pre-determined and are stored in the participant's budget on the line item for the individual workers.>>

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

Submit Payments to Workers

Policy:

F/EA pays workers, withholds and calculates applicable workers and employer taxes and files and deposits taxes with applicable government agencies.
F/EA ensures that all workers have been properly paid by performing a weekly reconciliation of the payroll edit register.
F/EA pays workers and vendors via one of two methods: by paper check mailed to the <<workers or vendor>> or by direct deposit into the workers or vendor's authorized bank account.
Each check includes the F/EA Chief Financial Officer’s (CFO) signature on the check. The Chief Financial Officer is one of two signatories on the program bank account, with the <<Staff Title>>. The F/EA maintains the CFO signature block image in a password protected, secured location within the F/EA's check writing software. Only authorized F/EA staff have access to the signature block image.
A remittance advice is submitted with every payment. If the workers or vendor is paid by paper check, the remittance advice is included in the envelope with the paper check. If the workers or vendor is paid by direct deposit, the remittance advice is <<mailed or emailed>> to the workers or vendor separately. Each remittance advice includes the following information:

Consumer who received services
Gross wages this pay period
Gross wages year-to-date
Net wages this pay period
Net wages year-to-date
Federal income tax withheld this pay period
Federal income tax withheld year-to-date
Social Security tax withheld this pay period
Social Security tax withheld year-to-date
Medicare tax withheld this pay period
Medicare tax withheld year-to-date
Earned Income Credit this pay period
Earned Income Credit year-to-date
Other deductions (itemized) this pay period
Other deductions (itemized) year-to-date

Procedure:

<<Insert Process to do the following>>

-Print checks with the applicable check date

-Get signature on checks

-Print remittance advices with checks

-Verify addresses on checks/envelopes

-Stuff checks/remittance advices in envelopes

-Mail checks with postage date on or before published pay day

-Create electronic funds bank file for direct deposits

-Upload electronic funds file to F/EA bank

-Manage "pre-notes" as needed

-Get confirmation that direct deposits have been accepted

-Mail/email remittance advices for direct deposits

-Store check information

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

<<Insert internal controls depending on process>>
F/EA Payroll Department reconciles payroll account to ensure that accurate payments are debited from the account
Chief Financial Officer is one of two signatories on the program bank account (with Executive Director)
- F/EA maintains Chief Financial Officer signature block for checks in a password protected, secure location
- Only authorized staff have access to Chief Financial Officer signature block
On a quarterly basis Quality Assurance Coordinator contacts a random sample of 25 workers/vendors to inquire if they regularly received a remittance advice with their payments
- F/EA Quality Assurance Coordinator completes a findings control document and submits to <<Staff Title>> for review and signature
- Corrective action plan developed and implemented based on findings

Budget & Utilization Research

Policy:

Budget and utilization research is performed when a participant’s budget balance is zero before the end of the approval period. This could be the result of the participant over-utilizing authorized units or there could be an error in the budget. This research is performed to identify the problem, communicate it to the participant and counselor as applicable, and resolve any issues or discrepancies.

This process is performed by the <<Staff Title>> at the end of each weekly pay cycle. Upon processing payroll using the Payroll System, an error may display stating that insufficient <<hours, units, dollars>> are remaining in the participant’s budget balance to cover the timesheet. These timesheets are preliminarily researched during processing and a <<Research form>> is completed for them. <<At the end of the pay cycle, the <<Staff Title>> collects the Research forms and performs the below process to research them.>>

Procedure:

<<Staff Title>> collects all Research forms at the end of each pay cycle
- Research forms are stored in the Timesheets for Research folder in the Payroll Department
Select the first Research form in the folder
<<Staff Title>> requests Billing History report for the participant from Billing Department
Verify that the research was not already performed and the timesheet paid
- Go to <<File Path>>
- Within this folder, a folder exists for each participant for whom research has been performed in the past
- Search for a folder named for the participant

If you locate a folder named for participant, review the research spreadsheet within the folder and perform the following steps
Compare the research to the “Needs Research” sheet and complete any missing information on the “Needs Research” sheet
Verify that the research was completed accurately by double checking the calculations and data
Print the research page for the participant
Attach the research page to the back of the timesheet that could not be paid for insufficient hours
<<Insert process to research a participant's budget utilization>>
<<The point of this process is to ensure that the participant actually has spent all of his/her budget and his/her timesheet should not be paid.>>

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

All systems are password protected
1. Only staff with direct responsibility for certain payroll duties have password access to systems
Programmed system controls track participant spending and prevent payment of a timesheet if the budget balance will be less than zero following payment
Payment data that facilitates research is maintained in F/EA payroll systems for 7 years per File Retention Policy
A control document of payroll payment research is maintained
Staff preparing the research document sign and date the control document
The control document and all supporting documents are maintained for a minimum of 7 years per File Retention Policy
All communication with the participant is logged and maintained for a minimum of 7 years per File Retention Policy
Staff who communicate with consumers regarding utilization are separate from staff who perform utilization research

Adjust Payments Issued in Error

Policy:

F/EA strives to issue all payments correctly when they are initially issued. However, in some rare cases, checks may be issued in error. Some possible errors include:

Worker or vendor is paid for a different number of hours or units of service than were actually provided.
The incorrect amount of tax is withheld from an workers paycheck.
The check is issued to the incorrect payee.

Immediately upon identifying an error in payment, the error is researched by appropriate staff and corrective action is taken. Corrective action may include:

Issuing a supplemental check or direct deposit to correct an underpayment.
Voiding a payment.
Voiding and re-issuing a payment.

Procedure:

<<Insert procedure based on F/EA's operations>>

Internal Controls:

<<Insert internal controls based on F/EA's operations>>

Issue Stop Payments and Replacement Checks for Checks Reported Lost or Stolen

Policy:

If a check is reported to F/EA Customer Service as lost or stolen, F/EA stops payment on the original check and issues a replacement check within 5 days of receiving <<written notification>> from the participant.

Procedure:

Customer Service Receives Notification

F/EA’s Customer Service Unit first receives notification from the participant or representative that a check has been lost or stolen. Customer Service verifies the check mailing address and that the check was sent. Customer Service updates the participant address as applicable. <<Customer Service requests that participant submits to F/EA a stop payment request in writing.>>

When Customer Service receives a call that a check should be reissued, the <<Staff Title>> must first ask the caller to identify himself or herself.
<<The <<Staff Title>> must verify that the caller is the participant or representative>>
If it is, continue to step 5
<< If the caller is not the participant or representative, <<Staff Title>> informs the caller to ask the participant or representative to contact F/EA>>
<<Staff Title>> verifies in the payroll system whether the check in question was paid
<<Insert process to check this in payroll system>>
<<Staff Title>> verifies check delivery address
<<Insert process to check mailing address in system>>
Notify the caller of the check number that was originally issued
<<Request from the participant a “Stop Payment” letter containing the following information:
- Consumer and Worker Name
- Payroll period paid on the check
- Check number
- Explanation of why a replacement check is required
- Consumer or representative’s signature>>

11. Remind the caller that if they do receive the original check, they must contact F/EA to inquire if it can be cashed prior to cashing it

12. Log description of call in Customer Service tab of Payroll System

13. Use code to denote the type of call being logged

14. Open the Stop Payment Requests Form at <<File Path>>

15. Complete the form including the following information on the Stop Payment Request Form:

Caller’s name
Date of Call
Consumer Number
Consumer Name
Worker Name
Consumer/Representative Phone Number
Payroll Period
Check number
<<Staff Title>> name
Reason for Stop Payment
A note that the address was verified
A note that if the address was incorrect, the correct address is now in the payroll system

16. Attach copy of check stub to Stop Payment Request Form

17. <<Keep this package of documents until the written request for stop payment is received from the participant or representative>>

18. <<Staff Title>> stores the request in “Stop Payment Requests” folder

19. <<Once the written request for stop payment is received, log that it has been received in the Consumer’s Customer Service tab in Payroll System>>

20. <<Attach written request for stop payment to copies of check stub and P/R Delivery Address page and Stop Payment Request Form>>

21. Provide entire package to <<Staff Title>> to issue stop payment and replacement check

Payroll Department Process Stop Payment and Replacement Check

F/EA’s Payroll Department receives a package of Stop Payment documents from the Customer Service Unit after <<the participant has issued a written request,>> the delivery address has been verified and Customer Service has verified that a check was actually mailed. After receiving applicable documents, <<Staff Title>> verifies with the bank that the original check has not yet been cashed. If it has not, a stop payment and a replacement check are issued.

<<Staff Title>> or designated officer verifies with the bank online if the check was cashed (See Processing Online Stop Payment below)
If the check was not cashed, process a stop payment requisition with the bank using the online process (See Processing Online Stop Payment below)
Print a copy of the online transaction
<<Staff Title>> or designated officer must sign and date check print out information (in stop payment package received from Customer Service)
- Attach a copy of the online transaction to this stop payment package
<<Staff Title>> or <<Staff Title>> completes a A/P Check Requisition including:<<update this process per the process actually used by the F/EA>>
- In Vendor Name, complete with workers Name and Address
- In Description, enter “Reference: Consumer Name and Number”
- In Description, enter the reason a manual check is requested
- Specify the account number to be affected
- Specify the amount for which the check should be paid
- Check boxes in the lower right corner can be completed to denote where to mail the check
- Complete the “Date Submitted”
- Complete the “Submitted By”
- The requisition is always submitted by <<Staff Title>> or F/EA CFO

The person listed in “Submitted By” must sign the form
<<Staff Title>> scans signed check print out information and A/P Check Requisition form
- <<Staff Title>> or Lead <<Staff Title>> attaches scanned image of signed check print out information and e-mails to F/EA Accounts Payable Department with a subject “Check Requisition”
- Upon receipt of this requisition, F/EA Accounts Payable Department issues a replacement check dated the day of the authorized request
- After printing the check, F/EA Accounts Payable Department submits an image of check to F/EA Payroll Department
<<Staff Title>> or <<Staff Title>> attaches all documents after verifying that all data is correct
Record voided check information in Void and Reissue log
- Open Void and Reissue log spreadsheet found here: <<File Path>>
- Enter the following information in the Void and Reissue log. Information is found on the documents developed as part of the stop payment process

Consumer name
Worker/vendor name
Check number for stop payment
Check amount
Date participant or representative reported the missing check
Reason for stop payment
Date stop payment was made with the bank
Payroll staff member’s signature on check print out (payroll staff who authorized the stop payment)
F/EA staff name who received call from participant or representative of missing check
Name of caller
Confirmation of check delivery address
FI explanation of issue (why original check was not received by participant)
Replacement check number
Replacement check date
Initials of payroll staff monitoring this transaction

After recording this information, place participant’s stop payment package of documents in the “Void and Reissue” binder for storage

Issue a Stop Payment Online

The <<Staff Title>> or designated officer can issue a stop payment with F/EA’s bank online. Only the <<Staff Title>> and designated officers have log in and password access to the online bank site.

<<Staff Title>> or designated officer goes to bank website: <<insert bank website>>
Enter Company ID: (This will be assigned as needed)
Enter Company password: (This will be assigned as needed)
Enter User ID: (This will be assigned as needed)
Enter User password : ( This will be assigned as needed)
Select “Submit”
Verify if check was cashed
Go to “Balance Reporting” on menu
Select “Account Summary”
Select <<insert bank account name>>
In “From” date, enter the check date
In “To” date, enter today’s date
Select “Submit”
Sort report by field by which you wish to search
Attempt to identify check in question
If check cannot be found, the check has not been cashed. Go to Step 18.
If check is found, the check has been cashed

Obtain the Check Stub print out
Write on print out that check was cashed and the date check was cashed
If check was cashed in a prior month, obtain check image in bank statement from F/EA Accountant
Provide this information to Customer Service
Customer Service will contact the participant

18. Select “Account Services”

19. Select “Stop Payment”

20. Select “Add Stop Payment”

21. Select “Account Number”

22. Select “Reason for stop Payment”

23. Enter Check Number; Check Amount; Issue date and Payee.

24. Select “Add”

25. Verify the accuracy of the data.

26. Select “Process”

27. The screen will change to confirm.

28. Print Confirmation page

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

All systems are password protected
- Only staff with direct responsibility for certain payroll duties have password access to systems
Customer Service Unit verifies mailing address with participant or representative to ensure that F/EA is mailing to the appropriate address
<<F/EA requires stop payment request in writing>>
Only the <<Staff Title>> or designated officer is authorized to issue stop payments with the bank
- Only these individuals have bank log in information to authorize stop payments
<<Staff Title>> or designated officer review and sign stop payment package prior to providing to Lead <<Staff Title>>
Lead <<Staff Title>> verifies that <<Staff Title>> or designated officer has signed stop payment package prior to faxing request for replacement check to reporting agent
An A/P Check Requisition form is completed, dated and signed by <<Staff Title>>
- <<Staff Title>> reviews A/P Check Requisition form and supporting documents
- <<Staff Title>> signs A/P Check Requisition form prior to submitting to F/EA Accounts Payable Department
- F/EA Accounts Payable Department will not re-issue a check without <<Staff Title>> signature on A/P Check Requisition form
After reissuing a check, the F/EA Accounts Payable Department submits an image of the check to Payroll Department
- Payroll Department uses this image as proof that the check was printed and issued to the workers
All voided checks are recorded in a log, including information on F/EA staff who authorized the stop payment and reissue

Monthly and Quarterly Reconciliation of Payroll Payments

Policy:

<<This process is contingent on the F/EA's payroll and accounting processes>>

Procedure:

Monthly Reconciliation of Payroll Payments

At end of each month, <<Staff Title>>, or assigned staff, obtain the monthly Payroll Journal Summary from the payroll system
The report includes the following:
- Payments for <<X program>> Consumers
- Payments for <<Y program>> Consumers
- Adjustments for <<X program> Consumers
- Adjustments for <<Y program>> Consumers
- Adjustments for Transfers
This report must be matched to the weekly reconciliations
- Open spreadsheet called
- Create a new tab in the spreadsheet and name it “Month End”
A tab exists in the spreadsheet for each payroll week
- These tabs include summary amounts for each day payroll was cut for the payroll week as well as weekly sums
- Copy the weekly summary amount to the month end tab
- Do this for each week in the month
<<Staff Title>> creates a spreadsheet and merges every expense report for the month
Using the monthly Payroll Journal Summary from the payroll department enter the following values separated by program, transfers and adjustments
- Day Hrs
- Day wages
- OT hours
- OT wages
- Holiday hours
- Holiday wages
- Other hours
- Oth wages
- Night hours
- Night wages
- Total hours
- Total wages
- Federal Income Tax Withheld
- State Income Tax Withheld
- Employee Social Security
- Employee Medicare
- EIC
- Misc Deductions
- Net
- Employer Social Security
- Employer Medicare
- Employer FUTA
- Employer SUI
- Total Liab
- Workers' Compensation
In column S, insert calculations that sum each of the rows listed above for each program
In column T, the difference between the payroll system month end report and the sum of weekly payroll amounts is shown
- Research and resolve any discrepancies
Journal Entries and Posting to General Ledger is performed using Policy and Procedure <<insert link>>

Quarterly Reconciliation of Payroll Payments

At end of each quarter, <<Staff Title>>, or assigned staff, obtain the quarterly Payroll Journal Summary from the payroll system
The report includes the following:
- Payments for <<X program>> Consumers
- Payments for <<Y program>>Consumers
- Adjustments for <<X program>> Consumers
- Adjustments for <<Y program>> Consumers
- Adjustments for Transfers
This report must be matched to the sum of the monthly reconciliations in the quarter
- <<Staff Title>> opens spreadsheet called Quarterly Reconciliations YYYY from <<File Path>>
On the first tab (Jan-Dec YYYY), a summary of each quarter exists
- The quarterly values are automatically pulled from the reconciled monthly values called Month YYYY at <<File Path>>
- The summary contains data for each program
Open the tab on the spreadsheet called “TRANS X Qtr”
- This tab shows all transfer amounts in and out of the F/EA by hours, dollars and tax
- Enter the transfer amount from the tab called “TRANS X Qtr” to the Transfer column on the Jan-Dec YYYY tab
Enter the data from the quarterly Payroll Journal Summary Report
Insert calculations to compare the quarterly Payroll Journal Summary Report from the payroll system to the calculations on the summary tab called (Jan-Dec YYYY)
The amounts on the quarterly Payroll Journal Summary Report should match the quarter sums on the summary tab of the spreadsheet called (Jan-Dec YYYY)
Any discrepancies must be researched and resolved
A note is made in the green box at the bottom of the spreadsheet to outline any discrepancies and how they are resolved
After resolving any discrepancies, print Quarterly Reconciliation document for the quarter
Print the Transfers tab for the quarter
Attach the quarterly Payroll Journal Summary report for the quarter
Attach any supporting documents showing resolution of discrepancies
<<Staff Title>> reviews reconciliation and supporting documents
<<Staff Title>> signs and dates on the Prepared By: line
<<Staff Title>> reviews reconciliation and supporting documents
<<Staff Title>> signs and dates on the Approved By line
Scan signed reconciliation and supporting documents to <<File Path>>

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

Reconciliations are performed monthly using weekly reconciled data
A control document is used to perform monthly reconciliation
- <<Staff Title>> and <<Staff Title>> review monthly reconciliation
- <<Staff Title>> and <<Staff Title>> sign and date monthly reconciliation
Monthly reconciliation control document is scanned and stored for a minimum of 7 years per File Retention Policy
A quarterly reconciliation is performed using aggregated monthly data
A control document is used to perform quarterly reconciliation
- <<Staff Title>> and <<Staff Title>> review quarterly reconciliation
- <<Staff Title>> and <<Staff Title>> sign and date quarterly reconciliation
Quarterly reconciliation control document is scanned and stored for a minimum of 7 years per File Retention Policy

Post Payroll Journal Entries to General Ledger

Policy:

On a weekly basis, Payroll Department produces journal entries for payroll expenses and liabilities. Payroll Department provides journal entries and supporting documents to F/EA Accountant. At month end, F/EA Accountant reviews each journal entry and supporting documents. The journal entry template is stored in: <<File Path>>. F/EA Accountant posts payroll expenses and liabilities to the General Ledger. The F/EA Accountant signs and dates each journal entry and <<Staff Title>> authorizes by signing each journal entry. All journal entries are saved here: <<File Path>>

Procedure:

Post Payroll Tax Liability to General Ledger

Performed Monthly

On monthly basis, <<Staff Title>> produces Payroll Journal Summary report.
F/EA Accountant or assigned staff reviews journal entry and supporting documents for completeness and mathematical accuracy.
F/EA Accountant posts the Tax liability to the following General Ledger accounts.
- Account # <<>> Employee Federal Income Tax withheld
- Account # <<>> Employee and Employer FICA Tax
- Account # <<>> Employee State Income Tax withheld
- Account # <<>> Accrued State Unemployment Taxes
- Account # <<>> Accrued Federal Unemployment Taxes

4. All journal entry templates are scanned and saved here: <<File Path>>

5. All journal entry templates are stored for a minimum of 7 years per File Retention Policy

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

<<Staff Title>> produces journal summary report from reconciled data
<<Staff Title>> signs and dates journal summary report
F/EA Accountant reviews and verifies data prior to posting entries to General Ledger
F/EA Accountant signs and dates journal entry after posting to General Ledger
The <<Staff Title>> authorizes the entries by signing and dating the payroll journal entries.
All reconciliation templates are pre-numbered
All signed and dated journal entry templates are stored for a minimum of 7 years per File Retention Policy

Pay Workers in Accordance with Overtime, Wage, Hour and Pay Day Rules

Policy:

Consumers' employees must be paid in accordance with applicable state and federal overtime and wage and hour rules and regulations and in accordance with state pay day rules.

Consumers' employees must be paid the prevailing minimum wage per hour, whether that be the state or federal minimum wage*. Consumers' employees also must be paid at least an hourly rate of time and a half the workers's regular hourly rate of pay for any hours worked over 40*.

Consumers' employees also must be paid per state pay day rule. A pay day rule states within how many days an workers who submits a satisfactory timesheet must be paid by his/her workers. Consumers' employees are paid within applicable state pay day rules.

*This policy does not apply if the workers is working as a "companion" for the participant. "Companions" may qualify to be exempted from Federal minimum wage and overtime rules per the Fair Labor Standards Act's Companionship Exemption. The companionship exemption may not be taken if a FLSA joint third party employer relationship exists--i.e., the state and/or the F/EA is considered a joint employer by the US Department of Labor.

Procedure:

<<Insert information on how the F/EA complies with this policy.>>

Internal Controls:

<<Insert internal controls. Some suggested internal controls are listed below.>>

F/EA's payroll system automatically calculates when a workers submits a timesheet with more than 40 hours per week on it. The payroll system automatically flags the timesheet as eligible for overtime.
F/EA's payroll system includes a system control that prevents any hourly pay rate to be paid if the rate is less than <<$X>>, the minimum wage.
<<Staff Title>> reviews all unpaid timesheets on a weekly basis to ensure that all timesheets are paid per the state pay day rule, which requires employees to be paid within <<X>> days of submitting a satisfactory timesheet.

Process Payments for Goods & Services Vendors

Policy:

F/EA processes vendor payments on a bi-weekly basis when completed, valid payment request forms (PRFs) are received.

The payment request forms are distributed to all consumers when they join the program, in the Goods & Services Vendor Enrollment Package. Consumers or vendors can request PRF’s by calling F/EA’s toll-free customer service line or the form can be accessed online.

The PRF allows the participant to inform F/EA of what vendor is to be paid, in what amount and from what line in the participant’s budget to use allocated funds.

Procedure:

Payment Request Forms are distributed to all consumers in the program in their initial Goods & Services Vendor Enrollment Packages
Consumers can print out more PRF’s from the F/EA website
Consumers can call F/EA toll free line to request more forms by mail
On at least a quarterly basis, F/EA should conduct a mail merge, sending out fresh, blank PRF’s to consumers
Once consumers receive notice from their counselor that their budget has been approved, they may begin to spend the funds from it (both on workers services and non-workers goods and services)
Consumers will complete a PRF for each non-workers good or service for which they wish to use their budget funds
Even if the good or service will be regularly purchased on the participant’s behalf, a valid PRF for each pay period must be submitted for each payment to be made
It is mandatory that each PRF be accompanied with a valid invoice for the good or service being purchased
Consumers can fax or mail the PRF’s to the number or address on the form
The payment schedule has a due date by which the PRF will need to be received in order for a check to be cut in that pay-cycle.
If the PRF is received after the cut-off date that is specified on the payment schedule then it will be paid in the following check run
Each pay period, appropriate staff alphabetize each PRF by the participant’s last name and then by vendor
All PRF’s are date stamped as they are received
Alphabetized, date stamped, accurately completed PRF’s with a valid invoice attached are placed in a “to-be-paid” folder
The invoice is stapled behind the PRF
If the PRF is not filled out completely or there is not an invoice attached, the PRF is placed in a separate folder
The F/EA Customer Service team will follow up on all incomplete PRFs with the goal of resolving any issues so that payments can be made in the current check run
Any unresolved issues will be processed in a future check run, after requirements have been met
If applicable vendors are not already in the payment processing system, they must be added
After entering the vendor into the system, the vendor ID is written on the form
In the invoice processing location of the accounting system:
Create a new line item for each PRF by filling in the participant field, vendor field, service code field and the payment amount
There may be two errors that occur while following the above steps:
The service code is not in the participant’s budget; or
Sufficient funds do not exist in the budget line item to cover the invoice
For any consumers with issues on their PRF, F/EA staff report the issue to the participant’s counselor
The counselor and participant determine whether and how to adjust the budget to make the payment
Any PRFs that cannot be processed are placed in a file folder of PRFs with issues
On the check run date, checks are cut and mailed to each vendor for which PRF’s were processed
Consumers and their counselors receive spending reports on a monthly basis, so that they can see what they have spent and what they have left to spend out of their budgets.

Internal Controls:

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

<<Insert internal controls depending on process>>
F/EA Payroll Department reconciles payroll account to ensure that accurate payments are debited from the account
Chief Financial Officer is one of two signatories on the program bank account
- F/EA maintains Chief Financial Officer signature block for checks in a password protected, secure location
- Only authorized staff have access to Chief Financial Officer signature block
On a quarterly basis Quality Assurance Coordinator contacts a random sample of 25 workers/vendors to inquire if they regularly received a remittance advice with their payments
- F/EA Quality Assurance Coordinator completes a findings control document and submits to <<Staff Title>> for review and signature
- Corrective action plan developed and implemented based on findings

Withhold Taxes from Employee Pay and Calculate Employer's Taxes

Policy:

When the F/EA pays consumers' employees, certain taxes are withheld from each employee's paycheck.

For those employees who are not FICA exempt (see Collecting, Recording and Processing Information for Family Employer and Employee Tax Exemptions), Social Security and Medicare taxes are withheld from employee pay up to the Social Security Contribution and Benefit Base. Social Security Tax is withheld from employee gross wages at a rate of 6.2%. Medicare Tax is withheld from employee gross wages at a rate of 1.45%. The combination of Social Security Tax and Medicare Tax is called "FICA", so the total FICA amount withheld from an employee's paycheck is 7.65%.

The employer also owes FICA taxes on employee wages. For Social Security and Medicare taxable wages paid to an employee,, the employee's employer owes 7.65% of the wages. The employer and the employee share of FICA are both deposited to the IRS by the employer (see IRS Form 941: Employer's Quarterly Federal Tax Return and Payments).

Federal Income Tax should be withheld from employee pay. The amount withheld will depend on what the employee has recorded on their IRS Form W-4 and what the employee's tax rate is, based on their income bracket (see page 39 of Publication 15, Circular E).

In most states, State Income Tax must be withheld from employee pay. The rate of state income tax withheld depends on state requirements.

State Unemployment Tax is required in all states and usually paid in whole by the employer. State Unemployment Tax exemption and liability rules usually mirror FUTA rules, but this varies by state. In some states, employees may be responsible for a portion of State Unemployment Tax or disability insurance tax. In those states, the employee tax should be withheld from employee pay per state rules.

For those employees who are not exempt from Federal Unemployment Tax (FUTA) (see Collecting, Recording and Processing Information for Family Employer and Employee Tax Exemptions) AND whose employers are liable for FUTA tax*, the employer FUTA tax must be calculated and eventually paid on gross wages paid to an employee up to the FUTA Taxable Wage base. If State Unemployment Tax is paid timely and in full by the employer, then the FUTA tax owed is .6% of FUTA taxable wages, except if a FUTA credit reduction is in effect in F/EA's state of operations for that calendar year. If State Unemployment Tax is NOT paid timely or in full, then the FUTA tax rate is 6% of FUTA taxable wages.

The F/EA ensures that all employee taxes are appropriately withheld and that all employer taxes are appropriately calculated so that all taxes can also be correctly paid and filed.

*Employers are liable for FUTA tax if they have paid $1000 or more in gross wages in a single calendar quarter. It doesn't matter how many employees the employer pays; all that matters is if the employer has ever paid $1000 of wages out in a single quarter. If they have, that employer is liable for FUTA on wages paid to his/her employees.

Procedure:

The F/EA's payroll system is programmed with the most current tax withholding tables to ensure that taxes are correctly withheld and calculated for every employee paycheck processed.
<<Insert information on how and when tax tables in payroll system are updated.>>
<<Insert information on how individual employer tax rate information (e.g. for State Unemployment Tax) is stored in the payroll system for each employer and how that calculates the taxes owed.

Internal Controls:

<<Insert how tax tables are kept up to date>>
<<Insert how payroll system is periodically tested to ensure that tax calculations are operating correctly.>>
<<Insert any other information on how paycheck withholings are quality checked or any other information on payroll system controls.>>