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STATE OF DELAWARE PAYROLL FORUM INAUGURAL MEETING WELCOME! NOVEMBER 12, 2013

STATE OF DELAWARE PAYROLL FORUM INAUGURAL MEETING WELCOME! NOVEMBER 12, 2013. PAYROLL COMPLIANCE GROUP. Payroll Compliance Group.

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STATE OF DELAWARE PAYROLL FORUM INAUGURAL MEETING WELCOME! NOVEMBER 12, 2013

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  1. STATE OF DELAWAREPAYROLL FORUM INAUGURAL MEETINGWELCOME!NOVEMBER 12, 2013

  2. PAYROLL COMPLIANCE GROUP

  3. Payroll Compliance Group The mission of the Payroll Compliance Group is to provide guidance and training to State Organizations on the proper administration of Payroll functions; compliance with applicable laws, rules, and regulations; and, maintaining effective internal controls.

  4. PAYROLL COMPLIANCE GROUP (PCG) • Debra Cormier – State Payroll Manager • Debra.Cormier@state.de.us • 302-672-5543 • Statewide Payroll Regulatory Compliance • Payroll Policies • Debbie (Hurd) Ide – State Accountant IV • Deborah.Ide@state.de.us • 302-672-5506 • Payroll Planner • Internal Control Plans • Payroll Administration Training Delivery • Adrienne Cobb – State Accountant III • Adrienne.Cobb@state.de.us • 302-672-5517 • Payroll Authorizations • Wage Overpayments / Repayments • Wilmington City Wage Tax • Direct Deposit Participation • Funding Reconciliations

  5. Resources for Payroll Officers • Division of Accounting Website http://accounting.delaware.gov/payroll_comp.shtml • PCG Policies • Explains “Why”… Rules, Regulations, and Laws • PCG Procedures • Covers “How”… Step-By-Step Guidance • PCG Bulletins • Focuses on IRS Regulations and Delaware Code • Response to Organization Inquiries • Conclusion of Compliance Examinations • Reviewed Annually for Regulatory Changes • PCG Memos and Alerts

  6. Resources for Payroll Officers • Budget and Accounting Policy Manual (BAM) http://www.budget.delaware.gov/accounting-manual/account-manual.shtml • Coming Soon: Payroll Compliance Chapter 14 • PHRST Website http://extranet.phrst.state.de.us/ • FSF Website http://extranet.fsf.state.de.us/ • Internal Revenue Service Website www.irs.gov

  7. PAYROLL FORUM MISSION By drawing on the collective experience of members • Discuss recent developments, initiatives & practices in Payroll. • Leverage the hard-won lessons of seasoned professionals. • Sharpen skills thru exposure to new ideas and peer networking. • Promote the personal professional growth of participants. • Improve operational efficiency and enhance internal controls. • Ensure regulatory compliance is “Priority 1”. • Educate.

  8. COMPETING PRIORITIES System Changes Controls Pay Confirm Meetings Tax Laws Funding Who looks this relaxed while juggling all this???

  9. Payroll Forum Ground Rules

  10. Rule #1Always Talk About Forum

  11. Rule # 2Forum is a Judgment-Free Zone X

  12. Rule #3Forum Participants are Fearless Don’t let the little voice in your head that’s trying to stifle your real voice win . This is a safe environment – remember Rule #2!

  13. Rule #4Payroll Forum is about Sharing! Did you hear about the latest tax law? Here’s how we solved that issue… I’m not sure. Let’s discuss it with the group. I have to let my boss know! I love Forum! How did you get the word out? Does that apply to my employees? When is it effective? Oh, great… That’s a great idea!

  14. Rule # 5At the Payroll Forum…We Don’t Shoot The Messenger!

  15. Rule # 5At the Payroll Forum…We Don’t Shoot The Messenger! PCG Especially if it’s ME!

  16. Rule #6There’s No Crying in Payroll! in Payroll!!

  17. PCG INITIATIVES

  18. 2012 – 2013 PCG Initiatives • Payroll Administration Training • Currently Developing Chapters • Coming in 2014! • Statewide Compliance Examinations • Fringe Benefits • Educational Assistance Programs • Internal Control Plans • New Survey & Template • Random Field Audits • Wage Overpayment/Repayment Policy & Procedure • Payroll Forum!!!

  19. PAYROLL ADMINISTRATION TRAINING TOPICS • Over 20 Chapters of Content • In The Works: • Payroll Repayments • Paychecks and Advices • Internal Control Plans • Worker Classification • Form W-4 • Coming: • Taxation • Fringe Benefits • Payroll Calculations • More!

  20. BREAK

  21. Fringe Benefits Examination Statistics

  22. UNREPORTED FRINGE BENEFITS BY TYPE

  23. TAX EXPOSURE

  24. Open Discussion

  25. Fringe Benefits Where does the IRS Start?

  26. Everything is Taxable • Unless a specific IRS exemption applies, all payments or items of value given to employees are considered compensation, and are subject to federal, state, and local (if applicable) income tax and associated OECs. • Fringe benefits include any compensation other than cash wages. • The Internal Revenue Code (IRC) provides exclusions for numerous forms of noncash compensation provided to employees. Working Condition Fringe Benefits are excludable from taxable income.

  27. Fringe Benefits Examination • Uniforms & Clothing • PCG Bulletin 2013_002 – Uniform And Clothing Allowance • Workshops Coming • Meals • PCG Bulletin 2012_004 – Meal Provisions • Employee Gifts/Awards • PCG Bulletin 2012_002 – Employee Awards • State-Owned Housing • PCG Bulletin Coming

  28. Educational Assistance Examination

  29. Educational Assistance • Refer to PCG Bulletin 2013_001 • Coming: Educational Assistance Model Program • Section 127 – Multiple-Job Employees • When aggregate reimbursements for non-job-related courses from all State Organizations reach the $5,250 threshold, all future non-job-related course reimbursements from any Organization are taxable. • Coming: PCG Policy – Aggregate Reimbursements

  30. Payroll Authorizations

  31. Payroll Authorizations • Improved – Simpler Process: • Review Confirmed Reports • Compare to FSF Reports • Submit Verification email on or Before Payday • Done! • Establish Base-Line for Effective Internal Controls • Organizations can implement additional Internal Controls • Audited EVERY Year • Keep Your Authorized Signature Cards Current • Submit Your Funding Authorizations Timely

  32. Wage Overpayments Payroll Repayments

  33. Necessary Tools • PCG-OVRPAY – Wage Overpayment Policy • Rules & Regulations to consider when Recouping Funds • PCG-REPAY – Payroll Repayment Procedure • Step-by-Step Instructions; Repayment Calculations; Employee Notifications; Repayment Agreements; Record Corrections • Supporting Process Forms: • Worksheets (Current & Prior Year) • Notification of Wage Overpayment Form (Current & Prior Year) • Payroll Repayment Form • PayBreezeII

  34. What’s Changed? • Recovering Funds Through PHRST Payroll System: • Current Year: Reduce Wages (ARO/Other Earning Code) • Prior Year: After-Tax Deduction Code PAYDUE • Timely Repayments: < 6 months/Current Year • Employee Approvals: Not Required • Outstanding Balance Deducted From Final Payout • Overpayments > $2500.00 are reported to Secretary of Finance, Attorney General, Auditor of Accounts • Employee Notification of Wage Overpayment Form: • Explains Overpayment & Outlines Repayment Plan

  35. What’s Changed? (cont) • Non-Responsive Employees: • Begin Recouping Funds on Next Paycheck • Alternative Options: • Attach wages through a Garnishment • Accrue 1% Interest on outstanding balance • Report Unpaid Balance to State of Delaware Tax Refunds and/or Attorney General’s Office

  36. Payroll Repayments • Any questions, Call Adrienne Cobb, PCG, 672-5517 • Importance of Accurate Forms and Repayment Checks • Confidence Buster: Over- or Under-Charging an Employee • Forms are Used to Correct Records in PHRST System • Forms are Used to Correct W-2 Information

  37. Payroll Internal Control Plans

  38. Payroll Internal Control Plans • Establishes, Maintains, and Assesses Controls in Place to Protect the Integrity of Sensitive Payroll Data • Reflects Transparency and Accountability to Taxpayers • New Format Used for FY2014 • The PICP Plan • The PICP Questionnaire

  39. Payroll Internal Control Plans • Round 1 – FY 2012(Plans Only) • Just over half complied • Plans not Uniform Across the State • Segregation of Duties not Apparent on Some Plans • Round 2 – FY 2014(Plans and Questionnaire) • 90%Compliance • Plans are More Uniform Across the State • Easier to Detail Segregation of Duties

  40. Payroll Internal Control Plans • What’s next…. • Plans and Questionnaires Reviewed & Scored • Organizations will be sent Written Reviews • Random Organizations will be visited by ICE team

  41. Closing Remarks

  42. Payroll Officers Must Be Fearless Payroll Status Quo Complacency IRS Auditor Go Ahead! Poke the Bear!

  43. Questions

  44. Evaluation / Survey • How Did This Inaugural Meeting Go? • List Topics For Future Meetings • Complete Survey

  45. PAYROLL FORUM NEXT MEETING DATE FEBRUARY 2014

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