FIACCT 11-17_00 Payroll – Payroll Review and Independent Approval Process

Effective: March 1, 2009
Revised: March 7, 2017
Reviewed: March 10, 2017

Purpose

To define responsibility for the accuracy of payments from the Payroll System through the review and approval process.

Policy

Because payroll expenditures are a large part of agencies’ costs, there must be adequate controls in place
to ensure those expenditures are correct. Each state agency is responsible for reviewing and approving the time and other pay information entered in the Payroll System before such entries are posted to FINET and paid in an employee’s paycheck. A manager or supervisor other than the employee or the time entry operator must review and approve all payroll entries each pay period. An audit record of the review and approval process must be maintained.

A. Payroll Entries – Time and other pay entries may be entered into the payroll system in two ways:
1. Employees may use the Employee Self-Service (ESS) System to enter their own time; or
2. A designated ‘Time Entry Operator’ may enter time from an employee’s signed and supervisor-approved timesheet, or enter other pay from appropriate and properly approved documents.

B. Entry Approvals – Entries may be reviewed and approved in two ways:
1. The employee’s supervisor or a designated alternate may use the Employee Self-Service
System to perform the review and approval process; or
2. An agency “Payroll Coordinator” may use the payroll system to perform the review and
approval process. No entries, including correcting entries for prior periods, will be paid unless
they are approved by someone other than the person making the entry.

C. Audit Record – A record of the entries and approvals will be maintained in the Payroll System.
They will include the identity of the person making the entry or approval, along with the date and time of the entry/approval. Entry source documents, such as paper time sheets and other pay
documents, must be maintained by the agency in accordance with the state’s document retention
schedule.

D. Time Entry Alerts Report – Each agency must run this report before payroll is processed to assure that all entries are approved (or deleted if not approved) before payroll processes for the current period. Entries that are not approved are not processed. This report lists employees whose payroll entries have not been approved for processing and includes the employee’s supervisor. It also lists employees who are in a time entry required pay status but have no time entries.

Procedures

Responsibility

Action

Agency (Including DHRM’s Payroll Entry Group, ERIC)

1. Use ESS as the primary process for time entry and approval.

a. Notify employees with internet access of their responsibility to enter their time data each pay period in a timely and accurate manner.

b. Notify Supervisors of their responsibility to approve their employees time entries in a timely manner.

2. Where employee ESS time entry is not feasible but approval on ESS is feasible:

a. Identify all department supervisors with Internet and state email access

b. Have employees complete paper time sheets

c. Assign a Time Entry Operator to enter time from the time sheets

d. Notify supervisors to use ESS to approve the operator’s entries. (The time frame for approval will be shortened by the amount of time it takes the operator to complete the entries.)

3. Where use of ESS as the primary entry and approval method is not feasible:

a. Have employees and supervisor complete and approve paper time sheets

b. Assign a Time Entry Operator to enter time for these employee

c. Assign a Payroll Coordinator to approve the operator’s entries after checking that they agree with the paper time sheets (Use the ‘CAPS – Approve Times: Master Data’ transaction in the payroll system.)

d. Payroll Coordinators should not perform mass approvals as this indicates that agreement between the time sheets and the entries was not verified.

4. Run the ‘Time Entry Alerts’ report to identify potential entry problems:

a. Follow-up with supervisors of employees that have no time entries

b. Follow-up with supervisors of employees that have time or other pay entries that are not yet approved

c. Run the report and perform follow-up as many times as necessary to eliminate entry problems before final payroll runs

5. Assign staff to monitor unapproved payroll entries and serve as back up approvers.

6. Run and review the following reports after time evaluation is processed (usually by the end of the day on Friday). Make corrections before preliminary payroll is processed (usually Monday morning of payday week). This processing schedule changes as necessitated by a holiday.

a. Time Edit Report – This report lists all employees with time that does not match the scheduled hours and/or who have other pay entries.

b. Time Summary Report – This report is a summary of all the time and other pay that will be paid when payroll is processed. A review of this report helps identify payroll entry errors that were missed by the approver.

c. Report of Current Leave Balances – This report can be used to identify employees with a negative leave balance (most common when employees have used more comp time or excess leave than they have earned).

d. Comp Delete Report – This report is used to identify FLSA-Exempt employees that lost comp time at the end of their ‘Comp Delete Anniversary Period’, as well as employees who earned and lost comp time hours which need to be restored. (The timeframes and pay periods associated with each comp delete anniversary period are shown below)

7. Run and review the following reports after preliminary payroll is processed (usually Monday morning of payday week) and before final payroll is processed (usually Tuesday morning of payday week). The preliminary and final payroll processing schedules change as necessitated by a holiday.

a. Payroll Results Edit Report – This report can be used to identify
possible payroll errors before final payroll is processed each pay period. For example, overpayments could be identified by using the selection filters for unusually large amounts of gross pay. Correcting entries should be made before the final payroll is processed for the period.

b. State Paid Benefits with No Pay Report – This report lists employees
who are not getting paid but that have state paid health and other
insurance coverage that is being paid. Check the listed employees to
assure that benefits are only paid for employees that are entitled to
them.

c. Unpaid Employees Report – This report lists employees who have not been paid from the specified date. The last date an employee was paid is displayed on the report. This report should be run and reviewed along with the State Paid Benefits with No Pay Report.

DAS Division of Finance State Payroll Section

1. Maintain a record of all entries and approvals within the payroll system.
2. Monitor for mass approvals and notify agency management of Payroll Coordinators who perform mass approvals as this indicates that agreement between the time sheets and the entries was not verified.