About this Policy
Policy Number: 22303
Oct 01, 2017
Jan 01, 1970
UM System Controller’s Office
UM System Controller
Campus Accounting Office
- Reason for Policy
- Policy Statement
- Related Information
This policy outlines requirements for payroll transactions, reconciliations and other payroll activities.
The purpose of this policy is to ensure payroll is accurately reported in the general ledger and reflects the effort that occurred.
Transactions should be recorded, authorized and verified in a manner that reflects actual payroll activity in the general ledger. All payroll transactions should be reviewed and evidentiary materials created and retained as support. Segregation of duties between roles during the payroll process should be followed. The individuals entering the time (time keeper), approving the time, and verifying payroll should be different for each role. The Verifier must not have access to act as an approver unless the review is approved by the department.
The Verifier at each department should review payroll transactions within their ChartFields. The review should ensure the payroll posted to their ChartFields is appropriate. Verification of payroll includes but is not limited to review of: hours worked, additional pay amounts, earnings code, rate of pay, includes all employees to be paid, excludes unauthorized employees, and comparison of the prior period amounts to the current pay period and budget. Any differences should be investigated and resolved as appropriate. Reviews should be performed and documented each pay cycle. At a minimum, departments must verify payroll amounts monthly to ensure corrections are made in a timely manner.
Any correction of payroll between ChartFields should be made in a timely manner. Every effort should be made to record corrections in the fiscal year in which the original entry occurred. The correction must be supported by documentation that fully explains how the error occurred and allowability of the expense on the funding source charged to comply with federal regulations. Payroll/benefit expense corrections must be made using a Payroll Correcting Entry (PCE). PCEs that are outside the one year correction period are required to be submitted to the campus accounting office or office of sponsored programs for review and approval. Corrections impacting sponsored activity funding or federal program codes must be reviewed and approved by the principal investigator, an authorized signer for the ChartField incurring the expense, and the campus office of sponsored programs. Accounting offices and office of sponsored programs offices may use discretion to temporarily modify or provide an exception to the approval process.
Verifier – one or more individuals within a unit that are responsible for confirming the accuracy of payroll transactions and/or expenses, such as appropriate use of ChartFields and that the transaction or expense was recorded in the appropriate accounting period.
UM System Controller’s Office:
Reconcile payroll system to the General Ledger
- Review salaries and wages in the General Ledger at least annually for reasonableness
- Review and approve PCE transactions processed after the one year correction period when no sponsored activity or federal program codes are impacted
Campus Office of Sponsored Programs:
Review and approve PCE transactions with sponsored activity funding or federal program codes that have been processed after the one year correction period
- Verify payroll at least monthly
- Process PCE transactions in a timely manner. If more than one year past the pay end date, submit documentation to Campus Accounting or Sponsored Program office for approval.
- Principal Investigators review and approve PCE transactions with sponsored activity funding that have been processed after the one year correction period as part of the documentation submitted to Office of Sponsored Programs.
- Authorized signers review and approve PCE transactions with non-sponsored activity funding that have been processed after the one year correction period as part of the documentation submitted to Campus Accounting or Office of Sponsored Programs.
Reviews could be accomplished by utilizing the following tools/reports:
- Transaction checklist
- Payroll expense distribution reports
- Pay comparison reports
- Payroll summary reports (income statement)
- Cognos Reports (such as Actuals Review 1, 2A & 4)
- Ad-hoc queries
Related policies include:
Formerly Accounting Policy Manual 55.60.02 – Entering, Approving and Reconciling Payroll – Time and Labor (revised 7/1/2012)