Entering, Approving, and
Reconciling PayrollTime and Labor
APM 55.60.02
Course Objectives
• Gain an understanding of the policy
• Discuss recommended procedures
• Discuss segregation of duties for payroll
activities
2
Definitions
• EDR—Expense Distribution Report, a report
listing employees and the ChartFields they
were paid from
• Pay Comparison Report—Listing of employees
whose rate of pay has changed from the
previous period
3
Payroll Duties
Activities
Verification / Reconciliation
Managerial Review
• Authorize time
• Ensure accuracy
• Ensure time is entered
and approved
• Verify completeness
• Verify changes were made
• Verify accuracy in General
Ledger
• Reasonability
• Prior steps done
• Reconciling items are appropriate
• Review Gross Pay
Inquiry screens
• Review BIW time
• Review MON absences
• Expired Appointments
• Verify everyone is included
• Additional Pay is accurate
• EarnCodes are accurate
• Appropriate ChartFields
• Reconciliation of EDR to GL
• Test reasonability of payroll, trend
analysis
• Verify prior steps are completed
• Reconciling items appear appropriate
• Review USHR0087 and EDR for unusual
or unanticipated payroll items
Activities
• Maintain
delegates
• May adjust
time
Approver
Objective
Objective
Time Keeper
• Approval in Time &
Labor
• Completed checklist or
prepared reconciliation
AND
• Signed EDR, and USHR0087
• Signed checklist or reconciliation
AND
• Signed EDR, and USHR0087
4
Required Output
Required Output
• Review EDR to assure pay includes only appropriate
persons
• Review USHR0087
Time Keeper
•
•
•
•
Overview
All employees enter their own time
• Exempt enter absences
• Non-exempt enter time and absences
Paper timesheets not required
May adjust time as necessary
May review exception reports
5
Time Keeper
Suggested Tasks
• Reasonability test data entered
• Monitor for expired appointments
• May review Payroll Comparison report
6
Time Keeper
Required Functions
• Enter and maintain delegates
• Communicate with Payroll and HR offices
7
Approver
Overview
• Should be a supervisor
• Authorized by Department Management
• Approval may be delegated
• Not the same person who performs the
verification
• The system documents approval
• Approves time entered (not payroll amounts)
8
Approver
•
•
•
•
Objectives
Authorize time entered
Ensure time entered is accurate
Ensure all time is submitted
Review for missed punches
9
Approver
•
•
•
•
Activities
Review Payroll Comparison Report
Review EDR
Review payroll amounts—
View Gross Pay inquiry screen
Review bi-Weekly time and monthly absences
for accuracy and appropriateness
10
Approver
Required Output
• Time and absences are approved in Time and
Labor for monthly and bi-weekly
11
Verification / Reconciliation
Overview
Should not be performed by Approver or
Timekeeper
12
Verification / Reconciliation
•
•
•
•
Objectives
Verify changes are appropriate and accurate
Ensure payroll is complete
Validate General Ledger Entries
Validate on EDR
Nothing Unauthorized
Rate of Pay
Additional Pay amounts
Hours
Earnings code
Validate ChartFields
• Review for expired appointments
13
Verification-Verify Changes
USHR0087
14
Verification-Verify Changes
Verify Accuracy & Appropriateness of Changes
Look for changes that are missing.
15
Verification-Verify Changes
Print - Sign - Date
and Retain
16
Verification-Verify Changes
Research any unauthorized
changes in pay amount for exempt
employees
17
Verification-Verify Changes
Look for changes that were not made.
18
Verification-Verify Changes
Print – Sign – Date – and
Retain
19
Verify– Validate Information
USHR Reports
• Do not use USHR0112
•
Not Based on Payroll System
• USHR0173 Used for Employee Detail
• Expense Distribution Reports (EDR)
•
•
Summary (e.g., USHR0193S)
Detail (monthly and bi-weekly payruns
e.g. USHR0193M/B)
20
Verify– Validate Information
Expense Distribution Reports
• Three groupings within each EDR type
• USHR0193 summarizes by DeptID
• USHR0208 summarizes by Program
• USHR0209 summarizes by Project
21
Verify – Validate Information
EDR USHR0193S
22
Verification – General Ledger
The total payroll expense for the
department in total should be compared
From the EDR
To the Income Statement
23
Verification – General Ledger
• Complete the Checklist for payroll transactions
• Review non-PRL sourced entries
• Payroll Correcting Entries
• Journal Entries
• Vouchers
24
Verify — Reconcile
25
Verify — Reconcile
26
Verify — Reconcile
There is a difference
27
Verify — Reconcile
28
Verify — Reconcile
Note the
resolution of the
reconciling items
29
Verify — Reconcile
Sign, Date, and
retain the
reconciliation
30
Verification / Reconciliation
Required Outputs
• Signed EDR
• Signed Pay Comparison Report (USHR0087)
• Reconciliation or completed Checklist
31
Managerial Review
Overview
• At least Quarterly
• Frequency dependent upon control environment
• By Department Head or Designated
Administrator
32
Managerial Review
Objectives
• Review detailed enough to determine:
•
•
•
•
Authorized transactions accurately recorded
Timely transactions in General Ledger
Adequate controls exist
Payroll amount is reasonable
33
Managerial Review
Activities
•
•
•
•
•
•
Review the EDR
Review USHR0087
Review the Income Statement
Review any reconciling items
Ensure verification/reconciliations were timely
Retain documentation in department
34
Managerial Review
Required Output
• Signed
• EDR
• Pay Comparison Report (USHR00087)
• Checklist or Reconciliation
35
Why Segregate Duties?
• Segregation--One person only performs one
task:
•
•
•
•
Record
Approval
Verify
Managerial Review
• Benefits of segregation
• Deters fraud
• Detects errors
36
Segregation-Compensating Controls
• When less than optimal segregation exists,
implement compensating controls
• Compensating controls include:
• Managerial review for every pay cycle
• Perform detailed managerial reviews
• Share resources with other departments
37
Segregation—Levels of Review
Time
Keeper
1
1
1
1
1
Manager
1
1
Manager
1
Manager
Verifier/ Managerial
Approval Reconciler
Review
2
3
Manager
2
1
Manager
1
2
Manager
Manager
1
Manager
Manager
2
Manager
Manager
1
Manager
2
Manager
Manager
2
2
Manager
1
1
Manager
Manager Manager
Manager
Manager Manager
Manager
Detail or
Frequency
High Level
Quarterly
High level
Quarterly
High level
Quarterly
High level
Quarterly
High level
Quarterly
High level
Quarterly
Detail
Pay Cycle
Detail
Pay Cycle
Detail
Pay Cycle
Detail
Unacceptable
Unacceptable
38
Summary
• Keep roles segregated if possible
• With optimal segregation-mangers must
document their review of at least one pay
cycle per quarter for each DeptID, Program, or
Project as appropriate
• Verifier must sign the EDR, USHR0087, and
either complete Checklist or Reconciliation
39
Additional Information
• University Accounting Policy Entering, Approving,
and Reconciling Payroll – Time and Labor –
APM 55.60.02
• Other related training available:
• Financial Compliance Training Website
• Contact your Campus Accounting Office for
departmental training sessions or further discussion
40