Agencies use various systems to process payroll activities.

The State Payroll Revolving Account, Account 035, is used for payroll disbursements by agencies using the Human Resource Management System (HRMS) as maintained by the Office of Financial Management (OFM).

The following procedures are used for transfers and deposits of money to Account 035:

1. Treasury/Treasury Trust Accounts

• Agencies authenticate payroll data in the HRMS system and certify payroll registers for dollar amounts.
• OFM provides journal vouchers and warrant registers indicating the accounts properly chargeable with the payroll expenditures/expenses. OFM then certifies these amounts to the Office of the State Treasurer (OST).
• OST transfers money from the appropriate agency treasury or treasury trust accounts to Account 035 for payroll disbursements chargeable to those accounts.

2. Local Accounts
   

• Agencies paying employees chargeable to local accounts must use the local account expenditure coding in HRMS.
  
  
• Agencies authenticate payroll data in the HRMS system and certify payroll registers for dollar amounts.

• OFM provides journal vouchers and warrant registers indicating the accounts properly chargeable with the payroll expenditures/expenses. OFM then certifies these amounts to the OST.
  
  
• OST transfers money from the Suspense Account 01P to Account 035 for the total amount of payroll disbursements to be made from local accounts.
  
  
• Agencies deposit sufficient money in Account 01P to cover for payroll disbursements chargeable to local accounts.

• All transfers or deposits to Account 01P are due at least one day before the scheduled payroll disbursements.

• If agencies fail to transfer or deposit money on time, they will be required to deposit money in advance of payroll preparation.

Accounts used by other payroll systems vary:

1. Payroll Personnel Management System
   

   Users of the Payroll Personnel Management System maintained by the State Board of Community and Technical Colleges use Account 790 for payroll disbursements.

2. Other Higher Education Agencies with Unique Payroll Systems

Higher education agencies with their own payroll systems may utilize other accounts as either allowed by law or with approval by the Office of Financial Management.

For treasury and treasury trust accounts, OST redeposits amounts for canceled warrants back to Account 035 where the original disbursements were made. Agencies must complete the disposition of these amounts. The returned amounts are either reissued from Account 035 or transferred back to the accounts originally charged with the payroll expenditures/expenses. Refer to Subsection 85.38.50 for procedures regarding warrants canceled by OST after being outstanding 180 days.

For local accounts, payroll checks that are returned should either be reissued or canceled as appropriate.  Payroll checks are normally valid 180 days after issuance and should be canceled when they remain outstanding beyond such time.

For federal work study students, federal requirements may differ. Refer to the Code of Federal Regulations (CFR), Title 34, Section 668.164(h) at: www.ecfr.gov.

Agencies are to accurately record and reconcile all payroll activity, regardless of the account(s) used. Refer to Subsection 85.34.10 for accounting entries and reconciliation requirements.

The following list shows the records required for payroll accounting. (Equivalent records by another name are acceptable alternatives.) Refer to state and internal agency policies for applicable record retention requirements. The general record retention schedule for state agencies can be found at: http://www.sos.wa.gov/archives/recordsmanagement/default.aspx.

The IRS also has records and retention requirements. Refer to Publications 15 (Circular E, Employer's Tax Guide) and 15A (Employer's Supplemental Tax Guide) for the appropriate tax year on record keeping requirements.

RCW 41.06.270 specifies two conditions an agency must meet before paying an employee. The agency head (or authorized designee) must certify that the payroll meets these conditions using the following language:

"I hereby certify that to the best of my knowledge amounts listed in this payroll are true and correct charges and that employees holding a position covered by Chapter 41.06 RCW or other applicable employment contract, have been employed in accordance with the rules, regulations, and orders issued thereunder."

BY_______________________________________________________
(Name, Title, and Date)

"I hereby certify that to the best of my knowledge amounts listed in this payroll, associated with my agency, are true and correct charges and that employees holding a position covered by Chapter 41.06 RCW or other applicable employment contract, have been employed in accordance with the rules, regulations, and orders issued thereunder."

BY_______________________________________________________
(Name, Title, and Date)

1. Agency records include the certification signed by the agency head (or authorized designee):
• Directly on the payroll register, or
• On a separate document if the payroll register is on microfiche.

2. A copy of all documents that reflect personnel actions for:
• Appointment, transfer, promotion, demotion, and salary changes.
• Any other temporary or permanent changes in employee status.

Agencies are to design payroll procedures to produce accurate payment of payroll deductions and employer costs to vendors on a timely basis.

Pay other state agencies by journal voucher or interagency payment whenever possible.

Timely reconciliations are recommended for:

• Year-to-date (YTD) data to ensure information used for preparing federal employment tax payments and reports are correct. Avoid incurring IRS interest and penalty assessments by reconciling YTD wage and tax data to federal deposits, quarterly Forms 941/941-X, and annual Forms W-2/W-2c. Refer to IRS Publication 15 for information regarding resolution of discrepancies and suggestions to reduce errors.
• Health insurance data to ensure that the premiums collected from employees and amount calculated as employer contributions are proper.

When an employee accepts an appointment with a different employer, WAC 357-22-025 requires the most recent former employer to provide employee information to the new employer in a transmittal package developed by Office of Financial Management (OFM) State Human Resources.

Both the terminating and new employing state agencies should make a concerted effort to ensure the employee doesn’t suffer a lapse in wage when there is an immediate continuing employment transfer.

The terminating agency must transfer at a minimum, the following documents to the new agency’s designated office promptly:

The original document that terminates the employee from the transferring agency.

• Employee signed documents authorizing both reductions from gross pay and other deductions.

• All original (past and current) medical, dental, life, long term disability, and any other insurance enrollment forms.

Employee leave records for vacation, personal holiday, sick, shared leave, and any other leave balances.

Use the following OFM forms (or equivalent) to transmit employee records between state agencies:

• 12-011 Employee Payroll Records Transmittal
• 12-048 Employee Personnel Records Transmittal