Payroll Forum SBIP Update

May 11, 2005

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Statewide Business Infrastructure Program (SBIP)

Legend: Current ProjectPast Projects Upcoming Projects

Past Projects Current Project Upcoming Projects Future Projects

Financial & HR Business Infrastructure Study Phase 1

Inventoried present systems and provided assessment of technical and functional capabilities

Financial & HR Business Infrastructure Study Phase 2

Provided a blueprint for viable implementation options and a recommended course of action

HR/Payroll Planning Project

•Identify process re-engineering and structure

• Develop integration strategy and risk analysis

• Develop business requirements

HR/Payroll Bid Preparation Project

• Develop bidding document for implementation

• Select Vendor for HR/Payroll Implementation

HR/Payroll Implementation Project

• Implementation

Statewide Business Infrastructure Project – Budget & Financials

Statewide Business Infrastructure Project – Tax & Revenue

SBIP Data Warehousing Planning Project

• Develop needs assessment

• Confirm Scope

• Develop implementation timeline and approach

• Develop business requirements

SBIP Data Warehousing Implementation Project

• Implementation

Future Projects

3

• HR/Payroll Project Update

• Payroll JAD Session Update

4

HR/Payroll Project Update

Activities Completed This Period

4/7/2005 – 4/29/2005

Completed Phase 1 of HR/Payroll Project

Completed HR 1 and 2 deliverable enhancements

Completed Payroll deliverable

Completed Technical deliverable

Completed Change Management deliverable

Drafted re-engineering and organizational strategies deliverable

Completed project executive summary/legislative update document

Drafted and approved proposal for business process improvement activities

Began preparations for business process improvement activities

Began preparations for meetings with CFOs and CIOs

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Collect Time and Attendance – Feb 14th & 15th

Process Owner: Kathy Reitzel

Number of Participants: 14

Agencies represented:– Administrative Office of the Courts– Department of Correction– Department of Environmental and Natural Resources– Department of Health and Human Services– Department of Justice– Department of Revenue– Department of Transportation– Office of the State Controller

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HR150 – Collect Time and Attendance

Send the Time Data to Payroll

Process the Time and

Attendance Data

Approve and Release Time/

Leave Data

Evaluate Time and Leave Data

Monitor Time/Leave Balances

Capture Exception Time and Accounting

Overrides

Update Leave Balances

Collect and Record Time,

Leave and Accounting Data

HR-100Manage Payroll

HR-100Manage Payroll

HR-100Manage Payroll

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JAD Session HighlightsCollect Time and Attendance

Process Overview

This process includes collecting leave time, capturing exception time, approving the leave data, and monitoring time and leave balances. Time and attendance information is typically captured at the source where it originates

through a variety of tools.

Improvement Opportunities Apply leave policies consistently across agencies Transfer leave balances seamlessly across agencies as an

employee moves between affiliated state organizations Allow electronic signature approval for routing

Potential Barriers Complexity and magnitude of business rules and laws for

timekeeping Dispersed workforce will make training and support more

difficult Disparate business rules need to be standardized Perception of ownership – “This is OSC/OSP’s system, not

the agencies’”

Benefits

Ability for the state to accurately report use of leave across the state

Employees trust the accuracy of time reporting when input personally

Increased processing window for time collection and approval

Time and effort saved because managers will no longer need to verify calculations on timesheets

Increased availability of staff due to electronic delivery of timesheets

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Manage Payroll Pre-Processing – Feb 23rd & 24th Process Owner: Phyllis Creech

Number of Participants: 47

Agencies represented:– A&T State University– Administrative Office of the Courts– Community Colleges– Comprehensive Major Medical Plan– Crime Control & Public Safety– Department of Administration– Department of Agriculture– Department of Commerce– Department of Correction– Department of Cultural Resources– Dept of Environment and Natural

Resources– Dept of Health and Human

Services– Department of Insurance– Department of Juvenile Justice– Department of Labor– Department of State Treasurer

– Department of Transportation– Elizabeth City State– Employment Security Commission– Fayetteville State University– Information Technology Services– NC School of the Arts– Office of Administrative Hearings– Office of State Budget and

Management– Office of the State Controller– Revenue Department– Secretary of State– State Auditor– UNC Ashville – Western Carolina– Wildlife Resources Commission– Winston Salem State

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Manage Payroll Processing – March 2rd

Process Owner: Doris Martin

Number of Participants: 43

Agencies represented:– A&T State University– Administrative Office of the Courts– Community Colleges– Comprehensive Major Medical Plan– Department of Administration– Department of Agriculture– Department of Commerce– Department of Correction– Department of Cultural Resources– Dept of Environment and Natural

Resources– Dept of Health and Human

Services– Department of Insurance– Department of Juvenile Justice– Department of Labor– Department of State Treasurer

– Department of Transportation– Employment Security Commission– Information Technology Services– NC School of the Arts– Office of Administrative Hearings– Office of State Budget and

Management– Office of the State Controller– Revenue Department– School of Science and Math– Secretary of State– State Auditor– UNC Ashville – Western Carolina– Wildlife Resources Commission– Winston Salem State

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Manage Payroll Post-Processing – March 3rd

Process Owner: Patty Norris

Number of Participants: 36

Agencies represented:– A&T State University– Community Colleges– Comprehensive Major Medical Plan– Department of Administration– Department of Agriculture– Department of Correction– Department of Cultural Resources– Dept of Environment and Natural

Resources– Dept of Health and Human

Services– Department of Insurance– Department of Juvenile Justice– Department of Labor– Department of State Treasurer

– Department of Transportation– Employment Security Commission– Fayetteville State University– Information Technology Services– NC School of the Arts– Office of Administrative Hearings– Office of State Budget and

Management– Office of the State Controller– School of Science and Math– State Auditor– UNC Ashville – Wildlife Resources Commission– Winston Salem State

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HR100 – Manage Payroll

Add Staffing Changes and

Transfers

Collect Hourly Employee Time and Attendance

Information

Collect Benefits Related Data

Collect Other Payroll Related

Data

Collect Rewards Related Data

Collect Performance-Based Compensation Data

Collect Salaried Employee Time and Attendance

Data

Create and Maintain

Employee Master Record

Consolidate Pay Period Data

Schedule Payroll Operations

Process Benefits Information

Process Payment Data

Process Employee Data

Changes

Process Staffing Changes

Process Rewards Information

Process Absences from

Work

Calculate/Process Gross Pay Process

Process Deductions and

Premiums

Process Net Pay

Confirm Net PayIs Net Pay Correct?

Process Final Pay Cont'd.

Yes

No

HR-150Collect Time and Attendance

HR-020Plan and Manage HR Programs and Plans

H-030Manage Wage & Contribution Receipts

Update Accrued Leave Balances

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HR100 – Manage Payroll

Coordinate Payroll with Appropriate Institutions

Post Payroll to General Ledger

Produce Pay Slips

Produce Pay (Manual/

Automated)

Process Other Deductions

Cont'd.

Research and Distribute Wage Verification Data

Receive Employee Inquiries

Communicate Results to Employee

Is it Year-End?

Perform Year-End Closing

Clear Year-End Accumulators and

Balances

No

Yes

DC-020Process Accounting Transactions

Produce Payroll and Audit Reports

DC-070Perform Closing

HR-020Plan and Manage HR Programs and Plans

H-030Manage Wage & Contribution Receipts

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JAD Session HighlightsManage Payroll

Process OverviewThis process includes the

collection of time and attendance and accounting data; collection and calculation of gross pay, deductions, and net pay; leave balance and account maintenance; links to accounts payable, general ledger, budget, funds management; and required payroll audit reports for 941’s and W-2’s and 1042s (tax documents for treaty benefits).

Improvement Opportunities Utilize employee self service for data inquiries/changes Eliminate multiple agency employee payroll records Develop strong payroll processing policies and

procedures with electronic access Automate and monitor approval for dual employment

Potential Barriers HR and payroll need education regarding responsibilities

and deadlines to work together more effectively Sheer magnitude of the project is daunting Too many exceptions and modifications requested will

have a negative impact on implementation

Benefits Elimination of separate/duplicate HR and

Payroll systems will strengthen data integrity

Elimination of duplicate data entry will increase efficiency

Provides a seamless transition for employees transferring between agencies

Automated calculations will decrease errors and increase consistency

Standardized and streamlined processes allow for policies to be applied consistently across all agencies

An automated system provides for an

easier payroll audit

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• Payroll Business Process Improvement

― Policy Development

― Standardize Procedures

― Quick Hits

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Develop standardized policies for use by all agencies

Review current system procedures to create standards for all agencies

Create OSC as the focal point for payroll policies and procedures

Develop central payroll manual

Implement quick hits to accelerate benefits to agencies

Prepare for future implementation of HR/Payroll system

Maintain enhanced web site capabilities

Supports Payroll compliance

Business Process Improvement Objectives

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High Level Project Timeline

For pre-implementation activities, HR and Payroll will be separated into two distinct streams of work.

Activities for HR process engineering will span twelve weeks and Payroll approximately seven weeks.

Project Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Month

Date 2 9 16 23 30 6 13 20 27 4 11 18 25 1 8 15 22 29

HR Business Process Improvement

Payroll Business Process Improvement

AugustJ ulyJ uneMay

Pre-Implementation Activities

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Policies vs. Procedures

A policy is a “what” and the procedure is a “how to”

Policies are written as statements or rules

Procedures are written as instructions, in logical, numbered steps

Policy

Formal statement of a principle or rule that members of an organization must follow. Each policy addresses an issue important to the organization’s mission or operations

Procedure

Tells members of an organization how to carry out or implement a policy

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Developing Standardized Payroll Policies

Conduct Payroll BPI Kick-off meeting

Gather documentation, memos and State statues for Payroll policies

Gather sample policies from Universities and other State agencies

Prepare materials for upcoming sessions

Review existing policy documentations

Create a list of appropriate policies with template

Prepare drafts for review

Communicate policies to CFO’s and Payroll Officers

Outline procedures for policy update and revision

Gather Data CommunicateAnalyze &

Confirm

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Sample List of Standardized Policies

Retroactive Adjustments Calculation of Time Payroll Tax Withholding Determination of Employee vs. Contractors Garnishments, Levies, Child Support Stop Payments and Re-issuance of Payroll Checks Payroll Schedule Release of Payroll Information Terminated Employees New Hire Foreign Nationals Temporary Employees Other Pay (supplemental, awards, bonuses) Deceased Employee Final Payment Out of State Employees Direct Deposits

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Sample List of Quick Hits

Enhance check printing Provide net pay calculation tool Publish standardized payroll calculations Create Central Payroll manual Improve web site Streamline transfer of leave balances across agencies Improve dual employment processing Develop OSC as a central focal point for payroll processing

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Next Steps

Gather data for policies/procedures

Create draft policies/procedures

Review policies/procedures with selected representatives

Identify quick hit opportunities

Prioritize high impact quick hit opportunities

Validate quick hit opportunities with representatives

Implement quick hits and prepare for HR/Payroll implementation

John Morgan

jmorgan@ncosc.net

(919) 871-6480