Debt Audit Worksheets FEHB Audits INDIANAPOLIS PAYROLL OFFICE 2018 Integrity - Service - Innovation

Learning Objective – Debt Audits Understanding pay histories associated with debt creation Understanding calculations of earnings subject to tax and withholdings Understanding debts created by retroactive timecard adjustments CSR responsibilities for conducting debt audits PRO responsibilities for conducting debt audits Understanding of debt audit computations 10/22/2019 Integrity - Service - Innovation

Learning Objective – FEHB Audits Common FEHB debts Understanding of all FEHB pay codes Comprehending deductions screen Differentiate pre-tax indicator code values Define Part-Time Career Act and calculations Computing FEHB audits 10/22/2019 Integrity - Service - Innovation

Employee’s Master Pay History Master Pay History is a record of an employee's pay history for current and previous pay periods. Online Refers to records that can be viewed up to 26 pay periods from current. If an employee is assigned overseas (specific activity/org), then 65 pay periods from current are online for review. Offline Refers to information beyond 26/65 pay periods. This information is retrieved from a separate database. 10/22/2019 Integrity - Service - Innovation

Master Pay History PPE 8/24/13 Adjustment/ Allowance Code Explain what each column on the pay history going from left to right “SEQ NUM” identifies an adjustment transaction by 5-digit number. “CD/ALW” identifies the codes that were paid for a specific type of earnings and specific types of deductions, and employer contributions amounts. 10/22/2019 Integrity - Service - Innovation

Master Pay History PPE 8/24/13 Adjustment Date Effective Reason Indicator ADJUSTMENT DATE EFFECTIVE: This is the pay period end date, MMDDYY, that a pay adjustment was entered. Retro transactions will be identified by an 'A' following this date, or by Reason Indicators of 'H' or 'R'. REASON INDICATOR: These codes are used as memo records, within the system, in order to produce various reports (e.g., exceptions to scheduled deductions), create indebtedness records (e.g., XO - FEHB) and to provide details of automated retro processing. H - HISTORY MEMO: Appears in the prior pay period History to indicate when a retro was processed against that pay period and identifies the associated earnings and deductions. R - RETRO MEMO: Created and stored in the pay period a retro is processed and identifies monies that need to be collected from the employee and the pay period of over-payment. 10/22/2019 Integrity - Service - Innovation

Master Pay History PPE 8/24/13 IDENTIFICATION CODE: This field may contain various information to further identify the earnings or deduction codes; such as, Job Order Numbers, filing status, tax exemptions, employee age category for FEGLI, health enrollment code, garnishment case numbers and allotment account number. DEDUCTION PAYEE: This code is used to identify the payee associated with a particular type of deduction, such as, the document number for an indebtedness, address codes and/or the Activity for Adjustments, or the retirement code or taxing authority code for applicable subject earnings. 10/22/2019 Integrity - Service - Innovation

Earning Type Codes – Calculating Pay Gross Pay (AA) All combined earnings (Regular Pay + Entitlements /Awards) Net Pay (AB) Combined earnings less all deductions (Taxes, benefits, TSP, etc.) Earnings Subject to Federal Tax (VC) All earnings less dental, vision, FSA, HSA, FEHB, and TSP (if applicable). Earnings Subject to State Tax (VD) All earnings less dental, vision, FEHB, and TSP (if applicable). Earnings Subject to Local Tax (VE) Earnings subject to Medicare (VF) All earnings less dental, vision, and FEHB 10/22/2019 Integrity - Service - Innovation

Earning Type Codes – Calculating Pay Federal Tax (WD) Calculated by tables established by IRS Publication 15 Supplemental rate is 22% as of 1/1/2018 State and Local Tax (WE/WF) Calculated by tables established by state taxing authorities Earnings Subject to OASDI (VI) All earnings less Dental, Vision, FEHB, FSA, HSA Cannot exceed $128,400 for the 2018 tax year OASDI (WM) Earnings Subject to OASDI multiplied by 6.2%. Medicare (WB) Earnings Subject to Medicare multiplied by 1.45% (VF x 1.45% = WB) Any amount over $200,000 is taxed at additional 0.9% (total 2.35%) 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Debt Creation What causes a debt to create? Retroactive Personnel actions changing employee information such as pay, entitlements, awards, benefits, etc. Retroactive Time and Attendance changes, and advanced leave upon separation. Debt Collection Most debts are held within the DCPS Debt Module PRO collect on debts either by payroll deduction, check/money order, or direct payment online via pay.gov 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Debt Case Debt dates: 8/24/13 Debt created: 9/7/13 The Debt Reason: “T” for Time and Attendance Q3 Routine Debt Prior Year: Originally a Q1 debt, however it was rolled over to the new tax year (2014) Routine debts do not generate debt letters, falls under DCIA. 15% deducted every PP, unless changed manually by PRO. PP Ded Amount changed to $25.00/PP 10/22/2019 Integrity - Service - Innovation

Debt Case Accounting Information (F10) Type Code: RA TAXABLE PERCENT (Required/Optional): This is the percentage of the gross earnings associated with this LOA that are subject to taxes. This will be used at the end of the pay year to create subject-to tax adjustments in DCPS so the employee's W2 will accurately reflect taxable earnings. Required with current year debts, may be displayed on prior year debts that were rolled from current year debts. (Example: a Q3 debt that was rolled from a Q1 debt). 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Master Pay History 09/07/13 Pay periods of the debt creation 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Master Pay History 09/07/13 Debt Created in PPE 09/07/13 for PPE DATE 08/24/13 PPE 9/7/13 reflects timecard changes were retroactively input for the pay period of 8/24/13. 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Master Pay History 09/07/13 The debt was created with the current year, deductions are refunded and are applied to the debt as an offset. (Net Debt) Offset amount = 10.91+109.41+34.26+46.62+6.01+22.56 = 229.77 Total -229.77 10/22/2019 Integrity - Service - Innovation

This amount was collected (Offset) Integrity - Service - Innovation Master Pay History 09/07/13 This amount sent to Debt Module for collection Go to the pay histories that was indicated on the Debt Case Screen. This amount was collected (Offset) 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Master Pay History 09/07/13 The debt was created with the current year, deductions are refunded and are applied to the debt as an offset. (Net Debt) Offset amount = 10.91+109.41+34.26+46.62+6.01+22.56 = 229.77 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Master Pay History 09/07/13 Q1: Routine Current Year Debt deduction (15% of remaining balance). 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Debt Case Amt Paid Prior YRS = Q1 deduction 10/22/2019 Integrity - Service - Innovation

Debt Case – Payment History Inquiry (F12) Amt Paid Prior YRS = Q1 deduction (131.90) Amount collected in prior year 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Debt Case Amt Paid Current YRS = Q3 deductions 10/22/2019 Integrity - Service - Innovation

Debt Case – Payment History Inquiry (F12) Amt Paid in Current YRS = Q3 deductions (390.33) Remaining Debt Balance is 0.00 Amount collected in current year 10/22/2019 Integrity - Service - Innovation

Master Time History PPE 08/24/13 System Generated Indicator Date of Adjustments SYSTEM GENERATED INDICATOR : Indicates that information has been system generated. L - LEAVE GENERATED FOR CONVERSION OF OVERTIME AND LEAVE CODES 10/22/2019 Integrity - Service - Innovation

Master Leave History PPE 08/24/13 The Timekeeper retroactively changed Regular hours to LT (COP) for PPE 8/24/13. The COP NTE is 8/16/13 which caused the LT to convert to missing time. 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Debt Audit Examination of employee records To check accuracy To verify accounts To determine if adjustments or corrections are needed Employee’s payroll record to date results from timecard entries and personnel changes via SF-50’s. PRO can verify information that interfaced to DCPS, not the validity of the timecard/personnel entries. Debt audit provides an accounting of what has taken place on the employee’s payroll record so that the Agency can determine validity of payments and deductions. Most Debt audits are conducted for offline pay periods. Agency does not have access to offline pay periods Explain to the class after review the pay histories and the debt cases 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Offline Debt Audit Step 1 Locate any SF50’s, invalid reports, or supporting documentation Step 2 Determine what the employee was paid prior to adjustments Step 3 Determine the authorized amount of pay the employee should have been entitled to. Step 4 Determine the difference the employee owes, and Manually create a debt within the Debt Module. Explain to the class after review the pay histories and the debt cases 10/22/2019 Integrity - Service - Innovation

Per HRO, total salary S/B $40,534.00 Integrity - Service - Innovation Offline Debt Audit Per HRO, total salary S/B $40,534.00 Action processed and rejected to the invalid report cancelling WIGI effective 3/27/11 (Offline at the time it was processed). 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Offline Debt Audit Action processed and rejected to the invalid report cancelling WIGI effective 3/27/11 (Offline at the time it was processed). Offline MER reflects erroneous Salary of $41885.00 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Offline Debt Audit Action was updated in MER for the oldest online record. DCPS retroactively indebted the employee from the oldest online PP forward. Offline audit required for PPE 4/9/11 through 7/16/11. 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Offline Debt Audit No Retroactive Adjustments for PPE 7/16/11 or Prior No retroactive adjustments for PPE 7/16/11 or prior. 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Offline Debt Audit Debt audit worksheet: Verify all offline/online pay histories to properly show the previously paid earnings. Online pay periods are used to verify all retro is accounted for. Determine the amounts that should have been paid to the employee. Lastly, the difference column totals all the negative earnings (debt) to calculate the total amount of the debt. 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Offline Debt Audit The debt is built manually within the module (SYS GEN N). Since the PPs are offline for a prior year, the employee owes the Gross amount of the debt. No deductions are refunded to be used as an offset. 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation Offline Debt Audit Prior year debts do not reflect a taxable % 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation FEHB Debts Why FEHB debts generate Change in election retroactively to a higher plan Erroneous refunds Employee in LWOP status Part-Time Career Act eligibility Pay Codes for FEHB deductions WG = FEHB Premium Deduction XO = Debt owed to the Carrier JO = Debt owed to the Agency UH = Employer Contribution UO = Employer Contribution-Prepaid FEHB Premium NOTE: Negative deductions are credits to the employee/employer 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (Before) Utilize MER to validate the FEHB coverage elected, gather the dates and rates for each time period covered. If the MER is not accurate a correction needs to be processed. 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (Before) Deduction Code and Identification Effective Date of FEHB Enrollment 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (Before) FEHB enrollment code. ‘R’ reflects deductions are withheld from pre-tax monies. 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (Before) Employee’s FEHB contribution. Employer’s FEHB contribution. 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (Before) Date end of FEHB Enrollment 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (Before) The 99 99 99 Date indicates this is the Current/Active FEHB Enrollment Plan 10/22/2019 Integrity - Service - Innovation

FEHB-Debt PCA indicator change 10/22/2019 Integrity - Service - Innovation

Add/Change/Delete Report (P6609R01) Report reflects Personnel (P) changed PCA Indicator from N to Y. (NOAC 781 – Work Schedule change) 10/22/2019 Integrity - Service - Innovation

Master Pay History Employee has erroneous premiums deducted at the full time rate. 10/22/2019 Integrity - Service - Innovation

Master Pay History Future date reflects the Enrollment change. Retroactive adjustments reflect ‘H’ under Reason Indicator for ‘History’ 10/22/2019 Integrity - Service - Innovation

Notice: UH has no RSN IDC Integrity - Service - Innovation Master Pay History RSN IDC ‘R’ identifies monies that need to be collected from the employee and the Adjustment Date reflects the retroactive pay period. Notice: UH has no RSN IDC 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (After) Deductions menu now reflects the XO debt (manually entered by PRO) 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (After) Total deduction amount withheld to date. Amount reflects biweekly amount to be deducted. 10/22/2019 Integrity - Service - Innovation

Master Employee Record – Deductions (After) Reflects total amount of debt (Paid in full) 10/22/2019 Integrity - Service - Innovation

Part-time Career Appointment (PCA) Employees working 16 to 32 hours a week or 32 to 64 hours biweekly are entitled to a partial Government contribution in proportion to the number of hours scheduled to work in a pay period. To obtain the Percentage Factor amount of the Government contribution (UH) Divide the number of hours the PCA employee is scheduled to work during the pay period by the number of hours worked by a full-time employee serving in the same or comparable position (normally 80 hours per biweekly pay period). 10/22/2019 Integrity - Service - Innovation

Part-time Career Appointment (PCA) To obtain the Government Contribution amount (UH) for the PCA Employee The Percentage Factor is multiplied by the Government contribution amount made for full-time employees enrolled in that plan To obtain the PCA Employee’s Contribution The Government contribution is deducted from the Total Premium (Government share + Employee share) Remaining amount is withheld from Employee’s pay. 10/22/2019 Integrity - Service - Innovation

Part-time Career Appointment Hours worked on a regular biweekly schedule Factor 32 0.4000 49 0.6125 33 0.4125 50 0.6250 34 0.4250 51 0.6375 35 0.4375 52 0.6500 36 0.4500 53 0.6625 37 0.4625 54 0.6750 38 0.4750 55 0.6875 39 0.4875 56 0.7000 40 0.5000 57 0.7125 41 0.5125 58 0.7250 42 0.5250 59 0.7375 43 0.5375 60 0.7500 44 0.5500 61 0.7625 45 0.5625 62 0.7750 46 0.5750 63 0.7875 47 0.5875 64 0.8000 48 0.6000 <32 or >64 1.00 10/22/2019 Integrity - Service - Innovation

Part-time Career Appointment - Calculations 2016 FEHB PT Calculation: Scheduled Hours: 40/Biweekly (40/80 = .5000) 424.95 (Government Contribution) X .5000 = 212.48 625.09 (total premium WG+UH) – 212.48 = 412.61 2017 FEHB PT Calculation: Scheduled Hours: 40/Biweekly (40/80) = .5000 437.62 (Government Contribution) X .5000 = 218.81 642.60 (total premium WG+UH) – 218.81 = 423.79 Government Percentage Factor is .5000 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation FEHB Debt Audit Performing an audit utilizing DCPS identifies how the Debt amount was calculated. 10/22/2019 Integrity - Service - Innovation

Integrity - Service - Innovation QUESTIONS? 10/22/2019 Integrity - Service - Innovation