1. December 12, 2012

2.  AOS Accounts Payable  Banking (Bounce Backs)  P/Card  AOS Vendor Processes  1099 Reporting and Accounts  Independent Contractors  Questions 2

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4. 4  Processing Information  Voucher Audit Points  AP Packet Guidelines  Utilities  Payment to Wrong Vendor  ACH Returns

5.  You can always see what day AOS is entering vendor information and approving payments by looking at the AOS portal or the AOS website. You can also access our portal through PS- Accounts Payable  www.auditor.in.gov www.auditor.in.gov  http://www.in.gov/auditor/2440.htm http://www.in.gov/auditor/2440.htm 5

6.  Remit Vendor  Remit Location  Remit Vendor Address  Receipt Date  One invoice per voucher  Vouchers must be posted 6 The AOS audit includes, but is not limited to, the following fields:  Agency Approvals  Invoice Vendor  Invoice Number  Invoice Date  Invoice Total  Invoice Line Description  Invoice Line Account

7.  Receipt ID and Date  Purchase Order ID  this does not apply to QPA purchases. All QPA purchases should have be on a PO in order to tie the spend to the contract. 7 All Invoices over $500 using Account Points 3, 4, 5, 7 and some 9’s will also be Audited for : Vouchers with incorrect or missing information will be denied and returned to agencies for correction.

8.  Submit invoices in voucher order  Vouchers in a Control Group must be Posted prior to Agency approval and sending to AOS. (Monitor using SOIAPOO8)  If any voucher in a Control Group is not Posted – the Entire Control Group will be denied and returned to the Agency. 8

9.  Starting January 1, 2013 – the coversheet template on the following slide must be used.  Specific Packet Guidelines are posted on the Auditor’s Portal - Accts Payable > Information > Encompass Information  Packet Types  Non Travel  Travel  Utilities  SDO Reimbursement  High Volume  Pre-Approved Special 9

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11.  Pre-Approved Special  Agency needs AOS pre-authorization  Vouchers need Scheduled Due Date changed to Current date (credit vouchers).  Vouchers need immediate/expedited AOS approval 11

12.  Packet Packaging  Arrange Transmittals by Voucher ID  Package by Type (Non Travel, Travel, Utilities, HV, SDO or Pre- Approved Special)  Staple Transmittals on top of Invoices  Include only as many Transmittal/Invoices as will fit into an interoffice envelope. (No daily limit on envelopes)  Attach new coversheet to the front of the packet and send to the AOS Service Center. 12

13.  The following vendors require the account number ONLY to be in the payment message field on the payments tab of the voucher. 13 AT&T Mobility: 221336 AT&T Mobility LLC: 80673 AT&T: 271654 AT AND T: 13945 SBC: 50030 JP Morgan Chase81023 American Elec Power: 52747 NIPSCO: 50220 EMBARQ: 224760 IPL: 50025 Duke: 50233

14.  Agency needs to contact the wrong vendor and have them refuse the deposit  If payment is refused, AOS will treat the transaction exactly like a bounce back.  In rare circumstances, AOS can try to reverse the deposit (only as a last option). This is not a guarantee.  We will cancel and not re-issue payment and close voucher. Cancellation of payment will reverse all accounting entries and 1099 reporting to the wrong Vendor 14

15.  Payment is Stopped and rescheduled  Vendor Remit Location is put on HOLD  AOS will notify the Agency and Vendor  Once new banking is received, AOS will update vendor record and release the HOLD  Scheduled Payment will process in next Pay Cycle  Agencies should not create a new voucher when a payment has bounced back. 15

16.  Agency Program Administrator (or the individual holding receipts) must complete State Form 54809 (9-11)  Need to pay from the Central Bill  Bill must be paid in full each month  Vouchers and/or distribution lines should be in order of the Central Bill.  P/Card and T/Card purchases needs to be on separate vouchers.  Lodging receipts are required to be submitted with the Central Bill 16

17.  No invoices should be paid by the P/Card – pay through AOS first  No QPA items  No asset Purchases  No purchase over $500 unless IDOA has granted an exception  No Artificially dividing purchases to stay under the $500 single purchase limit  Please refer to the P/Card Manual posted on the IDOA website 17

19.  Vendor Guidelines  Vendor Returns  Location Information  “No AUDITOR OF STATE Payments” address  Two Party Payments 19

20. 20  All Vendor Information Forms (VI forms – SF53788 (R2/10-09)) must be signed and dated within the last 6 months. Former VI versions are shredded upon receipt.  Send all forms to the AOS service center via US Mail or inter-department mail.  Emergency additions may be submitted with prior approval from Maegan or Jessica. Forms received via email without prior approval will be deleted.  The form must be complete and legible.  For change of address and/or bank info, mark the VI form ‘change of address and/or bank’ and reference the old information. In the event of a typographical error, an email will suffice.  Employee VI forms must be submitted AFTER the employee receives their first state paycheck.

21. 21  The banking portion of the VI Form must be filled out by the bank or a matching, unaltered, voided vendor check can be attached to Section 2.  The check must not cover the ‘foreign bank account’ check box.  AOS will not accept starter checks, checks that have handwritten addresses, deposit slips, or checks copied onto the back of the form. Attach checks to a second page if necessary and staple the two pages together in the top left corner not the bottom of the page, or left side of the page, or the middle of the page.  Each agency is responsible for all correspondence with their vendor. Please request all vendor forms be returned to your agency when requesting vendor information. This will help you track the form through the system.

22. 22 Write your BU# in the top right corner of the vendor form and bad forms will be returned to your agency. If a BU is not notated, wrong vendor forms will go back to the vendor if a complete address is given. Here is our Vendor Form Return Sheet. Please use this as a helpful tool when submitting forms or checking to see why forms haven't been entered. Do not use this form as your own, only AOS can mail this out.

23.  Returns are done at least once a week.  Here are common errors made by agencies that are returned:  Agencies CAN NOT ALTER vendor forms!!!!!  Incomplete addresses  No signatures or no bank info  Addresses don’t match  ILLEGIBLE/ FORM NOT ABLE TO BE READ  Not an employee (has not received their first paycheck)  No legal name on the form  Change which address or bank?  Foreign bank check box must be visible 23

24. 24  Vendor Conversion and regular AOS entry set up locations named REMIT 001, REMIT 002, REMITXXX, etc. The remit locations contain vendor bank information.  For normal AP Vouchers select a REMITXXX location and update the remit address to correspond with Vendor Invoice. Do not rely on the default address to tell you which REMITXXX location to use.  If you are not sure which REMITXXX location to select, please confirm the information with your vendor.  If you have specific questions, please stay after the town hall for one on one help.

25. 25  Definition  ‘No Auditor of State Payment’- Address is not a valid payment address. This could be because the address is used for order purposes only by procurement agents or there is not corresponding bank information from the vendor.  Remedy  If the address you want to use has a ‘No Auditor of State Payment’ description, you must contact the vendor and get a new Vendor Information form (SF53788) with banking information in order to make it available for remit by AOS.  NOTE: THIS DESCRIPTION IS NEVER USED TO DESCRIBE A LOCATION.

26. 26  E-mail: vendors@auditor.in.gov with ‘Two Party Payments/Settlement’ in the subject line 48 hours prior to Voucher entry.  If this is your first 2 party/settlement payment, ask for a template form and further instructions.

27. Mary ReillyDirector of Accounts Payablemreilly@auditor.in.gov233-5763 Kathy FrickAssistant Director of Accounts Payablekfrick@auditor.in.gov232-4736 Greg PiersallACH Coordinatorgpiersall@auditor.in.gov234-1024 Jessica GillumVendor Administratorjgillum@auditor.in.gov232-3302 Maegan Walker OttenLevy/Vendor Administratormwalker@auditor.in.gov233-2674 Tim McCartyAudit/Payment Specialisttmccarty@auditor.in.gov232-3326 Danielle BurchellAudit/Payment/Levy Specialistdburchell@auditor.in.gov232-3323 Tyler ThomenAudit/Payment Specialisttthomen@auditor.in.gov232-3312 Margo IvoryAudit/Payment Specialistmivory@auditor.in.gov233-5616 Jackie CarrLost Warrant Coordinatorjcarr@auditor.in.gov233-6220 Joey WilliamsResearch Coordinatorjwilliams@auditor.in.gov233-2341 Cozette BrownService Center Representativecbrown@auditor.in.gov234-1128

29. 29  Report to vendors and IRS of calendar year payments  IRS rules establish  When 1099 reporting is required  Required for payments made in the course of a trade or business  What vendors are included  All vendors included unless specifically excluded by IRS rules  What payments are included  All payments included unless specifically excluded by IRS rules

30. 30  Vendors in PeopleSoft are classified according to IRS classification rules and a 1099 reporting status code is assigned to the vendor  The 1099 Reporting Status Codes currently in use are  EXMPT  Used for tax exempt and government entities  CORP  Used for incorporated entities  OTHRR  Used for all other entities

31. 31  All general ledger accounts in PeopleSoft are assigned 1099 reporting codes in accordance with IRS reporting rules and IRS payment categories  1099 Reporting Codes currently in use are  RE for rent payments  MH for medical services payments  NC for payments for services provided by non-employees  SP for lawsuit settlement payments to attorneys  LA for land acquisition payments  PA for all other 1099 reportable payments  NO for non-reportable payments

32. 32  The 1099 codes are referred to as 1099 code attributes  There is a 1099 code matrix for every account  The 1099 code matrix is the combination of vendor status codes and account 1099 codes  In other words for every account there is a 1099 code associated to each vendor status because the 1099 reporting does vary by vendor status  The 1099 code associated to the OTHRR vendor status is considered the primary 1099 code for the account

33. 33  From the ENCOMPASS Project Home Page you can navigate to an Excel worksheet containing all accounts and the 1099 code attributes  The navigation is  ENCOMPASS Documents  Chart of Accounts  ACCOUNT_ATTRIBUTES_(date)  Later in this presentation Fred will demonstrate using the worksheet  Don’t find an account that fits your need, then submit a GMIS issue  Questions send to A ccountingDept@auditor.in.gov

34. 34  1099 reporting transactions are built though out the calendar year by capturing payments coded 1099 reportable  In January a Form 1099MISC is sent to the vendor for reportable payments other than land acquisition payments  If the payment was a land acquisition payment, then a Form 1099S is sent to the vendor  Both Form 1099MISC and Form 1099S are sent electronically to the IRS

35.  Scenario A – Vendor A is providing a training course on Time Management. The course will cost $5000. The State will pay Vendor A directly.  Scenario B – Employee B went to a training course on Time Management. The course was $700. She paid the Vendor directly and is seeking reimbursement from the State. 35 What account codes should be used for these two scenarios?

36. 36 http://myshare.in.gov/SBA/encompass/Shared%20Documents/Forms/AllItems. aspx?RootFolder=%2fSBA%2fencompass%2fShared%20Documents%2fChar t%20of%20Accounts&FolderCTID=&View=%7bF028AA1A%2d92F6%2d481F %2dAD3C%2dA6A404494279%7d

37. 37 GL_ACCOUNT_TBL_120112

38. 38 ACCOUNT_ATTRIBUTES_120112

39.  Scenario A – Vendor A will be paid using account 535014.  Scenario B – Employee B will be reimbursed using account 581020. If account 535014 was used, then a 1099 would be generated and sent to Employee B for $700. 39

40.  Scenario C – Employee C occasionally buys postage materials for his agency on his way to work. Over the last year, he has paid $825 to USPS, and was reimbursed by the State. 40 What account codes should be used for this scenario?

41. 41 GL_ACCOUNT_TBL_120112

42. 42 ACCOUNT_ATTRIBUTES_120112

43.  Scenario C – Whenever possible, the State should buy its own supplies and should pay USPS directly. If account 599036 was used for these “reimbursements,” then a 1099 would be generated and sent to Employee C for $850. 43

44.  Review the accounts that you are using  Account codes can have similar descriptions, but significantly different 1099 attributes  Review your policy for reimbursement  State should pay vendors directly whenever possible  Account attributes are on the Encompass website  Focus on the OTHRR attribute  Account 1099 Attribute questions can be directed to AccountingDept@auditor.in.govAccountingDept@auditor.in.gov  Account questions, unrelated to 1099 attributes, will continue to be directed to Mary Reilly 44

46. 46  IRS does not classify a worker based on the title a business gives a worker (employee or independent contractor)  IRS worker classification is based on the business relationship  Important to IRS because IRS requires FICA, Medicare and Withholding Taxes to be paid on employees, not required on independent contractors  If it’s important to the IRS, it’s important to us

47. 47  Common-Law Rules used to classify workers  Behavioral control  Financial control  Type of relationship

48. 48  Instructions to the worker about  When the work is done  Where the work is done  How to work

49. 49  Facts that show whether the business has the right to control the business aspects of the worker’s job  The extent to which the worker has unreimbursed business expenses  The extent of the workers investment  The extent to which the worker makes his or her services available to the relevant market  How the worker is paid  The extent to which the worker can realize a profit or loss

50. 50  Facts that show the parties’ type of relationship  Written contract describing the relationship the parties intended to create  Whether or not the worker is provided employee type benefits  The permanency of the relationship  The extent to which the worker’s services are a key aspect of the regular business of the company

51. 51  Future personal services contract documents will contain a document addressing  Behavioral control  Financial control  Type of relationship  The document must be completed by the contracting agency  If the worker’s classification is unclear, then classify the worker as an employee  Send questions to AccountingDept@auditor.in.gov

52. Agency specific questions – please stay after Town Hall