Budget, Accounting, Payroll

Transcription

1 Budget, Accounting, Payroll I. General Guidance - Authority to Spend after June 30 The Constitution requires appropriations before spending occurs. Without an enacted budget, the Courts will have to determine what limited activities might have to continue. Priority One and Two Critical Services concerning life, health, safety and personal custodial activities will likely continue to operate based on direction from earlier court orders. Support services that are both directly related to priority critical services and are absolutely necessary for the continuation of these priority critical services could also continue to operate. Failure to enact any or all of the FY budgets will have an impact on state services after June 30. This will affect all state agencies and state services for which appropriation bills have not been enacted, and may affect other services for which an appropriation does exist, but which are dependent upon other state services which have not been funded. Where FY 2012 legislative appropriations have not yet been enacted, payments by state agencies and other entities that are funded by direct state appropriations may not be incurred after June 30. This includes not only state employee salaries, but also state contracts for goods or services -- as well as grants to individuals, schools districts or other units of government. FY 2011 obligations for state employee salaries for days worked through June 30, contracts for services or goods through June 30, and other authorized FY 2011 spending incurred by June 30, 2011 will be paid after July 1 although there may be some delays in processing. No additional obligations may be incurred for direct state appropriations beyond June 30 where no FY 2012 funding is available. II. Availability of Financial Systems after June 30 Conversion to the SWIFT system will continue and any financial transaction in FY 2012 will occur in SWIFT. Agencies should assume that the state s financial systems and supporting personnel will not be operating after June 30. Under plans to limit state services to emergency functions, agencies should anticipate limited access to the state accounting and financial systems during the initial periods of a state shutdown. If the systems are determined necessary to support emergency functions, they will operate on a very limited basis upon specific authorization. III. Agency Planning Related to Financial Responsibilities MMB is dependent upon state agencies ensuring that functions required to maintain financial management integrity also receive priority designation in agencies plans. Therefore, agencies are expected to ensure that agency support plans include the minimal level of effort required to: (a) Process payments so that the most critical priority services continue. (b) Prepare to prioritize payments if necessary due to limited resources. (c) Place priority on payroll activities directly related to paying employees, primarily time entry and direct deposit changes, and secondarily, labor distribution and business expenses. (d) Continue to deposit funds daily and enter corresponding MAPS transactions. (e) Monitor spending related to the shutdown.

2 Budgeting How will costs of any priority one or two critical services be paid for in the event of a full partial shutdown after June 30? 6/22/11 For programs requiring direct appropriations that have not been enacted, a determination of critical functions will be made through gubernatorial action, legislative action and/or court orders as was done in the partial shutdown in A listing of critical services and staffing will be developed by the administration for potential executive action, legislative action or any required legal actions necessary to maintain priority critical services. This listing should be the basis for agency budget and financial management planning both for identifying priority services and identifying budget requirements and impacts. The listing of critical services will be the basis of identifying funding levels necessary to continue spending for essential personnel and other expenses - on a limited basis during the initial periods of any potential shutdown. Authorization to continue funding for critical activities will likely be provided by court action as was done in the 2005 partial shutdown. Without a direct appropriation, agencies should plan that other non-critical services will be suspended. In the absence of legislative action, for the purpose of making essential payments to personnel and vendors ordered by court action or other authorizing authorities, agencies will be directed to set up temporary budgets for FY 2012 in SWIFT similar to existing MAPS procedure These budgets would establish temporary appropriation amounts to meet obligations and expected payments only through any specified initial time period for which authority would be provided by court order or other specific authorities. The budget and accounting divisions of MMB will provide additional direction on legal authorities and limits of any temporary budgets that may need to be established, as well as the procedures to accomplish this. However, agencies should anticipate using appropriation accounts currently being established in SWIFT for this purpose. Direct appropriation worksheets would be distributed to establish temporary budgets for critical services. If these actions are required, agencies should plan on submitting required documentation no later than June 29, but no entries would be processed in SWIFT until Friday, July 1. Electronic file formats will be also made available to submit SWIFT expense budgets. In the event of limited funding, agency expense budgets will have to be consistent with the approved priority services plans and within the limits of authorized temporary budget amounts. Agencies should anticipate being able to complete these with the appropriation worksheets, or to directly enter expense budgets after July 1. Is MMB going to make payments on open and standing appropriations (general education and property tax aids & credits) to schools and local governments? 6/22/11 The funding source is not the driving factor as to whether payments will be made or not. For aid payments that require legislative appropriation, payments will not be made until legislative action occurs, or as may be directed by court order. For aid payments with open and standing, dedicated or federal funding, the normal payment schedule could be disrupted [due to suspension of supporting or related state services, the absence of general state administrative services, and potential disruption of

3 access to state offices and facilities]. The decision on the continuation of aid payments will be based on a number of factors, including but not limited to, availability of funds. Will programs funded by dedicated, statutory, or federal funding where no legislative action is required to continue be able to continue to operate on a normal basis after June 30? If so, how will purchases, payments, and payroll transactions be processed? 6/22/11 No, the funding source for programs is not the driving factor in whether activities will be able to continue after June 30th. While the authority may exist for the programs to continue to operate, normal operations may not be possible due to suspension of supporting or related state services, the absence of general state administrative services, and potential disruption of access to state offices and facilities. Any decisions for the continuation of services will be on number of factors, including but not limited to, availability of funds. Employees, vendors and grantees can expect that disruptions may occur in normal payment schedules for affected areas. May dedicated or other funding sources for FY 2012 be reallocated to continue services funded by direct state appropriations? 6/22/11 No. Within existing authorities, agencies may transfer or reallocate funds. But, the potential shutdown does not nullify existing statutes that define limits and restriction on the use of particular funds. In the absence of specific authority, use of funds must be limited to their designated purposes. Is it appropriate to use FY 2011 appropriations to pre-pay July 2011 rent, insurance, or other expenses? 6/22/11 No. If my agency is the recipient of federal grants and the related activities may be impacted by a government shutdown, what should we be communicating to the federal agencies? 6/22/11 Yes, you should be communicating that federal grant related activities will be interrupted in the event of a government shutdown, unless they are deemed a critical service. How should agencies handle federal grant applications that may be due during a state government shutdown? 6/22/11 Agencies should contact the federal funding agency to see what the federal agency may be willing to do to accommodate the state s application for funds in the event of a shutdown. Agencies should specifically ask if they are allowed to submit applications early, with updates to the application at a later date if all data is not yet available, or if an extension to the due date due is possible due to extenuating circumstances. Accounting Services Will the SEMA4, IA Warehouse, MAPS (FY2011) and SWIFT (FY2012) systems be operating during a shutdown? 6/22/11

4 Yes. MAPS and SWIFT will likely remain available during the shutdown to accommodate priority critical services and payment requirements but most likely on a non-routine, limited basis. Agencies should continue to use the systems to track transactions occurring during a shutdown (deposits, P.O.s, etc.). The Department will continue to process employee payroll and human resource transactions for those agencies that have priority one or two critical services. Agencies are expected to continue to input and process staff payroll in the Statewide Employee Management System (SEMA4). This will include processing any time worked prior to the emergency. There will be limited technical support and limited support for security access requests during a shutdown. Therefore, agencies should prepare now by ensuring that agency plans include: Identifying individuals to perform as backup to priority tasks paying close attention to ensure that no individual is given security access that would create an incompatible SEMA4 security role. Training back up personnel. Completing security access requests using current procedures for those individuals in training. Delete the access once training is completed. Documenting critical procedures to be used by backup personnel. Ensuring that the agency technical team is aware of workstation configuration required to run these statewide systems. Will wire transfers be able to be made after June 30? 6/22/11 Yes. Wire transfers entered by June 30 will likely be processed in July on their scheduled date dependent on the availability of state financial systems. Transfers can be entered only for FY 2011 funds or FY 2012 to support authorized critical functions. What will be the status of banking services for both receipts and warrants? 6/22/11 Receipts: The department will continue to process deposits. Agencies are expected to continue to deposit receipts, draw federal funds, invoice customers, and process all related transactions in MAPS/SWIFT. Local units of governments should continue making payments to the state, including ACH payments. Warrants: Warrants, including payroll, will continue to clear. Will the MAPS Inbound Warrant Processing (IWP) and Common Inbound Transactions (CITA) and new SWIFT interface processes be available? 6/22/11 Yes. It is likely that the MAPS IWP and CITA interfaces will be available for FY 2011 payments after June 30 and in SWIFT for FY 2012 payments where funding has been approved. Controls within the interface programs will cancel those files that do not have a valid accounting string (proper spending authority). Payroll Services Will payroll be processed normally for the July 1 paycheck (pay period ending 6/21/11)? 6/22/11

5 There will be no changes that affect the entry, processing, or distribution of payroll for the July 1 paycheck. However, during the week of June 27, labor distribution must be completed on Thursday, June 30, one day earlier than normal. NOTE: This is NOT due to the shutdown, but due to a scheduled system changes relating to the SWIFT project. Will the payroll system be operational during the shutdown? 6/22/11 It is anticipated that the payroll system will be available on a limited basis. Will pay checks be issued to non-critical employees? 6/22/11 Non-critical employees remain in pay status up to and including June 30, 2011, and will receive a full paycheck on July 1 for the time worked between June 8 and June 21 and will receive a partial paycheck on July 15 for the period of June 22 through June 30, If the shutdown occurs, it will fall prior to the end of the pay period. If by June 30th there is no budget in place, should we instruct our employees to complete their timesheets before leaving work that day? If so, should their time be approved before leaving on June 30th? 6/22/11 Agencies should be sure they have paid hours collected and approved for employees not working beyond June 30, no later than their last work day and no later than the pay period end date for employees working on critical functions. What will happen if an employee does not earn enough income to pay for expenses that are taken out of his/her pay check? Will employees be billed for those deductions or would all of those things terminate? 6/22/11 The payroll system has a priority list for deductions which is as follows: 1. Taxes Including Social Security, Medicare, Federal, and State Withholding 2. Garnishments including Child Support Payments 3. Health Care Savings Plan (HCSP) deductions 4. Retirement Deductions 5. Employee and Dependent Health, Dental, and Optional Employee Life Insurance 6. Managerial Life Insurance premiums 7. Union/Association or Fair Share Dues 8. Departmental Deductions 9. Spouse, or Child Life Insurance Premiums 10. Employee and Spouse Accidental Death and Dismemberment Insurance premiums 11. Long Term Care Premium 12. Short Term Disability Premiums 13. Long Term Disability Insurance premiums 14. Pretax Medical Expense Acct Deductions 15. Pretax Dependent Care Account Deductions 16. Health Savings Account (HSA) Deductions

6 17. Pretax Parking/Transit Deductions 18. Parking Fees-Admin Managed 19. Bus Cards 20. Parking Fees-Agency Managed 21. Deferred Compensation & Tax Sheltered Annuity Premiums 22. Charitable Contributions 23. MN Benefit Association (optional insurance). If an employee does not make enough money to cover these deductions, then the deduction is not taken. Please refer to the insurance questions and answers for assistance on the process that will be followed in the event that an employee does make enough money to cover the employee contribution for health insurance. Other deductions may be caught up depending on the vendor and others will be up to the employee if they would like to catch up the missed deduction (for example, deferred compensation). What will an employee have deducted from their paycheck for child support or a garnishment? 6/22/11 All garnishments, including child support, have rules for how a deduction is calculated and the amount of the deduction that may occur. The rules vary based on type of garnishment. Every paycheck processed with a garnishment, or child support has this calculation. During the shutdown, employees with a garnishment or child support will have deductions based on the same process. Should agencies keep attendance logs for critical employees? 6/22/11 No. Timesheets will be the official record. Will business expenses incurred before June 30 be paid if there is a shutdown? 6/22/11 Yes, SEMA4 business expenses will process on the normal schedule. However, agencies should require employees to submit any expenses so the agency can have them approved and entered by June 30. All other business expense reimbursements will be held until after the shutdown has been resolved. MMB has advised agencies to track hours spent working on shutdown planning-related activities. How might this be accomplished? 6/22/11 An entity-wide Project Number, Activity, and Allotment Organization of SDWN has been set up for capturing costs related to Shutdown Planning. Attached is a document that provides an example of a past entity-wide code. The example is from August 2007 and was for the flooding in southeastern Minnesota. The document explains three methods that agencies have for tracking costs: project number, activity code, or allotment organization. SDWN should be used for tracking shutdown planning related costs for FY11. Most employees involved with shutdown planning-related activities will use the normal earnings codes, such as REG, OTR or OT1. Any tracking of the shutdown planning-related activities would be done by using a statewide activity, project or allotment organization in labor distribution. Employees may record the information directly in labor distribution; or the hours may be collected in another manner and recorded in labor distribution by payroll or accounting staff.

7 Agencies using self service time entry may chose to change these employees to Time & Labor Reporters, or employees may report the hours using the Comments function. If the Comments function is utilized; then agency staff may run a report of all self service time entry comments, which can be the source for updating labor distribution. Contracts and Vendor Payments Vendors are concerned about the possible shutdown. What do agencies do if a vendor is concerned about payment or demands payment upon delivery? 6/22/11 The answer will depend on the nature of the payment and the agency s appropriation Generally, vendors should be held to the terms of their contract. Check your contract terms. The Department of Administration has posted additional instructions regarding contract and grants management. Depending on MAPS system availability, payments for FY 2011 will be able to continue to be processed after June 30. Usually payments can be processed in one business day; however, delays may occur where accounting or other support staff may not be available. Special processing will only be considered when absolutely necessary for emergency functions. Contracts and payments for FY 2012 should not be processed where funding has not been approved. Obligations for goods and services authorized as necessary to support critical or emergency functions under the Governor s authority in M.S and potentially by court order, may be incurred and will be paid under those authorities. However, these purchases would be strictly limited to those necessary to support court-order priority one and two critical services. Other Financial Operations and Issues What will be the breadth of MMB other financial operations in the event of a shutdown? 6/22/11 Treasury Operations: The department will continue to provide some Treasury division services to state agencies. Warrant and check cashing services will be suspended for the duration of the shutdown. The following services will be available: Accepting ACH/EFT payment file information and approving them Accepting warrant issued files including: stops, deletes etc. Processing wire transfer requests; and MAPS CRW's Performing daily cash management/investment processes Providing services for tax withholding payments An agency receives checks in the mail, electronic fund transfers, or online payments. In many cases these receipts represent fees, fines, or surcharge associated with agency activities or services such as licensing, fees, or assessments. If the services generating these revenues are not deemed to be critical should an agency make plans to continue staffing required for routine deposit processing of any payments received during any shutdown? 6/22/11

8 No. Guidance provided in the Contingency Planning Guide (pages 8, 11) relating to the processing of deposits is meant to ensure that financial systems and banking activities required to continue to collect major state tax payments, federal reimbursements and tax and other revenue payments remitted by local units of government can continue at a level necessary to fund authorized critical services and spending that may be required during any potential shutdown. American Recovery and Reinvestment Act (ARRA) 1512 Reporting How should agencies handle the American Recovery and Reinvestment Act (ARRA), Section 1512 reporting requirements for the July reporting period? 6/22/11 Agencies should complete the Excel files for their Section 1512 reports by June 30, 2011 with the most accurate information available at that time. The FederalReporting.gov system will not be open for reporting until July 1, 2011 and will close for initial report submissions on July 14, Agencies should do as much work as possible to be prepared to submit reports immediately when state services resume. Because the data may not reflect all activities through June 30, 2011, agencies should take advantage of the continuous update process to make corrections to reports initially submitted during the reporting window. MMB has been in consultation with the Recovery Accountability and Transparency Board about the possibility of requesting a waiver to the July reporting requirements, or allowing for reports to be submitted late, if state services resume after July 14, Beginning the week of June 20, agencies should contact their federal awarding agencies to provide notification that in the event of a state shutdown, Section 1512 reports will not be submitted until state services resume, which may be after the initial reporting window closes on July 14, Grants Will grantees that received advance payment for FY2011 grant activities prior to June 30, 2011 be able to continue work on those agreements after July 1, 2011? 6/22/11 If the grant agreement allows advance payments and the grantee has received the advance payment from the State on or before June 30, 2011, the grantee may continue the activities and duties listed in the grant agreement until the advance payment has been expended. After the grantee has expended all funds received from the State, the grantee may continue remaining work up to the limits of the grant agreement if no state employee review or participation is required to support the work of the grant. However, the grantee must recognize that further payments may be delayed. Will FY2011 funded grant activities paid on a reimbursement basis that have not yet been provided to the grantee be able to continue working after July 1, 2011? 6/22/11 FY2011 approved grant agreements remain in effect and can proceed with local government or nongovernmental entities as long as no state employees are needed to support the work and continuation is not dependent on FY2012 funding or state match. However, the grantee must recognize that reimbursements may be delayed.

9 What should I tell grantees about grants they may have been expecting to be available in the FY biennium? 6/22/11 State agencies do not have general or automatic grant making authority. The authority for grants must be specifically stated in the statutes and is generally directly related to the appropriations that fund them. In the absence of legislation specifically appropriating funds for the continuing operations of state agencies for the next biennium, we do not know what funds will be appropriated for the numerous grant programs supported by state agencies through their community partners. Unless and until a court order provides authority to expend funds on a contract based on a critical function determination, any contract that obligates the state to expend funds must be suspended. Agency determinations regarding critical functions are in process. It is anticipated that the court may authorize very limited expenditures after June 30, 2011 to support critical life, health and safety functions of state government. What payments can be issued to grantees prior to July 1, 2011? 6/22/11 If grantees are eligible for reimbursement prior to June 30, 2011 per the terms of the grant agreement, your agency may consider reminding your grantees to submit their information as soon as possible so you have time to process their request for reimbursement for services provided prior to July 1, 2011, as processing of requests for reimbursements and payments after June 30, 2011 are likely to be delayed. What can I do to assist my grantees? 6/22/11 We encourage you to share information with your grantees as it is made available to you so they can begin their contingency planning. The Department of Administration Informational Bulletin dated June 3, 2011 provides a letter template to be sent to agency grantees. Additional information, such as these FAQ s will also be available on the Office of Grants Management s website at: Additional information about the State of Minnesota s interruption contingency planning is also available at: