Owner: 2012-2016 Business Plan Summary Program Corporate, Operational & Council Services Service grouping Corporate Services Service Type Internal Service Julie Kovacs, Manager Systems and Development, Finance Strategic Priority Good government Purpose To provide accurate and timely payroll processing of employees' pay and benefits to support all City departments' employees and retirees. Key processes Corporate Processing Financial & Staffing In $000s Operating budget 2010 Actual 2011 Revised Budget Expenditure: 1,108 1,067 Non-tax revenue: 126 129 Net (tax supported): Capital budget Expenditure: Non-tax revenue: Net (tax supported): 2010 Revised Budget 982 938 2011 Revised Budget 0 0 Staffing FTEs: 14.0 13.0 Percentage of expenditures budget (all rate sources): Annual per household cost of net budget ($): Operations is responsible for the data entry and verification of employee and retiree master file information including the setup and maintenance of employee schedules to facilitate exception recording and time sheet data entry. Other core payroll responsibilities include: the processing of mandatory and voluntary employee deductions, calculating and processing special payments and retroactive adjustments and the administration of accrual entitlements (ie sick leave, vacation). 0.14 0.13 5.92 5.59 All transactions are reviewed to ensure payroll direct deposits, manual cheques and/or pre-authorized payments are accurate and on-time. Corporate Systems Maintenance and Development The Systems team is responsible to setup and maintain the payroll and scheduling systems in compliance with collective agreements and legislative requirements for all pay, benefits, deductions and accruals. Page 1 of 6
Statutory Reporting The following reporting of payroll related information is required in order to comply with payroll legislation: Records of Employment, T4, T4A, OMERs Annual 119 Report and notes to the financial statements. Payment and Reconciliation of Liabilities Prepare and remit payments due to third parties resulting from payroll deductions and employer contributions within deadlines to avoid penalties and interest. Payments are reconciled back to deductions or third party invoices. Regulatory/Policy landscape Service Delivery method Discretionary Legislative New council direction, new regulations, legislative changes Current state of this service Core payroll processing services for approximately 5,000 employees per year are centralized at City Hall for all civic departments as well as London Police and Tourism London. Effective December 23, 2010, the London Public Library payroll is no longer processed at City Hall. Our primary challenge over the last year has been to maintain and upgrade the City's payroll and attendance software: JD Edwards, Vertex and Kronos while continuing to support payroll operations and reporting functions. Both JD Edwards and Kronos systems have required significant payroll resources for testing and implementation purposes in order to comply with legislation and maintain product support with our vendors. The knowledge transfer from Systems staff to Operations staff is enabling the Operations area to become more self sufficient and less reliant on the Systems area. This optimization of Operations is very important as the Systems area will be heavily involved in the JD upgrade in 2011-2012 without backfilling these key positions. Recent enhancements to economy, efficiency and effectiveness Automated data collection of hours worked using time clocks was successfully implemented at Dearness during the Kronos 6.1 System Upgrade in November 2010. This initiative has encouraged more accountability from employees and provided more timely attendance reporting for management. Process improvements relating to the payment of payroll liabilities to key vendors such as OMERS and Family Support were automated using EFT for payments and electronic backup documents. Process improvements relating to the rehire process for temporary and casual employees were developed by using the existing information from JD Edwards to produce pre -printed rehire forms to capture only new or changed information, thereby, reducing the administrative effort required for processing. staff continue to offer assistance during the casual orientation process to further streamline the required administrative tasks. Page 2 of 6
Future direction of this service We will continue to review business process opportunities with key stakeholders (Human Resources, Finance) and common customers (departments, managers, employees) to move toward a more customer centric approach to the delivery of payroll services. This strategy will include the deployment of technology enablers such as self -service functionality. The implementation of many payroll best practices is dependent on further automation to collect data at source by the source instead of the existing paper based data collection methods used by the City. Specifically, Kronos on-line time and attendance reporting will be rolled out for Local 101 and Management employees in 2011.The JD Edwards software upgrade will be completed in 2012. Objectives next 4 years JD Edwards 9.0 Upgrade - and HR Modules Upgrade existing JD Edwards XE system to web based 9.0 version to maintain system support. This upgrade is also required to maintain legislative compliance. This upgrade is critical to continue to pay employees correctly and on-time as well as to develop the foundation for HR modules to be developed. Expected completion year 2012 Actions Division responsible Dedicated resources from both and Human Resources will be required for detailed testing and implementation as follows: Train Project Team Members. Review current /HR system setup. Review new requirements identified prior to the commencement of the project. Test existing /HR setup. Modify existing /HR setup to incorporate new requirements. Test modified setup. Review standard reports. Update documentation and training manuals. Provide Training to Users. Go-live with JDE 9.0 with as-is functionality. Phase-in implementation of new HR modules. Employees continue to be paid correctly and on-time without incurring penalties and negative publicity. Some HR modules can be introduced within 12 months of go-live. Automate Time Sheet Data Collection for All Employee Groups Implement an automated process for time detail and attendance data collection for Local 101 and Management employees in 2011; Local 107 and casual employees by the end of 2013. Expected completion year 2013 Division responsible Page 3 of 6
Actions Identify unique requirements for each group of employees. Identify options and related cost for each alternative. Explore potential labour relations issues relating to each option. Prioritize options and select best alternative to meet needs. Obtain budget approval if additional funding is required. Setup new data collection methods for testing. Test and pilot new data collection methods. Implement new data collection method using a phased-in approach. Manual time sheets eliminated with real time access to information as follows: 2011-Local 101 and Management (1 FTE = $60,000) 2012-Casual employees 2013-Local 107 employees Automate Payment of Liabilities Eliminate the need for manual vouchers to process payment of payroll liabilities. Expected completion year Division responsible 2013 Actions This objective is contingent on the successful upgrade of JD Edwards. Reduce administrative effort and paper related to payment of payroll liabilities. Automate Data Entry and Maintenance of Employee Master file Information in JD Edwards Decentralize the data entry and maintenance of employee information in JD Edwards by enabling workflow and self-service features to reduce the volume of paper generated. This objective is a joint venture between Human Resources and. Expected completion year 2014 Division responsible Actions Further process review is required in order to identify a detailed action plan. Reduce manual forms and duplicate data entry. Improved access to payroll data for both managers and employees. Emerging issues and challenges Legislation JD Edwards payroll software must be updated by July 2013 in order to maintain legislative compliance. Changes to CPP legislation are anticipated for January 1, 2012. Other Kronos version 6.1 software must be updated by December 2013 in order to maintain vendor support of our corporate time and attendance system. Page 4 of 6
2012-2016 Service changes with financial impact (+/-) Statistics and performance measures A Activity measures Number of Direct Deposits 129,921 132,902 135,407 142,516 139,968 142,068 141,406 135,064 137,090 139,146 144,233 141,188 143,306 Increase in 2008 relates to one additional pay in the year (27 bi-weekly pays instead of 26). Decrease in 2011 relates to the cessation of Library payroll processing on Dec 31/10. Increase in 2014 relates to one additional pay in the year (27 bi-weekly pays instead of 26). Number of T4s/T4As 5,431 5,550 5,773 5,878 5,832 5,919 5,995 5,513 5,596 5,680 5,765 5,851 5,939 Decrease in 2011 relates to the cessation of Library payroll processing on Dec 31/10. Number of Records of Employment 1,569 1,494 1,253 1,315 1,529 1,590 1,577 2,040 1,706 1,774 1,845 1,919 1,996 Increase in 2011 relates to the cessation of Library payroll processing on Dec 31/10 which requires records of employment to be issued to all Library employees. B Efficiency measures Cost Per Direct Deposit and Manual Cheque 4.66 5.11 5.26 5.11 5.15 5.17 5.44 5.55 5.58 5.61 5.52 5.75 5.78 OMBI Measure FPRL306A defined as follows: All payroll related operating costs (based on 7.25 FTE) divided by the total number of direct deposits and manual cheques issued in the calendar year. Page 5 of 6
Number of Direct Deposits and Manual Cheques Per FTE 16,280 18,373 18,732 19,523 19,323 19,596 19,533 18,630 18,909 19,193 19,894 19,474 19,766 Decrease in 2011 relates to the cessation of Library payroll processing on Dec 31/10. C Effectiveness/Quality/Satisfaction measures Number of Manual Cheques Issued 184 182 197 147 124 123 133 117 111 105 100 95 90 Decrease in 2008 and future years relates to process change for payroll direct deposits returned due to closed bank accounts. Replacement cheques for the net amount issued through accounts payable instead of payroll to reduce administrative work effort. Page 6 of 6