FAS for Payroll Key Internal Controls FAS Accounting ...

1 1 FACULTY OF ARTS AND SCIENCES OFFICE OF FINANCE HARVARD UNIVERSITY Series: Finance & Accounting Policy Title: Payroll Key Controls FAS Procedures for Payroll Key Internal Controls Effective Date: April 1, 2009 Revision Date: January 13, 2021 Responsible Office: FAS Office of Finance Contents: I. Purpose II. Roles and Responsibilities III. Key Internal Controls and Procedures A. Summary of Reporting Responsibilities B. Changes to Employee Master File C. Payroll Register* (Cost Center Register by EE) Review D. Time Reporting and Approved and Unapproved Time Review E.

2 Additional Pay Requests and Off-Cycle Payroll Register Review IV. Contacts V. Appendix A Aurora Controls Matrix VI. Appendix B Payroll Register Report Instructions I. Purpose The Office of the Controller has identified four key Internal Controls for Payroll . These Internal Controls , when met, will satisfy control testing by Risk Management and the University s external auditors. This document establishes procedures based on best practices for FAS tubs, departments, and centers in order to meet these key Internal Controls . II.

3 Roles and Responsibilities The Office of the Controller is responsible for: Communicating key Internal Controls required by the University; and Reconciling the Payroll registers to the general ledger at the University level. The FAS Office of Finance is responsible for: Establishing policies and procedures for implementing key Internal Controls . Communicating guidance to tubs, departments, and centers to ensure key Internal control objectives are met. Working with tubs, departments, and centers to resolve Payroll issues as appropriate.

4 Reviewing and approving Payroll reports assigned to FAS Payroll Services in accordance with this document and maintaining evidence of their review and approval. Tub financial officers and department and center administrators are responsible for: Understanding the Payroll key Internal Controls requirements. Implementing policies and procedures for monitoring local Payroll processes to ensure key Internal control objectives are met. Resolving Payroll issues as appropriate. Assigning a hierarchy of responsibility within each tub, department, or center to ensure timely review and approval by appropriate individuals of Payroll reports assigned to tubs, departments, and centers in accordance with this document.

5 Maintaining evidence of the timely review and approval of the Payroll reports assigned to tubs, departments, and centers. * Commonly referred to as the Payroll Register, the actual report in PeopleSoft is the Cost Center Register by EE. 2 III. Key Internal Controls and Procedures A. Summary of Reporting Responsibilities TUBS, DEPARTMENTS, CENTERS Report Employee Types Timing to Run the Report Review/ Approval Retain Retention Period REQUIRED PeopleSoft Reports Payroll Register (Cost Center Register by EE) All faculty and staff, excluding senior faculty Twice: At the opening of each Payroll and again after each Payroll has closed Tub, Dept.

6 Or Center Administrators Summary Pages - Signed and Dated Current Fiscal Year Audit Period1 RECOMMENDED PeopleSoft Reports Reported Time Status (Needs Approval) All time-reporting staff Afternoon prior to opening of Payroll FAS Payroll Services Coordinators Full Report - Signed and Dated Current Fiscal Year Audit Period1 Payable Time Less Than Scheduled Hours (TL Possible Underpayment Rpt) Biweekly Time Reporters Afternoon prior to opening of Payroll FAS Payroll Services Coordinators Full Report - Signed and Dated Current Fiscal Year Audit Period1 Personnel Action History All faculty and staff, excluding senior faculty Prior to the opening of the Payroll Tub, Dept.

7 Or Center Administrators N/A N/A REVIEW PeopleSoft emails No Reported Time Notification - email from PeopleSoft Biweekly Time Reporters System generated email -multiple times prior to opening of Payroll N/A N/A N/A No Reported Time Notification - email from PeopleSoft Weekly and Biweekly Time Reporters System generated email -multiple times prior to opening of Payroll N/A N/A N/A 3 FAS Payroll SERVICES Report Employee Types Timing to Run the Report Review/ Approval Retain Retention Period REQUIRED PeopleSoft Reports Payroll Register (Cost Center Register by EE) Senior Faculty Twice.

8 At the opening of each Payroll and again after each Payroll has closed Manager of FAS Payroll Services or designee Summary Pages - Signed and Dated Current Fiscal Year Audit Period1 Reported Time Status (Needs Approval) All time-reporting staff Afternoon prior to opening of Payroll FAS Payroll Services Coordinators Full Report - Signed and Dated Current Fiscal Year Audit Period1 Payable Time Less Than Scheduled Hours (TL Possible Underpayment Rpt) Biweekly Time Reporters Afternoon prior to opening of Payroll FAS Payroll Services Coordinators Full Report - Signed and Dated Current Fiscal Year Audit Period1 Off-Cycle Payroll Register All faculty and staff Twice Weekly on the day after off-cycle checks have been processed FAS Payroll Services Coordinators Full Report - Signed and Dated Current Fiscal Year Audit Period1 REVIEW PeopleSoft emails No Reported Time Notification - email from PeopleSoft Biweekly Time Reporters System generated email -multiple times prior to

9 Opening of Payroll N/A N/A N/A No Reported Time Notification - email from PeopleSoft Weekly and Biweekly Time Reporters System generated email -multiple times prior to opening of Payroll N/A N/A N/A B. Changes to Employee Master File 1. control Objective: All changes to employee master files (PeopleSoft records) are reviewed and approved for completeness and accuracy by an appropriate individual prior to the closing of each pay period. Changes to employee master files are supported by an approval document for the following: (1) new hires, (2) terminations, (3) hourly pay rate increases and decreases, and (4) salary increases and decreases.

10 2. Department Responsibility a. Aurora: FAS departments, centers, and tub authorized employees are required to process, review, and approve changes to employee master files in Aurora. Aurora tracks approval workflow and date-stamps all printout or electronic documents which are direct submitted or entered into PeopleSoft by the appropriate back office or FAS Payroll Services. A matrix outlining the general Aurora entry and approval workflow by employee type is included in Appendix A Aurora Controls Matrix. 4 b. Student/Temporary/LHT Quick Hires: FAS tubs, departments, and centers have access to the PeopleSoft Student, Temp and LHT Quick Hires forms.