19.01 Segregation of Duties

1. If your department lacks sufficient personnel to segregate the responsibilities outlined in this policy, send a memo detailing your proposal of alternative controls to Payroll. Proposals for alternative controls will be approved by the Financial Services Office-Operations manager on a case- by- case basis. NOTE: If you need assistance proposing alternative segregation of duties, contact Operations at payrollinfo@listserv.arizona.edu.

   Definitions

2. The Employee Time Record is the University's official time and attendance record in case of an audit and meets the requirements of the Fair Labor Standards Act (FLSA). The Human Resources Department has published guidelines for departments who wish to develop an alternative time record at http://www.hr.arizona.edu/09_rel/policies/atrguidelines.php. Employee Time Records, BETRs, and Alternative Time Records will be referred to as ETRs. ETRs must be available for audit and must be retained for a minimum period of eight years, or possibly longer, as in the case of Sponsored Research. (Refer to the Records Retention policy).

   The ETR is used by employees and supervisors to record time worked and leave taken. It is also the source document for completing the Time Roster. For more information on the ETR, refer to Employee Time Keeping Records.

3. Employees will receive their paycheck in one of three forms:
   
   a. State Warrant - Checks issued on the State of Arizona's bank account.
   
   b. Advice of Deposit - Payment issued by employee's selection of direct deposit.
   
   c. Hand-Drawn Check - Manual checks issued on the University of Arizona bank accounts.
   

   Each department should have a Paycheck distribution policy. For more information, refer to 19.31, Paychecks.

4. The Time Roster is a file of all departmental employees who are scheduled to be paid for a particular bi-weekly pay cycle. Refer to 19.22, Payroll Time Roster for more information on Time Rosters.

5. The Payroll Expenditure Listing (PEL) is a financial accounting report that details payroll expense activity by department for a specified pay period. For more information on PELs, refer to 16.52, Payroll Expenditure Listing.

6. Payroll Expenditure Transfer (PET) is used to correct financial expenditures previously reported payroll system. For more information on PETs, refer to the PET homepage.

7. Payroll Online Payment Request (POPR) is used to report hours worked in a previous pay period but not yet paid. For more information on POPRs, refer to http://www.fso.arizona.edu/fso/payroll/training/Payroll_online_Payment_request_Form.doc
   
   Policies
   
8. Each department shall designate different individuals to perform the following Payroll functions. If possible, backups should be assigned for each. To request an exception to these requirements refer to paragraph 1.

   Individual	Duties
   Payroll Representative	Maintain Employee Time Records for all employees Enter time reported and leave taken on screen 45, Time Roster. Review time reported and leave taken using screen 47, On-line Time Roster Department Paging. Reconcile the Payroll Expenditure Listing (PEL) to the ETRs and POPRs. Create Payroll Expenditure Transfers (PET).
   Authorized Payroll Approver	Verify time reported and leave taken using screen 47, Time Roster Department Paging, against source documents. Approve Time Roster using screen 48, On-Line Time Roster Batch Authorization. Review Payroll Expenditure Listing (PEL) for accuracy. Approve Payroll Expenditure Transfers (PET).
   Paycheck Distributor	Distributes paychecks - See below for limitations of who may be assigned this responsibility.

9. All employees who work for a department must have his or her time accounted for by an individual who knows or is in a position to know if the time recorded for those persons is correct. The designated individual is usually the employee's supervisor.

10. The Payroll Representative ensures that the time on the Employee Time Record is reported correctly and is approved by both employee and supervisor to indicate agreement with the hours recorded and that the appropriate amounts are charged to the appropriate account (i.e., the salaries and wages charged represent the proportionate share of effort that directly benefits the account or activity).

11. The person who data enters the employees time into the Time Roster Percent Distribution screen (45), cannot be the same person who approves the Time Roster Batch Authorization screen (48), in the same biweekly pay period.

12. Paycheck distribution can be done by several individuals, but it cannot be a supervisor or the persons directly involved in processing or approving the Time Roster, unless alternate controls have been pre-approved by Operations, see paragraph 1. This person should also distribute annual IRS Form W-2's 2's & 1042-S’s.

13. Paychecks shall be distributed only to the employee. Paychecks should not be placed in the employee's campus mailbox or given to anyone else unless authorized per 19.31, Paychecks.

14. The Dean, Director, Department Head or his/her designee should review and reconcile the department's payroll expense transactions on the  Payroll Expenditure Listings (PEL) to the Time Roster and/or Payroll Online Payment Requests (POPRs) to assure that the wages posted to the financial accounts for the pay period are accurate.

15. The person who creates Payroll Expenditure Transfers (PETs) should not be the person who approves them.

16. Departmental management is ultimately in charge of designating these functions appropriately.

    Responsibilities

    Payroll Representative

17. Two individuals should be assigned the task of a payroll representative, one primary and one backup. The Payroll Representative's responsibilities are to:

    1. Collect the completed and approved biweekly ETRs for each employee by the departmental deadline.
       
    2. Verify that the ETR has been signed by the supervisor and the employee to indicate agreement with the hours recorded and the accrued leave balances.

    3. Verify that the employee has sufficient leave balances for requested leave time.

    4. Calculate the total number of hours worked and leave recorded on the ETR from the beginning of the pay period to the end of the pay period to validate the hours.

    5. If a department uses leave request forms, retain any forms that are signed by the employee and the employee's direct supervisor to support the leave hours recorded on the ETR or time card/sheet.

    6. Use screen 45, Time Roster Percent Distribution, to enter employees' time and leave taken as reported on the time card/sheets, ETRs and leave request forms.

    7. Use screen 47, Time Roster Paging, to review and verify hours entered on screen 45.

    8. Notify the Authorized Payroll Approver when the data entry and review process is complete.

    9. Reconcile the Payroll Expenditure Listing (PEL) to the Time Roster and/or POPRs to ensure that no one has been underpaid or overpaid and that all leave has been reflected in the system accurately.

    10. Correct any errors due to shorted hours by using a POPR.

    11. Correct any errors of under/over reported vacation, sick or comp time hours by using a Vacation/Sick/Comp Leave Hours Adjustment Form.

    12. Correct financial transaction errors by using a Payroll Expenditure Transfer (PET).

    Authorized Payroll Approver

18. Two individuals should be assigned this task, one primary and one backup. These individuals should be separate from the individuals who have been designated to enter time on Screen 45 or create PETs. The Authorized Payroll Approver's responsibilities are to:

    1. Use Screen 47, Time Roster Department Paging, to compare the time roster hours to the source documents.

    2. Verify that the appropriate amounts are charged to the appropriate account (i.e., the salaries and wages charged represent the proportionate share of effort that directly benefits the account or activity).

    3. If all records agree, approve the Time Roster on Screen 48, Time Roster Batch Authorization.

    4. If a record does not agree, bring it to the attention of the individual who entered the record. Once corrected, verify the record for accuracy and approve the Time Roster.

    5. Review the Payroll Expenditure Listing for accuracy.

    6. Approve Payroll Expenditure Transfers created by the Payroll Representative.

    Paycheck Distributor

19. Paycheck distribution can be done by several individuals, but it cannot be a supervisor or the persons directly involved in processing or approving the Time Roster. The Paycheck Distributor's responsibilities are to:
    1. Verify that each employee has a paycheck by checking the Final Online Time Roster or by checking a list provided by the Payroll Representative.

    2. If the employee receiving a paycheck is not not known to the distributor, request picture identification before giving the paycheck to the employee.

    3. Distribute paychecks only to the employee. Paychecks should not be placed in the employee's campus mailbox or given to anyone else unless authorized per 19.31, Paychecks. .

    4. Return paychecks not distributed 30 days after the issuance date to Operations, refer to 19.31, Paychecks, for additional information.

    Supervisor

20. The supervisor's responsibilities are to:
    1. Submit all approved ETRs to the Payroll Representative in adherence with the department's deadlines.

    2. When departmental business practice guides you to approve leave slips, submit all approved leave requests to the Payroll Representative as soon as received.

    3. Initial the ETR each pay period to indicate agreement with the time recorded and the accrued leave balances.

    4. Notify the Payroll Representative of any employee who terminates when the termination occurs.

    Employee

21. The employee's responsibilities are to:
    1. Submit the completed and signed ETR to the supervisor by the scheduled deadline.

    2. Initial the Employee Time Record each pay period to indicate agreement with the time recorded and the accrued leave balances.

    3. When departmental business practice guides you to prepare a leave slip, provide your supervisor or Payroll Representative with the leave slip for any leave taken. Your supervisor will approve and forward leave slips to the Payroll Representative. Refer to Request for Leave Form Sample, 19.33.5

    4. Notify your supervisor in writing of your intention to terminate or retire as soon as possible.

    Time Roster Security/Access Form

22. If your department needs to make changes, contact Operations. You will be asked to complete a Time Roster Security/Access Form to add, modify or delete security access and to return the approved form to FSO-Operations, University Services Building, Room 402; PO Box 210158, Campus.

maintained by: Jenny Ruiz
last reviewed: 6/30/04