UC Santa Barbara Policy 5155
Policies
Issuing Unit: Administrative Services Date:
DEPARTMENTAL PAYROLLS--INTERNAL CONTROL STANDARDS
I. REFERENCES:
A. University of California Business and Finance Bulletin, IA-101,
Internal Control Standards, Departmental Payrolls
B. University of California Accounting Manual, Chapter G173-15,
Check Stock Control
C. University of California Accounting Manual, Chapter P-196-13,
Attendance, Time Reporting and Leave Accrual Records
D. University of California Staff Personnel Policy 606, Attendance
Records
II. INTRODUCTION:
The following control standards apply to the payroll functions of
departments and other administrative units. Payroll functions
include the preparation and approval of personnel action forms
including those for employment, change, and separation actions; and
record maintenance, approval, and reporting related to time worked,
absences, and sick leave and vacation accrual.
The control standards are presented in terms of the most desirable
operating conditions. There may be situations when optimum
conditions are not attainable or when existing conditions may
provide adequate control within the intent of the standards. In such
situations, variance from these control standards must have the
written approval of the Chancellor. Authority to approve variances
may be delegated to the Vice Chancellor level.
III. CONTROL STANDARDS:
A. Approval Authorizations
1. Signature authorization or cancellation forms specifying
payroll approval authority shall be signed by department
chairpersons or administrators at a similar level and
filed with the campus Accounting Office. Notification of
changes in delegation of this authority shall be submitted
promptly to the Accounting Office.
2. Personnel action forms and other payroll documents shall
be approved only by a University employee to whom the
authority has been formally delegated.
3. An employee authorized to approve payroll documents shall
not be responsible for reviewing Distribution of Payroll
Expense reports (PPP5302) or for distributing payroll
checks.
4. An employee shall not approve documents which affect the
employee's own pay. Formal approval at a higher
administrative level is required.
B. Time and Absence Reporting and Recording
1. Time reported for pay purposes shall be in accordance with
University policy. Time reported for pay purposes may
include, but is not limited to, the following: regular
hours worked, paid holidays, earned vacation or sick leave
taken. (Note: An employee may be eligible to receive
compensation which is not directly related to time
reporting. Such compensation may include, but is not
limited to, the following: specialty pay, holiday
premiums, special performance awards).
2. Time worked and absences will be reported after the fact.
If reporting deadlines require the estimating of time to
the end of the reporting period, adequate control shall be
maintained to ensure that appropriate adjustments are made
for differences between estimated and actual time worked.
3. Overtime shall not be worked unless approved in advance by
the appropriate vice chancellor, dean or department head.
Overtime worked in emergency situations should be approved
on an after-the-fact basis. The approval requirements
pertain to paid overtime and to overtime compensated by
time off.
4. Records of overtime worked each day shall be maintained.
For employees in classes eligible for premium overtime,
overtime worked must be designated either as overtime
earned at the straight-time rate or as overtime earned at
the premium rate. Similarly, compensatory time off records
must distinguish between compensatory time off for
overtime earned at the straight-time rate and compensatory
time off for overtime earned at the premium rate.
5. Alterations made in pay status (personnel action forms) or
time worked records (payroll time sheets and special
payrolls) shall be formally approved by an authorized
individual.
6. Daily attendance and job time records, including sick
leave and vacation accrual records, shall be maintained on
a formal and current basis. Individual attendance and job
time records shall be approved by the employee's
supervisor and shall not be returned to the employee after
supervisory approval.
7. Procedures and controls shall be established to prevent
the issuance of improper payroll checks to employees who
have been terminated, demoted, placed on leave without
pay, or otherwise placed in any status under which full
standard pay is not to be received.
C. Departmental Check Distribution
1. Payroll checks shall be distributed in accordance with
check disposition forms signed by the employees, within
the distribution options provided by campus policy (direct
deposit to bank through Surepay or check delivery to
department).
2. Checks awaiting distribution to employees shall be kept in
locked storage accessible only to a check custodian and an
alternate who have been formally assigned responsibility
for the checks.
3. Custodians who release checks or Surepay statements to
employees not known to them shall require presentation of
proper identification before checks are released.
4. When a check or Surepay statement is released to someone
other than the payee, the custodian shall: (1) require
proper identification, (2) require an authorization signed
by the payee to release the check, and (3) obtain a signed
receipt which will be retained by the custodian.
5. An employee who distributes payroll checks shall not be
authorized to approve payroll documents or to review the
Distribution of Payroll Expense reports.
6. Unclaimed payroll checks and Surepay statements delivered
to departments for distribution to employees shall be
promptly returned to the campus Accounting Office with an
explanation of the department's inability to distribute
the checks.
D. Review of Distribution of Payroll Expense Reports
1. As a normal administrative control procedure, departments
are expected to review the validity of payroll payments
charged to their accounts. To assure that the payroll
charges are reviewed, departments are expected to
establish necessary internal procedures. One of several
possible methods of assuring that such reviews are
documented is to require the responsible staff member
assigned the review function to sign the Distribution of
Payroll Expense and indicate the date of review.
2. Responsibility for reviewing the Distribution of Payroll
reports shall not be assigned to an employee who approves
documents or distributes payroll checks.
For questions or comments regarding the format of the above information, please contact webcontact@ucsbuxa.ucsb.edu.
Last Modified By: HMW, 5/21/97
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