PAYROLL ACCOUNTING - OVERVIEW - 8590

(Revised: 09/2020)

The State Controller’s Office (SCO), Uniform State Payroll System, will process each state agency’s/department’s payroll transactions entered by their human resources office and generate the following:

 

• Payment History File - available to the agency/department monthly
• Payroll expenditures and recoveries - posted to each agency/department appropriation in the SCO’s Fiscal System
• Payroll warrants and direct deposits - printed and distributed
• Notice of State Payroll Revolving Fund Transfer, form SM62 (SM62) - printed and distributed

Payroll expenditures listed on the SM62 consist of gross salary plus the state contributions. The state’s contributions include:

• Retirement
• Old-Age, Survivors, and Disability Insurance (OASDI)
• Miscellaneous benefits
• Premium
• Dental and health
• Administration fees

Recoveries to payroll occur when warrants are voided or re-deposited or when overpayments are collected.

The SM62 reports payroll transactions for the agency/department. See SAM section 10504 for accounting entries to record payroll expenditures.

Payroll Clearance Type Codes

The SM62 reflects Clearance Type (CT) codes indicating transfers in or out of the State Payroll Revolving Fund (SPRF).

Transfers in the SPRF that increase departmental expenditures are processed using the following CT codes:

• CT 1: Issue Payment - Registers of warrants issued
• CT 7: Transfer of Funds (Add position) - Registers of payroll adjustments
• CT 9: Reverse Accounts Receivable - Corrections of previous transfers

Transfers out of the SPRF that decrease expenditures are processed using the following CT codes:

• CT 4: Redeposit - Register of warrants re-deposited
• CT 5: Accounts Receivable - Transfers of amounts collected on overpayments
• CT 6: Transfer of Funds (Delete Position) - Registers of payroll adjustments

Payroll transfers will be distributed to the appropriate expenditure accounts. The month during which the expenditures were incurred will generally be indicated by the date on the Controller’s Transfer. An exception to this procedure occurs when the month indicated by the transfer date is different from the month the expenses were incurred. Then post the payroll transfer to the matching month. If the payroll period and the transfer date are in different fiscal years, the transfer date takes precedence.

Note: In automated systems, the Payroll Expenditure Register is automatically produced as a by-product of the labor distribution system, and these entries are not applicable.