Payroll Forum SBIP Update

1. Payroll Forum SBIP Update May 11, 2005

2. Statewide Business Infrastructure Program (SBIP) Past Projects Current Project Upcoming Projects Future Projects • HR/Payroll Bid Preparation Project • Develop bidding document for implementation • Select Vendor for HR/Payroll Implementation • HR/Payroll Planning Project • Identify process re-engineering and structure • Develop integration strategy and risk analysis • Develop business requirements Financial & HR Business Infrastructure Study Phase 1 Inventoried present systems and provided assessment of technical and functional capabilities Statewide Business Infrastructure Project – Budget & Financials • HR/Payroll Implementation Project • Implementation Financial & HR Business Infrastructure Study Phase 2 Provided a blueprint for viable implementation options and a recommended course of action • SBIP Data Warehousing Planning Project • Develop needs assessment • Confirm Scope • Develop implementation timeline and approach • Develop business requirements Statewide Business Infrastructure Project – Tax & Revenue • SBIP Data Warehousing Implementation Project • Implementation Legend: Past Projects Current Project Upcoming Projects Future Projects

3. HR/Payroll Project Update • Payroll JAD Session Update

4. HR/Payroll Project Update • Activities Completed This Period • 4/7/2005 – 4/29/2005 • Completed Phase 1 of HR/Payroll Project • Completed HR 1 and 2 deliverable enhancements • Completed Payroll deliverable • Completed Technical deliverable • Completed Change Management deliverable • Drafted re-engineering and organizational strategies deliverable • Completed project executive summary/legislative update document • Drafted and approved proposal for business process improvement activities • Began preparations for business process improvement activities • Began preparations for meetings with CFOs and CIOs

5. Collect Time and Attendance – Feb 14th & 15th Process Owner: Kathy Reitzel Number of Participants: 14 Agencies represented: • Administrative Office of the Courts • Department of Correction • Department of Environmental and Natural Resources • Department of Health and Human Services • Department of Justice • Department of Revenue • Department of Transportation • Office of the State Controller

6. HR150 – Collect Time and Attendance

7. JAD Session HighlightsCollect Time and Attendance • Improvement Opportunities • Apply leave policies consistently across agencies • Transfer leave balances seamlessly across agencies as an employee moves between affiliated state organizations • Allow electronic signature approval for routing • Potential Barriers • Complexity and magnitude of business rules and laws for timekeeping • Dispersed workforce will make training and support more difficult • Disparate business rules need to be standardized • Perception of ownership – “This is OSC/OSP’s system, not the agencies’” • Process Overview • This process includes collecting leave time, capturing exception time, approving the leave data, and monitoring time and leave balances. Time and attendance information is typically captured at the source where it originates through a variety of tools. • Benefits • Ability for the state to accurately report use of leave across the state • Employees trust the accuracy of time reporting when input personally • Increased processing window for time collection and approval • Time and effort saved because managers will no longer need to verify calculations on timesheets • Increased availability of staff due to electronic delivery of timesheets

8. Process Owner: Phyllis Creech Number of Participants: 47 Agencies represented: A&T State University Administrative Office of the Courts Community Colleges Comprehensive Major Medical Plan Crime Control & Public Safety Department of Administration Department of Agriculture Department of Commerce Department of Correction Department of Cultural Resources Dept of Environment and Natural Resources Dept of Health and Human Services Department of Insurance Department of Juvenile Justice Department of Labor Department of State Treasurer Department of Transportation Elizabeth City State Employment Security Commission Fayetteville State University Information Technology Services NC School of the Arts Office of Administrative Hearings Office of State Budget and Management Office of the State Controller Revenue Department Secretary of State State Auditor UNC Ashville Western Carolina Wildlife Resources Commission Winston Salem State Manage Payroll Pre-Processing – Feb 23rd & 24th

9. Process Owner: Doris Martin Number of Participants: 43 Agencies represented: A&T State University Administrative Office of the Courts Community Colleges Comprehensive Major Medical Plan Department of Administration Department of Agriculture Department of Commerce Department of Correction Department of Cultural Resources Dept of Environment and Natural Resources Dept of Health and Human Services Department of Insurance Department of Juvenile Justice Department of Labor Department of State Treasurer Department of Transportation Employment Security Commission Information Technology Services NC School of the Arts Office of Administrative Hearings Office of State Budget and Management Office of the State Controller Revenue Department School of Science and Math Secretary of State State Auditor UNC Ashville Western Carolina Wildlife Resources Commission Winston Salem State Manage Payroll Processing – March 2rd

10. Process Owner: Patty Norris Number of Participants: 36 Agencies represented: A&T State University Community Colleges Comprehensive Major Medical Plan Department of Administration Department of Agriculture Department of Correction Department of Cultural Resources Dept of Environment and Natural Resources Dept of Health and Human Services Department of Insurance Department of Juvenile Justice Department of Labor Department of State Treasurer Department of Transportation Employment Security Commission Fayetteville State University Information Technology Services NC School of the Arts Office of Administrative Hearings Office of State Budget and Management Office of the State Controller School of Science and Math State Auditor UNC Ashville Wildlife Resources Commission Winston Salem State Manage Payroll Post-Processing – March 3rd

11. HR100 – Manage Payroll

12. HR100 – Manage Payroll

13. JAD Session HighlightsManage Payroll • Improvement Opportunities • Utilize employee self service for data inquiries/changes • Eliminate multiple agency employee payroll records • Develop strong payroll processing policies and procedures with electronic access • Automate and monitor approval for dual employment • Potential Barriers • HR and payroll need education regarding responsibilities and deadlines to work together more effectively • Sheer magnitude of the project is daunting • Too many exceptions and modifications requested will have a negative impact on implementation • Process Overview • This process includes the collection of time and attendance and accounting data; collection and calculation of gross pay, deductions, and net pay; leave balance and account maintenance; links to accounts payable, general ledger, budget, funds management; and required payroll audit reports for 941’s and W-2’s and 1042s (tax documents for treaty benefits). • Automated calculations will decrease errors and increase consistency • Standardized and streamlined processes allow for policies to be applied consistently across all agencies • An automated system provides for an easier payroll audit • Benefits • Elimination of separate/duplicate HR and Payroll systems will strengthen data integrity • Elimination of duplicate data entry will increase efficiency • Provides a seamless transition for employees transferring between agencies

14. Payroll Business Process Improvement • Policy Development • Standardize Procedures • Quick Hits

15. Business Process Improvement Objectives • Develop standardized policies for use by all agencies • Review current system procedures to create standards for all agencies • Create OSC as the focal point for payroll policies and procedures • Develop central payroll manual • Implement quick hits to accelerate benefits to agencies • Prepare for future implementation of HR/Payroll system • Maintain enhanced web site capabilities • Supports Payroll compliance

16. High Level Project Timeline For pre-implementation activities, HR and Payroll will be separated into two distinct streams of work. Activities for HR process engineering will span twelve weeks and Payroll approximately seven weeks. Pre-Implementation Activities

17. Policies vs. Procedures • A policy is a “what” and the procedure is a “how to” • Policies are written as statements or rules • Procedures are written as instructions, in logical, numbered steps Policy Procedure Formal statement of a principle or rule that members of an organization must follow. Each policy addresses an issue important to the organization’s mission or operations Tells members of an organization how to carry out or implement a policy

18. Conduct Payroll BPI Kick-off meeting Gather documentation, memos and State statues for Payroll policies Gather sample policies from Universities and other State agencies Prepare materials for upcoming sessions Developing Standardized Payroll Policies Analyze & Confirm Communicate Gather Data • Review existing policy documentations • Create a list of appropriate policies with template • Prepare drafts for review • Communicate policies to CFO’s and Payroll Officers • Outline procedures for policy update and revision

19. Sample List of Standardized Policies • Retroactive Adjustments • Calculation of Time • Payroll Tax Withholding • Determination of Employee vs. Contractors • Garnishments, Levies, Child Support • Stop Payments and Re-issuance of Payroll Checks • Payroll Schedule • Release of Payroll Information • Terminated Employees • New Hire • Foreign Nationals • Temporary Employees • Other Pay (supplemental, awards, bonuses) • Deceased Employee Final Payment • Out of State Employees • Direct Deposits

20. Sample List of Quick Hits • Enhance check printing • Provide net pay calculation tool • Publish standardized payroll calculations • Create Central Payroll manual • Improve web site • Streamline transfer of leave balances across agencies • Improve dual employment processing • Develop OSC as a central focal point for payroll processing

21. Next Steps • Gather data for policies/procedures • Create draft policies/procedures • Review policies/procedures with selected representatives • Identify quick hit opportunities • Prioritize high impact quick hit opportunities • Validate quick hit opportunities with representatives • Implement quick hits and prepare for HR/Payroll implementation John Morgan jmorgan@ncosc.net (919) 871-6480