Segregation of Payroll Duties
Segregation of duties is important to the payroll function because it is a primary internal control intended to minimize fraud and embezzlement by assuring that any one person does not have complete access to two different control functions.
An important area of segregation of duties involves payroll administrators who are responsible for departmental payroll activities. A fundamental rule is that no one should enter his or her individual pay or leave record.
Departments are expected to have a least two staff members trained to process the monthly payroll. Both staff members should enter the other’s pay and leave record and initial the time entry document, which has been signed by a supervisor.
For departments, with no additional staff to share time entry responsibilities, several options exist in order of preference:
1st Dean’s Office or the Payroll Office enters the pay and leave record.
2nd Payroll Administrator enters own pay and leave record. To verify the accuracy of the data entry, the department head or designee reviews monthly the Payroll Expense by Person report (PWIPAYR). In addition, the report must be signed and dated by the reviewer and retained by the department. Departments must complete the Self Entry Authorization (SEA) form if they choose this option.
Monthly Payroll Expense Review
Each month, the department head should review the payroll monthly expense. This is an important step in segregation of duties. While the payroll administrator may be tasked with daily budget and payroll responsibility, the department head or administrator for a department has the ultimate responsibility in this area.
The Payroll Expense By Person Report (PWIPAYR) is a high level view of the monthly payroll expense. This report should be reviewed, signed and dated by the department head. If the department head want to view more detail, they may also review the Hours Entered Report (PWIPAYR).
No One Available for Time Entry
In rare instances, where no one in the department is available for time entry, please call the Payroll Office at 346-3151 for assistance. Or if you are the back up and need assistance, while the principal payroll administrator is on vacation or out on sick leave.
Hiring and Salary Rate Increases:
Individuals who perform monthly time entry should be independent of the personnel function of hiring employees and determining employee salary or pay. Having a minimum of two signatures on hiring and pay documents is another method of reducing risk.
For all employee classes, with the exception of student employees, numerous documents requesting authorization to hire are sent with appropriate signatures to the respective appointing authorities: Graduate School for GEs, Vice-Presidents Offices for Unclassified, and Human Resources for Classified employees. Departments have hiring authority for student employees.
The key documents for proper internal controls are the SEF (Student Employment Form) and the PRF (Payroll Request Form).
|Employee Family||Form: Action||Signatures|
|Student||SEF: New Hire, Rehire and Additional Job||Payroll Administrator
Department Head or Designee *
* The Designee cannot be the payroll administrator or an individual who has maintenance access to PHAHOUR.
|Classified/Temporary||PRF: All Actions||PI (for grants only)
AVP for HR or designee
|GE||PRF: All Actions||PI (for grants only)
Graduate School Dean or Designee
|Faculty/OA's||RTO:New Appointments, Reappointments, Revisions
PRF: Salary Increases, Title Changes, Stipends, Terminations/Retirements, Tenure Reduction, Sabbaticals, and Leaves.
|PI (for grants only)
Vice-President/Sr Vice Provost or Designee
|PRF: Increase or Decrease in FTE (unless it results inchanged benefits eligibility), Changes in Labor Distributions||PI (for grants only)
Dean / Director or Designee
Note: The EIF and SEF (Student Information Form) require the signature of the employee. Both these forms contain Biographic and Address Information and should be reviewed for accuracy by the employee and then signed and dated. The Payroll Office does not require the Department Head/ Dean/Director signature on the EIF (Personnel Information Form).