Summary: NRA Payments and Form 1042 Information Returns

IRS requirements for recording tax liabilities and payments:

A tax liability is created at the time a payment of income, not related to a payroll transaction, is made to a Nonresident Alien (NRA) or a foreign person. The State of Kansas is one entity which means NRA payments for all Regent institutions are combined to determine the tax liability. If at the end of any quarter-monthly period a total tax liability of $2,000 or more exists, a tax deposit must be made within 3 business days of the quarter-monthly period. A quarter-monthly period is the 7^th, 15^th, 22^nd and last day of the month for any given month. Late tax payments are subject to penalties and interest which range from 1-10% depending on the number of days the payment is late.

State of Kansas accumulation of payment information and payments:

The Office of Accounts and Reports (OAR) accumulates payment information as submitted via ManageEngine Service Desk from each Regent institution. OAR currently tracks this data in an Access database. To be compliant with the IRS, payment information should be submitted to OAR by the Regent institution weekly in conjunction with the quarter-monthly periods. However, we realize this timeline has not previously been communicated. Therefore, at a minimum the payment information must be submitted to OAR by the Regent institution monthly, no later than the last day of the month. OAR will pay to the IRS the tax due for the month within 3 business days of the end of the month.

Regent institution NRA reportable payment information requirements:

• Excel template titled ‘NRA WORKBOOK’ – see attached.
• Beginning with line 3 on the NRA WORKBOOK, one line shall be entered for each payment
• When submitting to OAR via ManageEngine Service Desk, use a Subject of NRA payments MM/YY

To ensure a timely payment to the IRS based on the tax due as submitted on the NRA reportable payment information, OAR will enter a GL journal within 3 days of receiving the NRA WORKBOOK to transfer the withholding taxes from the Regent institution funding provided in the NRA WORKBOOK to the Department of Administration.

Annual 2021 filing:

In preparation for calendar year 2021 reporting, OAR will send to each Regent institution a spreadsheet of transactions accumulated for 2021 payments January through November. The spreadsheet of transactions will be sent by December 15, 2021 and shall be verified and returned to OAR by December 31, 2021.

NRA reportable payment information for December shall be submitted to OAR via ManageEngine Service Desk no later than December 31, 2021.

Attachment: NRA WORKBOOK

NOTIFICATION OF REIMBURSEMENT:

On August 3, 2020, the Strengthening People and Revitalizing Kansas (SPARK) Taskforce and Governor’s Office of Recovery approved a recommendation for state agencies to receive distributions from the Coronavirus Relief Fund for the operational COVID-19 costs incurred in FY20.  On August 10, 2020 the State Finance Council (SFC) approved the SPARK recommendations for reimbursement. A full list of agencies and amounts is provided as Attachment A, summarized by the following categories of reimbursed expenses:

1. Non-Personnel COVID-19 coded expenses between 3/1/20 and 6/30/20 that were not included in the first round of reimbursement disbursements from CRF and were not charged to other federal funds. 

2. Agency requests for FY 2020 operational transactions that did not get properly coded as COVID-19 related in SMART.

REVIEW & CERTIFICATION OF COMPLIANCE:

A general ledger journal was processed on August 11, 2020 to transfer the total approved reimbursement amount to the agency’s Coronavirus Relief Fund.  On August 12, 2020 the SMART Team will send a list of expenditures, summarized by funding source, to each agency through a ManageEngine Service Desk ticket. Your agency must review all lines to ensure the amount represents expenditures qualifying for reimbursement based on the federal guidelines in the CARES Act. See 42 U.S.C. § 801(d).

Upon further review by your agency, if all or part of the amounts on the list do not meet the requirements for reimbursement, the amount must be left out of the general ledger journal so that the expense amount is not transferred to the Coronavirus Relief Fund (CRF).  Then, contact your Division of Budget analyst to request for the amount to be returned to the Governor’s Office.  Amounts to be returned will be transferred back to the Governor’s Office CRF by the Office of Accounts and Reports, SMART Team.

PROCESSING INSTRUCTIONS:

Executive Directive 20-517 was implemented to create a CRF for use by each state agency for both FY 2020 and FY 2021. 

Immediate action is necessary for each agency to process a general ledger (GL) journal to reflect the expenditures, less any amounts to be returned, in the CRF by August 18, 2020.  To ensure expenditures are not duplicated in both FY 2020 and FY 2021, the instructions outlined in Attachment B must be followed.

Federal reporting requirements for CARES Act funds were released on July 31, 2020 and included categories that must be used to report expenditures.  To facilitate the federal reporting, values have been added to ChartField 2 in SMART so that each agency can assign the appropriate value corresponding to the correct federal category.  Each GL journal processed to record expenditures to the CRF must include the appropriate ChartField 2 value on every expenditure row for Fund 3753.  The rows can be split as needed to correctly report the federal category.  The ChartField 2 federal reporting values are shown below:

Questions about which category should be used for a specific expenditure should be directed to the Recovery Office contact listed below.  

IMPACT ON FY21 SPENDING AUTHORITY:

Any COVID expenditures that were funded from the State General Fund and that are approved for CRF reimbursement will be proposed to be lapsed during the upcoming 2021 Legislative Session in the Governor’s revised budget. During the Division of Budget review of your agency's revised FY 2021 budget report, a recommendation will include the lapse of any of the State General Fund moneys that are reimbursed. You should not consider this reimbursement as additional spending authority in FY 2021.  If a subsequent allotment by the Governor occurs in FY 2021 prior to the 2021 Legislature’s return, these funds would be lapsed at that time.  The goal of this lapse exercise is to reduce the magnitude of future budget cuts if the state’s fiscal situation does not improve.

IMPACT ON REPORTING TO DIVISION OF BUDGET:

With regards of showing these transactions in IBARS for the September 15, 2020, budget submission, the Division of the Budget will send out a separate communication to all agencies when IBARS opens on or around August 14, 2020.

FEDERAL REPORTING:

Your agency should be aware that receipt of these funds may require additional internal controls to comply with federal requirements. This includes compliance requirements that are established by Uniform Guidance (specifically reference Subpart F, section 200.501 for Audit Requirement thresholds).  Please make sure you are familiar with the documents required to be submitted for FY 2020 to the Office of Accounts and Reports related to the expenditure of federal funds.  

While you should have all other information on your DA-89 complete and ready to go, we will extend the final deadline for the DA-89 from August 14, 2020 to August 21, 2020, to ensure CFDA 21.019 (fund 3753) accurately reflects all receipts of CRF funds, net of any returns based on your final review and compliance certification, due August 21, 2020. 

If you have already submitted a certification and/or DA-89, an updated one may need to be submitted based on any changes with reimbursement amounts. If submitting an updated DA-89 or certification form, please put “revised” in the subject line of your email.

OTHER CRF AWARDS:

While COVID-19 personnel costs and admin leave expenses, for FY20, were not approved for reimbursement at this time, these expenses will remain in the pool of eligible expenses to be considered for future use of CRF funds. For further explanation of FY20 reimbursements and information regarding the request of additional CRF funds for FY21, please see the attached memo from Secretary of Administration, DeAngela Burns-Wallace.

If there are additional questions or concerns, you may submit a ManageEngine Service Desk ticket, or you may contact the following individuals:

Sunni Zentner             Manager, Statewide Accounting                      Sunni.Zentner@ks.gov

Nancy Ruoff                Manager, Statewide Payroll                            Nancy.Ruoff@ks.gov

Jill Martin                    Team Lead, Federal Reporting                        Jill.Martin@ks.gov

Jeff Arpin                     Principal Analyst, Division of Budget              Jeff.Arpin@ks.gov

Taylor Hawkins           Recovery Office                                               Taylor.Hawkins@ks.gov

JG:sz 

Attachment A

Attachment B

FY 2021 Agency CRF Update Memo

In accordance with KSA 75-3729 and the Department of Administration’s Policy Manual Filing 13,001 - Capital Asset Records, agencies must enter capital assets into the SMART Asset Management (AM) module when the asset is received and/or the asset is functional to accurately reflect the correct transactions for reporting on the Comprehensive Annual Financial Report (CAFR). To ensure compliance with state policies, the DA-87 Capital Asset Reporting Log will be required to record all capital asset transactions over the capitalization thresholds noted below. This includes the acquisition, disposal, and transfer of capital assets and any changes to existing capital assets reported in the SMART AM module.

NOTE: KDOT & Regent Institutions are exempt from the reporting requirements of the DA-87.

Assets with a cost meeting the established threshold and a useful life exceeding one year are reported as capital assets in the CAFR. It is the agency’s responsibility to ensure all capital assets are properly recorded in the SMART AM module.

The statewide capitalization thresholds for assets are as follows: 

Please note, two SMART queries are available to assist agencies in reviewing and reconciling capital asset transactions: 

• Capital Asset Inventory List Query - KS_AM_ASSET_CAPITAL_INV_LIST – The query provides a complete agency inventory of capital assets recorded in the SMART AM module (use data filters to select CAFR asset book).
• Capital Outlay Purchase Query - KS_AM_VCHRS_WITH_54XXXX_ACCT – The query provides  a list of vouchers using the capital outlay account codes for the specified dates.

DA-87 Capital Asset Reporting Log due dates:

For FY 2020 the DA-87 forms were due on October 15, January 15, April 15 and July 15 for the previous quarters (cumulative). 

Beginning in FY2021 the DA-87 forms will only be required twice a year.  On January 15 agencies must submit data for the first six months of the fiscal year (July 1 to December 31) and on July 15^th, agencies must submit data for the entire year (July 1 to June 30).  It is important to keep your capital asset entries up-to-date to avoid delays in getting the DA-87 submitted timely. 

Please submit the completed DA-87 log to the Financial Integrity Team (FIT) email: OCFO-FIT@ks.gov. For detailed instructions on completing the DA-87, please see the “Instructions” tab on the workbook.

If the agency does not have any capital asset changes to report for the period, please send an email to the FIT team noting that no assets were purchased or updated within the reporting period.  

Assets are entered in the SMART AM module in one of two ways.

1. Directly in AM via Express Add.  SMART Job Aid:  Adding An Asset Using Express Add
2. Via asset integration on the requisition, the purchase order or the voucher

Each agency must determine which method will be used and ensure all parties involved are aware of how assets will be entered.

SMART Asset Integration Tools:  Asset integration is a process by which asset information included on the requisition, purchase order and voucher can flow to the Asset Management Loader Tables. This allows assets to be loaded to the Asset Management module directly, eliminating the need to hand-key asset details such as profile ID, tag number, custodian, location and chartfield values in the AM module. It also links the asset to its originating voucher.

In SMART asset integration can begin on either the requisition or the purchase order for the purchase of new assets or on the voucher for new or existing assets. Agencies have the option of deciding where to begin asset integration in SMART. Detailed job aids are available for entering assets at each level of integration: http://www.smartweb.ks.gov/training/integration-materials/am-po-and-ap.

• Linking Vouchers with Asset Module  
  • AM Tool 5 - Beginning Asset Integration on Voucher
  • Reviewing the Transaction Loader Tables Job Aid
  • Agency Asset Processor's Role in Integration
• Construction-In-Progress (CIP) is recommended to be entered in SMART AM at the beginning of the project.
  • It is essential that all costs associated with a CIP asset are captured in AM. Agency staff must determine if integration will be used or if asset costs will be manually adjusted in AM. The agency must determine the best process to communicate CIP costs between the Accounts Payable and Asset Management modules. SMART Job Aid: CIP Assets

Capital Asset Reporting Reminders:  Agencies should keep SMART AM up-to-date to ensure all assets are entered before FY closing. If an error or omission is found after year-end closing, in addition to entering the correction in SMART AM, a detailed explanation should be included on the Form DA-82 Capital Asset Supplemental Information.

The following guidance is provided to assist in completing capital asset reporting:

• Capital asset physical inventories are to be completed annually. Inventories are recommended to be conducted prior to June 15th to allow for corrections/additions to be recorded in the SMART AM module prior to SMART Year-End deadlines.
• Verify correct Profile ID and Category Code are used for assets. Asset Profiles drive the depreciation and accounting entry creation for CAFR purposes, it is crucial that the correct Asset Profile is used.
  SMART Job Aid: Incorrect Asset Profiles and Corrections / Profile ID Section Job Aid
• Agencies should review Construction-In-Progress (CIP) before year-end closing to ensure all costs are included in the asset module. CIP costs can be entered directly into AM as an addition/adjustment on the Cost Adjust/Transfer page to add costs as expenditures are incurred.
  SMART Job Aid: CIP Assets
• Completed CIP Assets need to be recategorized, the profile ID updated to a non-CIP profile, and other requirements completed as further defined in the job aid.
  SMART Job Aid: CIP Assets Assets (See Section: Steps to Perform After CIP Asset is Complete)
• All assets that have been sent to state surplus, sold, or otherwise no longer in the agency’s possession should be disposed of in the SMART AM module accordingly.
  SMART Job Aid: Retiring and Reinstating Assets
• Verify reported asset cost allocations, and update asset costs, if necessary.
  SMART Job Aid: Adjustments and Additions to Cost and/or Quantity
• For agencies utilizing integration, all outstanding Asset Integration Interface ID’s must be processed.
  SMART Job Aid: Reviewing Transaction Loader Tables

For assistance with entering/updating assets in SMART, please submit a SMART Service Desk ticket. For policy/recording questions please email the Statewide Agency Audit Services team at ARpreaudit@ks.gov.         

JG:te

Resources:
Policy Manual 13,001 Capital Asset Records
Form DA-87 Capital Asset Reporting Log
SMART Module of the Month Training – Safeguarding Assets

Additional SMART Asset Management job aids are available online via SMART Web.

Summary: New 1099 Classes and Types, Updated Job Aids for Entering and Updating New Suppliers, Updating Voucher Withholding

• The IRS has redesigned the 1099 Forms for reporting of calendar year 2020 payments:
  1. The 1099-MISC has been revised and rearranged for certain types of income. For SMART purposes the following Class and Type changes have been made:
     • 1099-01 is now 1099M-01 – Rental Income
     • 1099-02 is now 1099M-02 – Royalties
     • 1099-03 is now 1099M-03 – Other Income
     • 1099-06 is now 1099M-06 – Medical and Health Care Services
     • 1099-14 is now 1099M-10 – Gross Proceeds Paid to an Attorney
  2. All other 1099 Forms (S, D, G, and I) had no significant revisions.
  3. The 1099-NEC has been created to report all income that falls under Non-Employee Compensation, formerly box 7 of the 1099-MISC. For SMART purposes the Class and Type is now 1099N-01.

• Updates to previously entered data in SMART for calendar year 2020:
  1. The Office of Accounts and Reports is currently working on updating all previously paid SMART vouchers for Calendar Year 2020, with payment dates from 01/01/2020 through the end of the year 12/31/2020, to the new Classes and Types.  This update occurred after nightly batch has completed on Monday, December 21, 2020.
  2. The Office of Accounts and Reports is currently working on updating all reportable Suppliers to include the new Classes and Types. The current default flag for these suppliers will mirror to the new Class and Type of its equal.  This update occurred after nightly batch has completed on Monday, December 21, 2020.
• Entering new suppliers in SMART:
  1. In order to ensure the integrity of past data, the Office of Accounts and Reports will not be removing the Class Type of 1099. Please do not use for future setup of suppliers.
  2. For new suppliers, the Classes 1099M or 1099N will need to be used on the 1099 withholding page for those suppliers that previously would have fallen under the Class of 1099. All other Classes (I, G, and S) will still be available to use as needed.
  3. Please review the updated Job Aids below.
•  Updating voucher withholding:

1. This process has not significantly changed. Please review Classes and Types available for the Supplier. If the Class and Type needed is not available for use on the specific location, a TM-21 will need to be completed and submitted to the Supplier Maintenance team via a ManageEngine Service Desk ticket.
2. Once the voucher has been entered, click on the Withholding link and choose the Class and Type that corresponds to the specific payment.
3. Please review the updated Job Aids below.

Additional Resources:

Training guide for setting up Suppliers for 1099 reporting and an account code guide: 

https://www.smartweb.ks.gov/docs/default-source/ap---vendors---training-guides/1099-and-withholding-training-guide.doc?sfvrsn=2c36263b_10

Training guide for Entering New Suppliers:

https://www.smartweb.ks.gov/docs/default-source/ap---vendors---training-guides/creating-new-smart-supplier-record.docx?sfvrsn=41ae263b_12

Training guide for Checking for Existing Suppliers:

https://www.smartweb.ks.gov/docs/default-source/ap---vendors---training-guides/check-for-existing-supplier-record.docx?sfvrsn=a4dc273b_16

IRS guide to each Type of 1099, including instructions for each:

IRS Online Instructions for Forms

Summary: Agencies must segregate all new COVID relief awards in SMART.

As the Recovery Office shifts its focus from fund allocation and administration to providing targeted support and strategic guidance to recipient agencies, the Office of Accounts and Reports will support the ongoing tracking and reporting of statewide COVID-19 related spending.

Accounting for federal expenditures in SMART should clearly delineate between:

• CARES Act Coronavirus Relief Funds (CRF) (tracked in fund 3753 and in accordance with specific guidance in the attached checklist)
• CARES Act Non-CRF Awards
• New awards received under the December 2020 HR133 bill
• Additional federal relief packages/bills received in the future
• Other COVID-19 related spending from existing federal funds (identified with use of program code 21662 and not in a funding stream for one of the other categories listed here)

Therefore, the Director of Accounts and Reports is directing all agencies in receipt of COVID-19 relief awards to create and communicate unique funding streams using a combination of budget units, project codes, and/or program codes.  Please note this does not supersede any accounting guidance or policies regarding the tracking of the Coronavirus Relief Funds (per attached checklist) or regarding the relationship between SMART funds and federal CFDA #s.  This requirement is retroactive to the beginning of fiscal year 2021.

Agencies can submit an online SMART ChartField Request to add new budget unit(s) for federal funds as is deemed necessary.  At the time of the request, please also confirm the full award amount allocated or received, by uploading the award letter or other document in the SMART ChartField Request page.  If project codes are used instead of a new budget unit, please submit a ManageEngine Service Desk ticket to send documentation of the award amount and provide the fund, budget unit, and project code where the award will be tracked.  When establishing new budget units or project codes, please include either CARES or HR133 (or future relief bills as is appropriate) in the description for clarity in tracking/reporting.

If there are additional questions or concerns, you may submit a ManageEngine Service Desk ticket, or you may contact the following individuals:

Sunni Zentner            Manager, Statewide Accounting                   Sunni.Zentner@ks.gov

Nancy Haufler            Team Lead, SMART Processing Team        Nancy.Haufler@ks.gov

Jill Martin                     Team Lead, Federal Reporting                   Jill.Martin@ks.gov

Jeff Arpin                     Principal Analyst, Division of Budget          Jeff.Arpin@ks.gov

State Agency CRF Tracking and Reporting FAQ Checklist

JG:sz 

Summary: New Account Code for Employer Assessment for State Paid Family Medical Leave Programs

As a result of the implementation of state paid family medical leave programs, a new account code has been added to SMART to use for employer contribution expenditure tracking. The following account code was made effective in SMART as of January 1, 2019 and is eligible to be used starting immediately.

This account code is to be used to record employer contributions for state paid family and medical leave programs that are being implemented under new legislation in various states. At this time, the State of Kansas is subject to contributions for employees in the State of Washington and the District of Columbia. Other states may implement similar programs in the future.

NTR:abe
 

Summary: NACHA data security requirement 

In order to enhance quality and improve risk management, the National Automated Clearing House Association (NACHA) has increased the level of security measures required for large-volume processors when storing account information.  NACHA has established 2 separate phases of implementation for the new requirement based on transaction volume.  The State of Kansas must be compliant with the Phase 1 date of June 30, 2020.

The new requirement states that account information used for ACH purposes must be rendered unreadable when it is stored electronically.  This includes ACH account information stored at rest in any system or in any electronic format.  ACH account information in transit is not affected by this requirement.  Forms collected electronically (including those which are scanned and stored) are subject to the requirement.

Examples of data subject to the new NACHA security requirement:

• ACH information for any current or former employee
• ACH information for any supplier
• INF02, Inbound Voucher Interface File, retained by the agency for historical purposes
• INF67/BL67, Inbound ACH Bank File, retained by the agency for historical purposes
• DA-130, Authorization for Electronic Deposit of Supplier Payment
• DA-184, Authorization for Direct Deposit of Employee Pay and/or Travel and Expense
• Regent Pay Detail Files, retained by the agency for historical purposes
• Correspondence in e-mail or help desk that includes ACH information

Examples of data not subject to the new NACHA security requirement:

• INF02, Inbound Voucher Interface File, in transit
• INF67/BL67, Inbound ACH Bank File, in transit
• Regent Pay Detail Files, in transit

Security of ACH account information and attachments stored in SMART and SHARP will be addressed by the Department of Administration.  Each state agency retaining ACH account information and attachments in any agency system or database must adhere to the new requirement for data security on June 30, 2020.

Additional Resources
NACHA web site, Supplementing Data Security Requirements:
https://www.nacha.org/rules/supplementing-data-security-requirements

PCI DSS Requirement 9
https://www.solarwindsmsp.com/content/pci-dss-requirement-9

Attachment
Letter from Jake LaTurner dated November 26, 2019

Summary: Delay of enforcement for NACHA data security requirement 

This revises Informational Circular No. 20-A-007 issued on January 16, 2020.

Background:

The National Automated Clearing House Association (NACHA) has increased the level of security measures required for large-volume processors when storing account information. The new requirement states that account information used for ACH purposes must be rendered unreadable when it is stored electronically.  This includes ACH account information stored at rest in any system or in any electronic format.  ACH account information in transit is not affected by this requirement.  Forms collected electronically (including those which are scanned and stored) are subject to the requirement.

Revised deadline:

As published in the National Association of State Auditors, Controllers and Treasurers’ (NASACT) newsletter dated January 21, 2020, NACHA will be taking the position of “no enforcement” of the new data security rule through June 30, 2021 for governmental entities that are working in good faith toward implementation and compliance.  Agencies subject to the NACHA requirement should develop and document a plan of action by June 30, 2020 that will ensure compliance with the new security requirements is achieved on or before June 30, 2021.

Security of ACH account information and attachments stored in SMART and SHARP will be addressed by the Department of Administration.  Each state agency retaining ACH account information and attachments in any agency system or database must adhere to the new requirement for data security by June 30, 2021.

Additional Resources
NACHA web site, Supplementing Data Security Requirements:
https://www.nacha.org/rules/supplementing-data-security-requirements

PCI DSS Requirement 9
https://www.solarwindsmsp.com/content/pci-dss-requirement-9

 

Summary: Attaching Task Orders to the Header Comments Link on the Purchase Order     

This informational circular serves as notification that for any contract that is executed using the Task Order process, the Task Order documentation is required to be in SMART for all payments that exceed the agency’s delegated audit authority.

Some agencies use slightly different terminology to talk about Task Orders. Agencies may refer to these as Task Proposal Requests (TPR) or Task Requests (TR), but the purpose is the same. Generally, agencies wanting to engage a supplier will issue a Task Request or a Task Proposal Request. Suppliers wanting to be considered must respond with a Task Proposal Response.

To facilitate the processing of payment vouchers and to minimize delays, all fully executed Task Orders are to be attached to the Header Comments of the purchase order. Subsequently, each time the purchase order is pulled into a payment voucher, the Task Order information is available for review.

Without Task Orders being attached, the audit trail documentation is inadequate and cannot be reviewed for compliance with statutes, regulations, and accounting policies and standards. Further, vouchers that are submitted without the associated Task Orders attached to the PO, may be returned to the agency by Audit Services for the Task Order to be attached.

This informational circular should be used in conjunction with Informational Circular 20-A-010 Attachments in SMART (February 28, 2020).

JG:me:te
 

Summary: Requirements for Attachments in SMART for Payments and Reimbursements

This informational circular serves as a reminder of the documentation required in SMART for payments/reimbursements that exceed the agency’s delegated audit authority.

For Accounts Payable (AP) Vouchers:

Vouchers without attached invoices or supporting documentation, or that lack the documentation listed below may be returned to the agency by Audit Services, which would delay the voucher approval process.

Invoices and/or supporting documentation are required to be attached in SMART for all AP vouchers, unless providing the invoice and supporting documentation violates K.S.A. 45-221 or other relevant statutes related to non-disclosure/confidential information. If the invoice cannot be attached due to such statutory exceptions, then Audit Services will check for the following within the comments section of the SMART voucher Invoice Information tab:

• Specific statute that provides the exemption of attaching an invoice (i.e. K.S.A 45-221)
• Dates of service, order date and invoice date for each of the invoiced amounts
• Description of payment (i.e. attorney fees)
• Detailed breakdown of expenses if not itemized by line on the voucher
• Other relevant invoice information (i.e. rates/hours/pricing, etc.) where applicable, for Audit Services to make a reasonable determination
• Detailed reason why the invoice or supporting documentation can’t be attached in SMART (i.e. HIPAA violation, ongoing investigation, etc.)
• Travel expense receipts (if applicable)
• Other information that may be necessary to provide s ufficient audit trail documentation for Audit Services’ review for compliance with statutes, regulations, and accounting policy and standards.

For cell phone bills, Audit Services only requires the cover page/summary page that includes the supplier, amount due, and dates of service.

Audit Services does not require support documents for grant payments, refunds, or P-Card payments to be attached in SMART to the payments. The payment support documents should continue to be maintained at the agency in a file storage method other than SMART.

NOTE: If a contract does not contain a “cost sheet” or prices for what is being ordered and the agency must contact the supplier to obtain a “quote” for the goods or services, Audit Services requires the “quote” be attached to the Header Comments link on the purchase order.

For Travel and Expense (T&E) Reports:

Documents supporting travel and expense reimbursements are to be attached in SMART to the T&E report. These documents include:

• Prior authorization for travel not captured by a SMART Travel Authorization
• Required receipts which support T&E reimbursements
• Conference rate verification, i.e. conference materials
• Information that is not available in SMART

For Contracts and Purchase Orders (PO):

Agency specific contracts and all amendments to those contracts are to be uploaded to the SMART Supplier Contracts module.  If an amendment needs to be added to the contract after the contract has been created in the SMART Supplier Contracts, agencies should contact the Office of Procurement and Contracts for assistance. Attaching this information in SMART to the PO or the AP voucher is not sufficient.  Please continue to reference state contracts within the voucher when applicable. (See Procurement Informational Circular 16-04 for requirements on capturing contract spend data in SMART).

Prior Authorization (PA) forms that require hand-written approval by the Office of Procurement and Contracts, such as revised PA’s, must be attached in SMART to the Purchase Order (PO). All other PA’s must follow the Office of Procurement and Contract’s policies for attachments in SMART (See Procurement Informational Circular 11-03 for procedures on processing prior authorization requisitions).

SMART System Requirements for Attachments:

• The recommended size limit for a file being attached is 1 MB. (recommend black & white scans only, as color significantly increases the document size).
• Agencies should not attach CAD (Computer Aided Design) files or picture files (examples- .jpg, .tif, .png, or .gif).
• Excel, Word, PDF, or similar files, are appropriate.
• Multiple attachments are allowed (larger files may be broken down into multiple attachments if necessary).
• For vouchers that are interfaced, the agency must attach support documents after the voucher has been created in SMART.
• Avoid attaching documents that do not add value to the transaction.
• System retention for attachment files is expected to be 3 years. This period may be reduced if storage space becomes an issue.
• Agencies should not rely on SMART as the method for meeting record retention policies.

JG:me:te
 

Summary: State Agency Guidance for Essential Transactions During the Government Shut Down

On March 17, 2020, Governor Kelly announced that the Kansas Government will shut down, performing essential functions only, beginning March 23, 2020. As a result, the Statewide Agency Audit Services Team (Audit Services) is reduced and will be working remotely to approve transactions that are deemed essential by state agencies.

Essential transactions may include statutorily required payments such as, General State-Aid, Bond Principal and Interest, and other critical transactions which may include payments for:

• grants and assistance
• services essential to public health and welfare
• lease obligations
• utilities

Other essential transactions may include wires and deposit adjustments.

Processing questions or other inquiries should be emailed to ARPreaudit@ks.gov. High-priority issues should be identified in the subject line of the email. NOTE: Agencies should expect to experience longer than normal response and processing times.

JG:me:te
 

Summary: Rescinding Informational Circular 20-A-011 - State Agency Guidance for Essential Transactions.

Informational Circular 20-A-11 is rescinded effective April 6, 2020.

Even though Governor Kelly’s COVID-19 directives remain in place the Audit Services Team is now fully staffed and will be working remotely until those directives change.

Agencies may return to normal processing of vouchers and other financial transactions.

We appreciate your patience as the volume of transactions for the Audit Services Team’s approval returns to normal levels.

Processing questions or other inquiries should be emailed to ARPreaudit@ks.gov.

JG:me:te
 

As first announced to the SMART user community on March 27, 2020, a new program code was added in SMART to capture all transactions related to the COVID-19 outbreak.  The addition of program code 21662, COVID-19 Transactions, will allow for reporting of the financial impact of the COVID-19 outbreak on the State of Kansas. As requested by the Governor and Secretary of Administration, this applies to all state agencies (Regents, executive, judicial, and legislative branches).  Division of the Budget and the Office of Accounts and Reports have added program code 21662, COVID-19 Transactions, with an effective date of February 1, 2020, to both IBARS and SMART.

All COVID-19 related transactions occurring during fiscal year 2020 must be properly recorded using program code 21662 by the end of the fiscal year.

• If COVID-19 related transactions have processed during February and March using a different program code, agencies are expected as soon as possible to process adjustment transactions to update/correct the program code to 21662.
• For COVID-19 related transactions that process during April and May with a program code other than 21662, adjustment transactions to update/correct the program code to 21662 are expected to process within 10 calendar days following the month in which the transactions occurred.
• For COVID-19 related transactions that process during June with a program code other than 21662, adjustment transactions to update/correct the program code to 21662 must process prior to the end of the fiscal year. SMART will be closed to agency users at 6pm on Friday, June 26, 2020 for fiscal year-end processing.

Adjustment transactions should be entered in the SMART module where the transaction originated, for example, AP transactions should be updated/corrected as an AP journal voucher and deposits shall be updated/corrected as deposit adjustments.

When considering what transactions should use the COVID-19 program code, the general guidance is to include transactions that would not normally have occurred if the virus outbreak had not happened.

Examples of transactions that should use the COVID-19 program code:

• Deposits for COVID-19 revenue
• Purchase of laptop computers so staff can work remotely 
• Meals, lodging and/or miscellaneous expenses for emergency response
• Military activation
• Supplies for disinfection (cleaners, anti-bacterial gel, etc.)
• Medical supplies (gloves, masks, thermometers, test kits, etc.)
• Salaries and wages for additional personnel or overtime costs due to outbreak response 
• Overtime costs for staff working to cover tasks when co-workers cannot report due to self-quarantine or no access to daycare for school-age kids
• Costs due to the cancellation of activities

Examples that should not use the COVID-19 program code:

• Salaries and wages for staff working remotely or performing normal tasks during the statewide office closure

Any agencies with specific questions about whether expenses or revenues should be included or excluded should contact their Division of Budget analyst.

Specific guidance regarding payroll processing related to the COVID-19 outbreak is provided in Informational Circulars:

• 20-P-031 Addition of Earnings Code for COVID-19 Related Tasks (March 17, 2020)
• 20-P-033 Update to Program Code for Funding Associated with the New CVD Earnings Code (Time Reporting Code CVTSK) (March 31, 2020)
• 20-P-034 Agency Options for Required Use of the New Program Code for Funding Related to COVID-19 Payroll Expenditures (April 1, 2020)
• 20-P-035 New Earnings Codes and Agency Guidance for Implementation of the Families First Coronavirus Relief Act (FFCRA) (April 15, 2020)

JG:sz
 

Summary: Recording COVID-19 SMART Expenditures Using New Program Codes 21662 and 97662 

As first announced to the SMART user community on March 27, 2020, a new program code was added in SMART to capture all transactions related to the COVID-19 outbreak. Informational Circular 20-A-013, published April 2, 2020, provided deadlines for adjustments and journals as well as the information regarding the use of the new code.

The Division of Budget has identified a need for the COVID-19 transactions to be separated between on-budget and off-budget program codes. Please use program code 21662 for only on-budget transactions. To capture off-budget transactions, a new program code has been added to SMART, 97662, with the description COVID 19 Off-Budget, effective February 1, 2020. This code was added only for the following agencies that normally report off-budget transactions:

If an agency was not included in the above list and has off-budget COVID-19 transactions, please log a ManageEngine Service Desk request for this program code to be added in SMART.

All COVID-19 related transactions occurring during fiscal year 2020 must be properly recorded using on-budget program code 21662 or off-budget program code 97662 by the end of the fiscal year.

• If COVID-19 related transactions have processed during February and March using a program other than 21662 or 97662, agencies are expected as soon as possible to process adjustment transactions to update/correct the program code.
• For COVID-19 related transactions that process during April and May with a program code other than 21662 or 97662, adjustment transactions to update/correct the program code are expected to be processed within 10 calendar days following the month in which the transactions occurred.
• For COVID-19 related transactions that process during June with a program code other than 21662 or 97662, adjustment transactions to update/correct the program code must be processed prior to the end of the fiscal year. SMART will be closed to agency users at 6pm on Friday, June 26, 2020 for fiscal year-end processing.

Adjustment transactions should be entered in the SMART module where the transaction originated. For example, AP transactions should be updated/corrected as an AP journal voucher and deposits should be updated/corrected as deposit adjustments.

When considering what transactions should use the COVID-19 program code, the general guidance is to include transactions that would not normally have occurred if the virus outbreak had not happened.  Please refer to Informational Circular 20-A-013 for a list of examples.

JG:sz
 

Summary: Agencies must have COVID-19 expenditures properly recorded to the program codes by noon on June 1, 2020

In accordance with the deadlines previously established in information circular 20-A-013, please ensure your COVID-19 expenditures are properly recorded and up to date using the SMART program code 21662 (on-budget) or 97662 (off-budget).  SMART reporting, using these program codes, will be the official source of record for eligible state expenditures considered for reimbursement.

While all COVID-19 related transactions occurring during fiscal year 2020 must be properly recorded by the end of the fiscal year, if you have not completed your adjustment transactions to update/correct the program code for eligible expenditures, you will need to do so by noon on Monday June 1, 2020 in order for those transactions to be available for consideration in the first round of reimbursements from the Coronavirus Relief Fund.

Agencies should verify the accuracy and completeness of their reporting using the results of the SMART query KS_GL_EXPS_REVS_XFERS_BY_BU, which provides transactions summarized by fund, budget unit, account, and month.  Agencies are advised to prioritize hard costs (or non-payroll related expenses), if there is not sufficient time to get all entries reclassified/recorded by noon on June 1, 2020.  Please also keep in mind that agencies will be required to certify the accuracy of the coding to receive reimbursement.

Please reference information circulars 20-A-013, 20-A-015, 20-P-031, 20-P-033, 20-P-034, and 20-P-035 for establishment of the program codes, recording deadlines, and payroll processing guidance.  Any agencies with specific questions about whether expenses or revenues should be included or excluded should contact their Division of Budget analyst.

JG:sz

Summary: Agencies must process journals to record use of Coronavirus Relief Fund by June 24, 2020.

On June 16, 2020, the Strengthening People and Revitalizing Kansas (SPARK) Taskforce and Governor’s Office of Recovery approved for many state agencies to receive distributions from Coronavirus Relief Fund.  Executive Directive 20-517 was implemented and created a Coronavirus Relief Fund in each state agency.  A full list of agencies and amounts is provided as Attachment A.

A general ledger journal was processed on June 19 to transfer the total approved reimbursement amount to the agency’s Coronavirus Relief Fund.  A list of expenditures by funding source can be obtained from the agency’s Division of Budget (“DOB”) budget analyst.   Additionally, on June 19 the SMART Team will send the list to each agency through a ManageEngine Service Desk Ticket. Please review each line of expenditures to make sure that your agency agrees the amount represents expenditures qualifying for reimbursement based on the federal guidelines in the CARES Act. See 42 U.S.C. § 801(d).

Immediate action is necessary for each agency to process a general ledger journal to reduce the expenditures from the original funding source and charge the Coronavirus Relief Fund by June 24, 2020.  An example is included as Attachment B.

Upon further review by your agency, if all or part of the amounts on the list do not meet the requirements for reimbursement, the amount must be left out of the general ledger journal so that the expense amount is not transferred to the Coronavirus Relief Fund.   Then contact your DOB budget analyst to request for the amount to be returned to the Governor’s Office.

Your agency should be aware that receipt of these funds may require additional internal controls to comply with federal requirements. This includes compliance requirements that are required by Uniform Guidance (Specifically reference Subpart F section 200.501 for Audit Requirement thresholds).  Please make sure you’re familiar with the documents required to be submitted to the Office of Accounts and Reports, by August 14^th, 2020, related to the expenditure of federal funds.  

JG:sz
Attachment A
Attachment B

Summary: Wire Transfer Payments

In accordance with KSA 75-3728, this Informational Circular (IC) addresses agency procedures related to wire transfer activity.

Wire transfers requested to be made by the State Treasurer’s Office (STO) are required to follow the same guidelines as any other payment remitted through the Statewide Management, Accounting, and Reporting Tool (SMART). 

Wire transfer vouchers must be completed, matched (if applicable), budget checked, and agency approved in SMART no later than 9:30am on the date the wire is to be transferred.

SMART payment vouchers may be pre-entered before the date the funds are to be wired, by scheduling the payment due date. Note: The batch processes that run matching, budget checking, and submit vouchers for workflow approval run on the hour during the day. Ensuring the voucher is “Saved” before the 9am hourly batch process will allow the voucher to be ready for agency approval before the 9:30am deadline.

Agency staff must notify STO (treascash@treasurer.state.ks.us) and Agency Audit Services (arpreaudit@ks.gov) via email no later than 9:30 am on the date the wire is to be transferred. Agency Audit Services will review all wire payments in SMART to verify the payment meets all state laws and policies (including the amount, budget check status, match status (if applicable) and agency approval).  For wires payments that exceed 10 million dollars, please provide notification the day before to ensure sufficient cash is available on the day of the transfer.

Agency Audit Services will notify STO of all payment vouchers agency approved in SMART by the 9:30 am deadline and only those wire transfers will be made. Failure to agency approve vouchers in SMART may result in a delay of the wire transfer payment by a minimum of one business day.

Foreign Currency Wires: Agency staff must verify the daily exchange rate with the STO to ensure the voucher amount reflects the correct conversion rate.  Agency staff should complete, budget check, match (if applicable), and agency approve the SMART payment voucher as soon as possible to ensure the wire is transferred with the correct currency exchange rate. Failure to do so could result in the wire to be sent incorrectly or the voucher process to be completed again with a new currency exchange rate. 

SMART job aid WIRE Transfer Voucher has been updated to further assist agency staff in processing wire transfer vouchers. 

For questions on wire transfer procedures, please email Agency Audit Services at ARpreaudit@ks.gov.   

 

Summary: Updated FY 2018 Meals and Incidental Expense (M&IE) and Lodging Rates for travel occurring on and after October 1, 2018

As authorized by K.S.A. 75-3207a, the Secretary of Administration has fixed subsistence rates for FY 2019. The U.S. General Services (GSA) has announced a change in the CONUS standard rate for lodging and M&IE effective October 1, 2018.  The GSA standard lodging rate has been increased to $94 and the standard M&IE rate has been increased to $55.

For State of Kansas travel, federal per diem rates are followed to determine subsistence allowances. The CONUS per diem rate for an area is divided into two components: the lodging allowance and the meals & incidental expense (M&IE) allowance. These per diem rates are based on travel location and travel dates (seasonal rates may be listed for some locations).  If a specific travel location is not listed (or within the location definition), the standard rate, or “other” location rate is used. The following standard rates apply to many locations across the contiguous United States (CONUS).

For CONUS locations, the following standard daily subsistence rates apply for travel which occurs on October 1, 2018 and thereafter:

Meals & Incidental (M&IE) - $55

Lodging Allowance Rate - $94

The Employee Travel Expense Reimbursement Handbook is updated to include this information regarding subsistence for travel occurring on and after October 1, 2018.

SMART maintains the official subsistence rates for CONUS and OCONUS travel locations and will be updated semi-annually each October 1 and April 1 for any interim rate changes which have occurred.  International subsistence rates are not loaded into SMART.  For international travel locations, employees will obtain M&IE rates directly from the U.S. Department of State (DOS) website listed below.  For international travel, payment for actual lodging expense is allowed.

Source of Subsistence Rates:

Contiguous United States (CONUS)-

The U.S. General Services Administration (GSA) maintains the M&IE rates and lodging rates for travel locations in the contiguous United States -
U.S. General Services Administration website: https://www.gsa.gov/travel/plan-book/per-diem-rates/
Outside Contiguous United States (OCONUS):

(Alaska, Hawaii, and U.S. Territories/Possessions) -

The U.S. Department of Defense (DOD) maintains the M&IE rates and lodging rates for travel locations within Alaska, Hawaii and U.S. Territories/Possessions -
U.S. Department of Defense website: http://www.defensetravel.dod.mil/site/perdiemCalc.cfm
If you receive security warning messages or alerts when attempting to open this link, click “yes” until you reach a “This site is not secure” page. Click “More information” or “Details” and click “Go on to the webpage (not recommended)”.

International Locations -

The U.S. Department of State (DOS) is the source for M&IE rates only for international travel locations-
U.S. Department of State website: https://aoprals.state.gov/web920/per_diem.asp
For international travel, payment for actual lodging expense is allowed.
Note for using federal websites:
For CONUS and OCONUS travel, if SMART is not accessible, employees may access subsistence rates through the federal websites. However interim federal website updates may occur subsequent to the semi-annual SMART updates each October 1 and April 1. CONUS rates are published on an annual basis, but the annual file is updated periodically throughout the year with no interim files published. OCONUS and international rates are updated and published on a monthly basis. Be aware that any interim updates for CONUS or OCONUS locations are not valid until reflected in SMART. For international travel, only the October 1 and April 1 subsistence files should be used to locate the M&IE rates.

If employees utilize the federal websites to find M&IE and lodging rates, those rates should be used as follows:

Rates published October 1 - for travel occurring between October 1 and March 31 of each year.
Rates published April 1 - for travel occurring between April 1 and September 30 of each year.

Lodging Expense Limitations:
K.S.A. 75-3207a(f) provides that the daily lodging expense limitations established may be exceeded, upon approval by the agency head or designee, by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes.  Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

Conference Lodging qualified under K.A.R. 1-16-18a(c):
Agencies may authorize payment or reimbursement for actual lodging expenses when an employee is required or authorized to attend a conference, and the lodging rate exceeds the applicable lodging expense limitation (including the additional 50%).  The agency head must be provided with conference materials and rates.  These should be maintained with travel documentation.

Reduced Meal Allowance:
If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or provided at no cost to the employee, the daily M&IE rate for the travel location should be reduced based on the percentages listed below.  For partial days, the quarter amount is calculated first and then the reduction percentage is applied.  The daily M&IE reduction percentages are as follows:

Breakfast - 15%

Lunch - 35%

Dinner - 50%

 
Same Day Meal Allowance:
Reimbursement for a same day meal, in accordance with K.A.R. 1-16-18(c)(2), is calculated as a percentage of the daily M&IE rate for the travel location, based on the approved meal, as follows:

Breakfast - 15%

Lunch - 35%

Dinner - 50%
 

Queries in SMART to Obtain M&IE Rates and Lodging Rates:
A query “KS_EX_CONUS_RATES” is available in SMART to obtain all CONUS and OCONUS locations with the daily M&IE rates, meal reductions and lodging rates. Historical locations and rates from each semi-annual update will be maintained in SMART.

DH:jc

Summary: Procedures for Filing Calendar Year 2018 Form 1099 Information Returns for non-SMART payments and payments in SMART without the required 1099 information

• Requirements to report payments where the 1099 data was not recorded in SMART:
  1. The supplier/client must be in the Statewide Management, Accounting and Reporting Tool (SMART) supplier table.
  2. All reportable payments must be submitted via Service Desk using the EXCEL template referenced below
  3. The Office of the Chief Financial Officer processes the payments submitted via Service Desk using SMART. SMART generates the paper 1099s which are mailed to the suppliers. The 1099 information is electronically submitted to the IRS.

There is NO option for the agency to print the forms and have the Office of the Chief Financial Officer report to the IRS.

Policy and procedures:

While most 1099 transactions are recorded in SMART, and require no additional action by state agencies; there are some payments that occur outside of SMART or the information to be reported to the IRS is not in SMART. These transactions result in unique reporting procedures comprised of the following:

• Locally administered interest payments of $10 or more are to be reported on IRS Form 1099-INT. These payments typically represent interest paid from trust funds to clients of institutions with the Department for Aging and Disability Services and the Department of Corrections.
• Other payments such as non-employee awards not paid directly to the recipient from SMART.

To report non-SMART payments for form 1099 purposes the agency must confirm the supplier is in the SMART supplier table with the appropriate 1099 type and class, and ensure that withholding is turned on. If the supplier is not in the supplier table, the agency must add the supplier to SMART including the appropriate 1099 type and class, and turn withholding on.

Complete the EXCEL template “PS_WTHD_TRAN_TBL_update_template” (link to the Excel document is included at the bottom of this circular) for all non-SMART 1099 reportable payments. The completed template needs to be received by the Office of the Chief Financial Officer by January 10, 2019 to ensure the 1099s are distributed by the January 31, 2019 deadline.

The template has the columns listed below. Do not insert or delete columns or rows. Do not change the formatting. Beginning with line 2 (replacing the sample data), complete one line for each payment (add lines as necessary for additional withholding types/classes). The gray columns are defaults and should not be changed. If 499 lines are not sufficient, copy line 500 down. When completed, attach the EXCEL spreadsheet to a Service Desk ticket with the heading “non-SMART 1099”. Note if you have leading zeros precede them with an apostrophe ‘, i.e. supplier id ‘0000123456.

BUSINESS_UNIT: 5 digits with leading zeros, as assigned by SMART (agency number)

WTHD_ENTITY: IRS

WTHD_TYPE: as listed in the supplier table (1099, 1099I, 1099G)

WTHD_JUR_CD: FED

WTHD_CLASS: as listed in the supplier table, with leading zeros.

WTHD_RULE: RULE0

SUPPLIER_SETID: SOKID

SUPPLIER_ID: 10 digits with leading zeros, as assigned by SMART.

SUPPLIER_LOC: the supplier location with the 1099 withholding type and class entered in column C and E, usually 001, with leading zeros

ADDRESS_SEQ_NUM: 1

PYMNT_ID: Blank

SUPPLIER FEIN OR SSN: SSN or FEIN, 9 digits including leading zeros

PYMNT_DT: date of payment, mm/dd/yyyy format

WTHD_DECL_DATE: Same as date of payment

WTHD_BASIS_AMT: The taxable amount for this 1099 type and class for 2018.

DESCR100: 100 characters of your choice – alpha and numerical characters only (no punctuation, no special characters)

Additional Resources:

Training guide for setting up suppliers for 1099 reporting and an account code guide:
1099 and  Withholding Training Guide

IRS guide to each type of 1099, including instructions for each:
IRS Online Instructions for Forms

Excel withholding template:
PS_WTHD_TRAN_TBL_update_template

 

Summary: State of Kansas Encumbrance Policy Amendments - Audit Finding Changesand New Fiscal Year Grace Period.  

This Informational Circular is issued to announce two changes to Policy Manual (PM) Filing 10,300 Statewide Encumbrance Policy. 

Amendments to the encumbrance policy:

1)  Currently an audit finding results when the budget date is subsequent to the service date or the order date.  Effective July 1, 2019, an audit finding will result when the requisition date is subsequent to the service date or the order date.

2)  Beginning July 1, 2019, a grace period will be allowed during the month of July to allow agencies time to enter encumbrances for the new fiscal year.  During the entire month of July, no audit findings will be issued based on a comparison of the requisition date to either the service date or the order date.
 

The provisions of PM Filing 10,300 should be followed in conjunction with all requisition and purchase order requirements issued through the Office of Procurement and Contracts. 
 

For guidance on fiscal year closing and determination for all obligations, please see PM Filing 14,002 Fiscal Year Closing Including Fiscal Year Determination.
 

Please note:  The following payments remain under review pending a determination of any encumbrance requirement:

• Payroll expenditures and remittance of payroll taxes, deductions and garnishments
• Single Pay voucher payments

Attachments:

PM Filing 10,300 Statewide Encumbrance Policy

Best Practices – Statewide Encumbrance Policy 

PM Filing 14,002 Fiscal Year Closing Including Fiscal Year Determination

Summary: State of Kansas Encumbrance Policy Amendments expanding transactions not required to be encumbered.

This Informational Circular (IC) is issued to announce the following changes to the statewide encumbrance policy:

Amendments to the encumbrance policy:

Additional obligations that are generally not required to be encumbered but are optional for agency budget management include:

For guidance on fiscal year closing and determination for all obligations, please see PM Filing 14,002 Fiscal Year Closing Including Fiscal Year Determination.

The provisions of PM Filing 10,300 should be followed in conjunction with all requisition and purchase order requirements issued through the Office of Procurement and Contracts. 

Please note:  The following payments remain under review pending a determination of any encumbrance requirement:

DH:jm

Attachments:

PM Filing 10,300 Statewide Encumbrance Policy can be found at: Policy Manual

Best Practices – Statewide Encumbrance Policy: https://webadmin.ks.gov.production.premier.siteviz.com/media/cms/d56f9875-9fb8-443f-ab34-97c44fe9758a.docx

PM Filing 14,002 Fiscal Year Closing Including Fiscal Year Determination can be found at: http://www.admin.ks.gov/offices/chief-financial-officer/policy-manual

• Policy Manual (PM) Filing 10,300 Statewide Encumbrance Policy now incorporates the supplemental exemptions found in IC 17-A-014.
• The exemption for program payments has been further defined.
• Certain payments under $500 will now be exempted.
• Program payments are further defined as payments where the disbursing agency receives no direct service or tangible asset.
• Transactions less than $500 which are paid within 10 business days of the actual invoice date (unless required by Office of Procurement and Contracts policies).
• The paid date is defined as the SMART Accounting Date found at the following SMART screen:
  • SMART: Main Menu > Accounts Payable > Vouchers> Add/Update > Regular Entry, Payments tab, Accounting Date.
  • Agencies shall not split any invoice by generating multiple vouchers in order to avoid the $500 threshold.
• Payroll expenditures and remittance of payroll taxes, deductions and garnishments
• Single Pay voucher payments

As authorized by K.S.A. 75-3207a, the Secretary of Administration has fixed subsistence rates for FY 2018.  The U.S. General Services (GSA) has announced a change in the CONUS standard rate for lodging effective October 1, 2017.  The GSA standard lodging rate has been increased to $93.  The standard M&IE rate of $51 remains unchanged.

For State of Kansas travel, federal subsistence rates are being followed.  Subsistence rates are based on travel location and travel dates with seasonal rates listed for many locations.  If a specific travel location isn’t listed (or within the location definition), the standard rate, or “other” location rate is used.  The following standard rates apply to many locations across the contiguous United States (CONUS).    

For CONUS locations, the following standard subsistence rates apply for travel occurring on and after October 1, 2017:

M&IE - $51

Lodging - $93

The Employee Travel Expense Reimbursement Handbook is updated to include this information regarding subsistence for travel occurring on and after October 1, 2017.

SMART contains the official subsistence rates for CONUS and OCONUS travel locations and will be updated semi-annually each October 1 and April 1 for any interim rate changes which have occurred.  International subsistence rates are not loaded into SMART.  For international travel locations, employees will obtain M&IE rates directly from the U.S. Department of State (DOS) website listed below.  For international travel, payment for actual lodging expense is allowed.

Source of Subsistence Rates -

Contiguous United States (CONUS) -

The U.S. General Services Administration (GSA) maintains the M&IE rates and lodging rates for travel locations in the contiguous United States -
U.S. General Services Administration website: http://www.gsa.gov/portal/content/104877
Outside Contiguous United States (OCONUS):

(Alaska, Hawaii, and U.S. Territories/Possessions) -

The U.S. Department of Defense (DOD) maintains the M&IE rates and lodging rates for travel locations within Alaska, Hawaii and U.S. Territories/Possessions -
U.S. Department of Defense website: http://www.defensetravel.dod.mil/site/perdiemCalc.cfm

International Locations -

The U.S. Department of State (DOS) is the source for M&IE rates only for international travel locations-
U.S. Department of State website: https://aoprals.state.gov/web920/per_diem.asp
For international travel, payment for actual lodging expense is allowed.
Note for using federal websites:

For CONUS and OCONUS travel, if SMART is not accessible, employees may access subsistence rates through the federal websites. However interim federal website updates may occur subsequent to the semi-annual SMART updates each October 1 and April 1. CONUS rates are published on an annual basis but the annual file is updated periodically throughout the year with no interim files published. OCONUS and international rates are updated and published on a monthly basis. Be aware that any interim updates for CONUS or OCONUS locations are not valid until reflected in SMART. For international travel, only the October 1 and April 1 subsistence files should be used to locate the M&IE rates.

If employees utilize the federal websites to find M&IE and lodging rates, those rates should be used as follows:

Rates published October 1 - for travel occurring between October 1 and March 31 of each year.
Rates published April 1 - for travel occurring between April 1 and September 30 of each year.

Lodging Expense Limitations:

K.S.A. 75-3207a(f) provides that the daily lodging expense limitations established may be exceeded, upon approval by the agency head or designee, by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes.  Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

Conference Lodging qualified under K.A.R. 1-16-18a(c):

Agencies may authorize payment or reimbursement for actual lodging expenses when an employee is required or authorized to attend a conference, and the lodging rate exceeds the applicable lodging expense limitation (including the additional 50%).  The agency head must be provided with conference materials and rates.  These should be maintained with travel documentation.

Reduced Meal Allowance:

If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or provided at no cost to the employee, the daily M&IE rate for the travel location should be reduced based on the percentages listed below.  For partial days, the quarter amount is calculated first and then the reduction percentage is applied.  The M&IE reduction percentages are as follows:

Breakfast - 15%

Lunch - 35%

Dinner - 50%

Same Day Meal Allowance:

Reimbursement for a same day meal, in accordance with K.A.R. 1-16-18(c)(2), is calculated as a percentage of the daily M&IE rate for the travel location, based on the approved meal, as follows:

Breakfast - 15%

Lunch - 35%

Dinner - 50%

Queries in SMART to Obtain M&IE Rates and Lodging Rates:

A query “KS_EX_CONUS_RATES” is available in SMART to obtain all CONUS and OCONUS locations with the M&IE daily rates, meal reductions and lodging rates.  SMART will be updated semi-annually with the October and April 1 CONUS and OCONUS subsistence rates.  Historical locations and rates from each semi-annual update will be maintained in SMART.

DH:jm

Summary: Changes to Taxability of Moving Expense Reimbursement

This Informational Circular (IC) is issued to announce the following changes to the process for the reimbursement of qualified moving expenses to state employees:

The federal Tax Cuts and Job Act (H.R.1) enacted into law on December 22, 2017 amends Internal Revenue Code – Title 26, § 132(g) suspending the existing exclusion for qualified moving expense reimbursements from gross income.

Effective January 1, 2018 all qualified moving expense reimbursements are subject to taxes and are to be reimbursed directly to the employee through payroll (SHARP) using the Moving Expense Taxable (MVT) earnings code.

As authorized by KSA 75-3225(d), the Secretary of Administration intends to amend KAR 1-16-2b to require that moving expenses be reimbursed directly to the employee and to no longer allow payments to a commercial carrier. Therefore, moving related direct billed (commercial carrier, lodging, or airfare) payments are no longer authorized to be paid via the SMART Accounts Payable module or agency procurement card. Nor should any moving related reimbursements be paid to the employee through the SMART Travel & Expense module due to the taxable fringe benefit reporting requirements.

All moving expenses are to be paid after the move has occurred and all the necessary documents and receipts have been submitted by the employee for reimbursement. As authorized by KSA 75-3225, per KAR 1-16-2b(b)(1), the amount to be paid for moving household and personal effects may not in any case exceed the amount of the actual reimbursable moving expenses verified by receipts and bill of lading or the amount of moving expenses for moving twelve thousand (12,000) pounds of household goods by commercial carrier, whichever is the lesser amount. The agency is required to determine the actual amount of the moving expense to be reimbursed to the employee and notify the appropriate agency HR/Payroll staff of the employee and the amount to be added to the employee’s timesheet as MVT earnings. Agency HR/Payroll staff should include the reimbursement on the employee’s timesheet in the pay period following submission of the documentation.

As specified in KSA 76-727(b)(2), applicable to state educational institutions, the amount of the reimbursement cannot exceed the amount of the actual moving expenses verified by receipts or the amount of moving expenses for moving 12,000 pounds of household goods, whichever is the lesser amount.

Documentation for all moving expense reimbursements paid through SHARP with the MVT code should be maintained at the agency.

Approval to Reimburse Qualified Moving Expenses

The approval process for both in-state and out-of-state authorizations are not impacted by the taxability of the moving expense reimbursements.

As required by KSA 75-3225(a), an agreement must be signed by the agency head prior to authorizing the reimbursement of moving expenses to an employee using Form DA-22, Agreement for Reimbursement of Moving Expenses. 

If an applicant is from out-of-state; prior approval of the Secretary of Administration and the Governor should be obtained using Form DA-29, Request to Pay Expense of Out-of-State Applicants, to reimburse moving expenses. (KSA 76-727 (3c) exempts state educational institutions and the Board of Regents from obtaining prior approval of the governor).

Policy Manual 3,607 - Employee Moving Expense Reimbursement has been updated and will be available on or before March 30th on the Department of Administration website.

Policy Manual

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Summary: Capital Asset Reporting

In accordance with KSA 75-3729 and the Department of Administration’s Policy Manual Filing 13,001 - Capital Asset Records, agencies must enter capital assets into the SMART Asset Management (AM) module when the asset is received and/or the asset is functional to accurately reflect the correct transactions for reporting on the Comprehensive Annual Financial Report (CAFR). To ensure compliance with state policies, the DA-87 Annual Capital Asset Reporting Log will be required to record all capital asset transactions over the capitalization thresholds noted below. This includes the acquisition, disposal, and transfer of capital assets and any changes to existing capital assets reported in the SMART AM module.

NOTE: KDOT & Regent Institutions are exempt from the reporting requirements of the DA-87.

Assets with a cost meeting the established threshold and a useful life exceeding one year are reported as capital assets in the CAFR. It is the agency’s responsibility to ensure all capital assets are properly recorded in the SMART AM module.

The statewide capitalization thresholds for assets are as follows:

Please note, two SMART queries are available to assist agencies in reviewing and reconciling capital asset transactions:

• Capital Asset Inventory List Query - KS_AM_ASSET_CAPITAL_INV_LIST – The query provides a complete agency inventory of capital assets recorded in the SMART AM module (use data filters to select CAFR asset book).
• Capital Outlay Purchase Query - KS_AM_VCHRS_WITH_54XXXX_ACCT – The query provides a list of vouchers using the capital outlay account codes for the specified dates.

DA-87 Annual Capital Asset Reporting Log due dates:

• FY18 Initial submission is due May 15^th (For the reporting period of July 1^st, 2017 through March 31^st, 2018).

• FY18 End-of-Year log will be due July 31^st and will be a cumulative record of all FY18 capital asset transactions.

In FY2019 and subsequent years, agencies are required to submit a DA-87 cumulative report for each quarter of the FY due no later than the 15th calendar day following the end of each quarter to include all current FY capital asset transactions. The due dates are as follows:

Please submit the completed DA-87 log to the Financial Integrity Team (FIT) email: OCFO-FIT@ks.gov

For detailed instructions on completing the DA-87, please see the “Instructions” tab on the workbook.

If the agency does not have any capital assets to report for the period, please send an email to the FIT team noting that no assets were purchased within the reporting period.

Assets are entered in the SMART AM module in one of two ways.

1. Directly in AM via Express Add.SMART Job Aid:Adding An Asset Using Express Add
2. Via asset integration on the requisition, the purchase order or the voucher

Each agency must determine which method will be used and ensure all parties involved are aware of how assets will be entered.

SMART Asset Integration Tools:  Asset integration is a process by which asset information included on the requisition, purchase order and voucher can flow to the Asset Management Loader Tables. This allows assets to be loaded to the Asset Management module directly, eliminating the need to hand-key asset details such as profile ID, tag number, custodian, location and chartfield values in the AM module. It also links the asset to its originating voucher.

In SMART asset integration can begin on either the requisition or the purchase order for the purchase of new assets or on the voucher for new or existing assets. Agencies have the option of deciding where to begin asset integration in SMART. Detailed job aids are available for entering assets at each level of integration: http://www.smartweb.ks.gov/training/integration-materials/am-po-and-ap.

• Linking Vouchers with Asset Module
  • AM Tool 5 - Beginning Asset Integration on Voucher
  • Reviewing the Transaction Loader Tables Job Aid
  • Agency Asset Processor's Role in Integration

• Construction-In-Progress (CIP) is recommended to be entered in SMART AM at the beginning of the project.
  • It is essential that all costs associated with a CIP asset are captured in AM. Agency staff must determine if integration will be used or if asset costs will be manually adjusted in AM. The agency must determine the best process to communicate CIP costs between the Accounts Payable and Asset Management modules. SMART Job Aid: CIP Assets

Capital Asset Reporting Reminders:  Agencies should keep SMART AM up-to-date to ensure all assets are entered before FY closing. If an error or omission is found after year-end closing, in addition to entering the correction in SMART AM, a detailed explanation should be included on the Form DA-82 Capital Asset Supplemental Information.

The following guidance is provided to assist in completing capital asset reporting:

• Capital asset physical inventories are to be completed annually. Inventories are recommended to be  conducted prior to June 15th to allow for corrections/additions to be recorded in the SMART AM module prior to SMART Year-End deadlines.
• Verify correct Profile ID and Category Code are used for assets. Asset Profiles drive the depreciation and accounting entry creation for CAFR purposes, it is crucial that the correct Asset Profile is used. SMART Job Aid: Incorrect Asset Profiles and Corrections / Profile ID Section Job Aid
• Agencies should review Construction-In-Progress (CIP) before year-end closing to ensure all costs are included in the asset module. CIP costs can be entered directly into AM as an addition/adjustment on the Cost Adjust/Transfer page to add costs as expenditures are incurred. SMART Job Aid: CIP Assets
• Completed CIP assets need to be recategorized, the profile ID updated to a non-CIP profile, and other requirements completed as further defined in the job aid. SMART Job Aid: CIP Assets (See Section: Steps to Perform After CIP Asset is Complete)
• All assets that have been sent to state surplus, sold, or otherwise no longer in the agency’s possession should be disposed of in the SMART AM module accordingly. SMART Job Aid: SMART
• Verify reported asset cost allocations, and update asset costs, if necessary. SMART Job Aid Adjustments and Additions to Cost and/or Quantity
• For agencies utilizing integration, all outstanding Asset Integration Interface ID’s must be processed. SMART Job Aid: Reviewing Transaction Loader Tables

For assistance with entering/updating assets in SMART, please submit a SMART Service Desk ticket. For policy/recording questions please email the Statewide Agency Audit Services team at ARpreaudit@ks.gov.         

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Resources:
Policy Manual 13,001 Capital Asset Records
Form DA-87 Annual Capital Asset Reporting Log
SMART Module of the Month Training – Safeguarding Assets

Additional SMART Asset Management job aids are available online via SMART Web.

Summary: Establishing Policy for Fiscal Year-End Negative Cash Balances for Federal Funds

This informational circular is being issued to announce Policy Manual 8,004 Federal Funds – Fiscal Year-End Negative Cash Balances.

Historically, the Department of Administration required all funds to have a cash balance of zero or positive at fiscal year-end. Upon written request to the Office of the Chief Financial Officer certain federal funds have been permitted to carry a negative cash balance during the fiscal year, on the condition that the fund be restored to a zero or positive cash balance at fiscal year-end.

Effective immediately, when a negative cash balance is anticipated in a federal fund at fiscal year-end and reimbursement from the federal agency has not been received and posted, agencies are required to record an accounts receivable in SMART for the amounts expended but not yet reimbursed by the federal agency. 

Agencies are no longer required to maintain a zero or positive cash balance at fiscal year-end in federal funds.  Recording an accounts receivable will eliminate the need for agencies to process journal adjustments that temporarily record federal fund expenditures elsewhere.

Agencies currently using SMART Project Costing in conjunction with Customer Contracts for reimbursement processing may continue to use the modules to track grant expenditures. Reimbursable transactions from the billing worksheet must be approved and have generated pending items in the Accounts Receivable module to meet the requirements of this circular.

Note:  A review of the statewide financial reporting impact of PM 8,004 will be conducted prior to May 2019 and periodically thereafter.

For Policy Questions: Email Statewide Agency Audit Services Team at ARpreaudit@ks.gov

For SMART Processing Questions: Submit a ManageEngine Service Desk ticket.

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RESOURCES:
Policy Manual 8,004 Federal Funds – Fiscal Year-End Negative Cash Balances

Related SMART Accounts Receivable job aids are available online via SMART Web.

 

Summary:  Confirming existing policy - board member and state employee mileage reimbursement for use of privately owned vehicles.  

This Informational Circular addresses several recent agency inquiries regarding the reimbursement to board members for the cost of using privately-owned vehicles for official state business.

Under statutory provisions, board members are paid mileage under the same reimbursement policies established for state employees. As an exception, board members who are also active legislators, are reimbursed under the provisions of KSA 75-3212(d).

Per KAR 1-18-1a(d) if a mode of transportation is available and is less costly than transportation by privately-owned conveyance, mileage payments for use of a privately-owned conveyance shall be limited to the cost of that other mode of transportation.

Form DA-127 Private Mileage / Rental Comparison should be used to determine the least costly mode of transportation for in-state travel. The lesser amount of the cost comparison will be the maximum allowable reimbursement amount.

Board members and state employees are not required to use a state-owned or state-leased vehicle to conduct official business. The use of a privately-owned vehicle does not disallow reimbursement.  However, if a privately-owned vehicle is used, reimbursement is limited to the sum of fuel costs, and the cost of a compact car under the current statewide mandatory Vehicle Rental Service contract. 

Additionally, an employee that has a disability requiring the use of a privately-owned vehicle that is specially equipped, is exempt from the limitation of the cost of a compact car under the Vehicle Rental Service contract.

For additional information regarding travel reimbursements and state agency vehicle usage please reference the Travel Information for State Employees website.

Summary: FY 2017 Private Vehicle Mileage Rates

As authorized by K.S.A. 75-3203a, the Secretary of Administration has fixed the private vehicle maximum mileage reimbursement rates for FY 2017 at:

54¢ per mile for privately owned automobile

51¢ per mile for privately owned motorcycle

19¢ per mile for moving mileage rate

$1.17 per mile for privately owned airplane (based on air miles rather than highway miles)

These rates were effective January 1, 2016 and remain unchanged.

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Summary: State of Kansas Encumbrance Policy

Informational Circular 17-A-004 introduces a new statewide accounting policy for encumbering agency obligations.  The three methods for encumbering in the Statewide Management, Accounting & Reporting Tool (SMART) are purchase orders, travel authorizations and General Ledger (GL) encumbrance journals.

The new encumbrance policy resides in Policy Manual (PM) Filing number 10,300 – Statewide Encumbrance Policy, and can be found at:  https://admin.ks.gov/offices/chief-financial-officer/policy-manual. 

PM Filing 10,300 identifies obligations that are required to be encumbered as well as obligations that are not required to be encumbered but are optional for agency budget management.  In addition, best practices are found in the attached document.

Please note:  The following payments remain under review pending a determination of any encumbrance requirement:

• Payroll expenditures and remittance of payroll taxes, deductions and garnishments
• Single Pay voucher payments

The provisions of PM Filing 10,300 should be followed in conjunction with all requisition and purchase order requirements issued through the Office of Procurement & Contracts.

PM Filing 10,300 will be effective January 1, 2017.

The Department of Administration recognizes the significant impact this will have on agency processing.  A six month transition period will allow agencies the opportunity to review and amend internal procedures and processes necessary for compliance with the statewide encumbrance policy.  Auditing by the Agency Audit Services Team of the Office of the Chief Financial Officer for compliance with the statewide encumbrance policy will begin July 1, 2017.

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Attachment:
Best Practices – Statewide Encumbrance Policy
 

Summary: Clarification on Agency Purchasing Authority

This informational circular is being issued to define the basis for determining the level of authorization necessary for agency purchases from a single supplier during the budget year.

K.S.A. 75-3739(e) allows the Director of Purchases, with the approval of the Secretary of Administration, to delegate authority to any state agency to make purchases of less than $25,000.  Under this statute, the Director of Purchases has generally authorized for state agencies to spend up to $5,000 with one supplier during each fiscal year.  The fiscal year has been defined to be equivalent to the budget year.  Under this authorization, the agency has the ability to spend up to $5,000 with one supplier using their delegated purchasing authority during a budget year, in addition to any spend which occurs using a prior authorization and/or state contract.

Example:  An agency has a contract with a supplier for shoes.  The agency has already purchased $10,000 of contracted items.  With the same supplier, the agency makes a purchase of socks for $500 for which there is no contract.  The agency can use their delegated purchasing authority for the $500 purchase of socks without approval from the Office of Procurement and Contracts.  If the agency discovers later in the same budget year that they need to buy an additional $4,500 of socks, then authorization from the OPC must be attained prior to the commitment to purchase the additional socks.

Please see the chart below.
 

Amount of Allowable Agency Spend with a Supplier in a Single Budget Year
 

For individual purchases with one supplier which are under $5,000, but total spend for the supplier is $5,000 or greater for the budget year, approval from the OPC is required unless the items for that supplier are already on state contract or a prior authorization has already been obtained.  See the attached document which provides instructions on how to obtain OPC approval.

Attachment
 

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Summary: New Account Codes for KPERS Working After Retirement 3^rd Party/Independent Contractor Expenditure Tracking

As a result of the implementation of KPERS Working After Retirement (WAR) 3^rd Party/Independent Contractor member contributions, a new account code has been added to SMART to use for employer contribution expenditure tracking. The following account code is eligible to be used starting immediately.

Account Code                    Description                                                   Short Description           

518101                                ER KPERS WAR 3^rd PTY/CNSLNT               SHARP REQ    

This account code is to be used to track non-payroll employer contributions for KPERS WAR 3^rd Party/Independent Contractor member type ACTR that are not tracked in SHARP. Agencies are reminded that they will need to work with KPERS to establish reporting procedures and billing frequencies for these members. As these member contributions are not tracked in SHARP agencies are required to be billed via a SMART interfund for amounts due to KPERS. Agencies should use SMART account code 518101(ER KPERS WAR 3^rd PTY/CNSLNT) to record the expense side of the interfund.

Any interfunds that have been processed using any SMART account code other than 518101 will need to be corrected by creating a journal voucher in the Accounts Payable module, not Interfund module See the How to Enter a Journal Voucher job aid for instruction on entering the AP journal voucher. The payment method on the Payments tab of the journal voucher may need to be changed to ‘CHK’ in order to save the journal voucher. Submit a ManageEngine Service Desk ticket if you need additional assistance.

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Summary: Revised Clarification on Agency Purchasing Authority

This informational circular is being issued to define the basis for determining the level of authorization necessary for agency purchases from a single supplier during the budget year.

K.S.A. 75-3739(e) allows the Director of Purchases, with the approval of the Secretary of Administration, to delegate authority to any state agency to make purchases of less than $25,000.  Under this statute, the Director of Purchases has generally authorized for state agencies to spend up to $5,000 with one supplier during each fiscal year.  The fiscal year has been defined to be equivalent to the budget year.  Under this authorization, the agency has the ability to spend up to $5,000 with one supplier using their delegated purchasing authority during a budget year.   Please note that any spend which occurs using a prior authorization will also accumulate toward the $5,000 delegated purchasing authority limit.

Example A:  An agency has a contract with Payless (supplier) for shoes.  The agency has already purchased $10,000 of contracted items.  With the same supplier, the agency makes a purchase of other items for $1,000 for which there is no contract.  The agency can use their delegated purchasing authority for the $1,000 purchase of other items without approval from the Office of Procurement and Contracts (OPC).  If the agency discovers later in the same budget year that they need to buy an additional $4,500 of other non-contract items, then authorization from the OPC must be obtained prior to the commitment to purchase the additional items.  The non-contract spend (agency delegated authority) now exceeds the agency delegated purchasing authority amount.  Any further plan to purchase non-contract items from this supplier would require additional authorization from OPC.

Example B:  An agency has determined they need to purchase $10,000 of items for which there is no contract from a particular supplier.  The agency must seek Prior Authorization from OPC before a commitment is made to purchase the items.   Before submitting for the Prior Authorization, the agency should consider additional multiple purchases to this supplier during the remainder of the budget year and submit the Prior Authorization for that projected amount.  Since the Prior Authorization was equal to or greater than $5,000, the agency has no additional agency delegated purchasing authority remaining with that supplier for the budget year.  

Please see the chart below.

Amount of Allowable Agency Spend with a Supplier in a Single Budget Year

For individual purchases with one supplier which are under $5,000, but total spend for the supplier is $5,000 or greater for the budget year, approval from OPC is required unless the items purchased from that supplier are already on an OPC-approved contract.  

See the attached document which provides instructions on how to obtain OPC approval.

Attachment

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Summary: Travel and Expense payments must be paid using direct deposit payment method starting May 1, 2017.

As required by the Secretary of Administration’s 100% electronic payment policy issued May 21, 2010, beginning May 1, 2017, the Office of the Chief Financial Officer (OCFO) will require direct deposit for employee travel advances, travel reimbursements, and miscellaneous reimbursements generated within the SMART Travel and Expense module.

Details for Implementation

All employees must have direct deposit (ACH-Automated Clearing House) as the payment method for payments generated from the SMART Travel and Expense module.  Any travel and expense payments for employees set-up with System Check as the payment method will remain unpaid until the agency establishes the Automated Clearing House information within the employee’s profile in the Travel and Expense module.  The following steps should be taken to replace a System Check payment method with the Automated Clearing House payment method for travel and expense payments:

• For employees who will be receiving travel and expense payments and do not have banking information established in their SMART employee profile, agencies should ask for the employee to complete Form DA-184, Authorization for Direct Deposit of Employee Pay and/or Employee Travel and Expense.  The employee must select one bank account to be used for their travel and expense payments.
  • The form can be downloaded from the Department of Administration web site: Document Center 
  • Employees have the option of using a State of Kansas Paycard as a means of receiving their travel and expense payments.  Employees can be referred to your agency’s human resource and payroll staff to obtain a paycard.  The employee can then complete the DA-184 including the paycard routing number and account number for the bank information.
• The agency must update the employee’s SMART Travel and Expense profile.
  • For information on how to enter direct deposit information into employee profiles, please see the job aid available on SMARTWeb: http://www.smartweb.ks.gov/ .   Go to Training, Travel and Expenses, T & E Job Aids, Adding a Bank Account to an Employee Travel Profile.

A new SMART query has been created to identify active employees with ‘System Check’ as the payment method on the employee profile where the employee has been paid by check within a user-defined date range.  The query is named KS_EX_EE_CHECK_PAYMENT_LIST. 

Summary: Increased fraud prevention practices regarding changes to SMART supplier information. 

Fraudulent re-direction of direct deposit (ACH-Automated Clearing House) payments is a crime that targets all businesses and entities. While the Office of the Chief Financial Officer is unaware of any successful attempts at re-routing payments, fraudulent attempts to request changes to supplier ACH accounts have been reported.  These attempts have been very sophisticated.  Unauthorized individual(s) submitted information via email that contained email addresses and company logos that appeared to be from the supplier.  In addition, these unauthorized individuals may have contacted multiple state employees to obtain different pieces of information in order to not raise suspicions.

Fraud prevention tips:

• DO NOT provide a supplier with any account or identifying information. The supplier should already have that information.
• If the person requesting the change of supplier information is unfamiliar to you, confirm the individual requesting the form does exist at the company and is authorized to make the change requested.
  • Contact the person you normally deal with at the supplier to verify the requestor’s identity.
  • Establish a relationship with a new supplier by using a known phone number for the supplier.  Do not use a phone number submitted with the request or on the email communication.  Use the contact information from the invoice.
  • Ask the supplier/individual requesting the change to confirm the current account number and/or invoice number.  

DA-130 Authorization for Electronic Deposit of Supplier Payment form:
The DA-130 form has been updated to incorporate additional verification needed to validate banking update requests.  The DA-130 is not a public document; therefore, the DA-130 is not published on the Department of Administration’s website and should not be published on agency websites accessible to the public. Agencies acquire the DA-130 form by creating a ManageEngine Service Desk ticket. To maintain the security of the form, agencies are responsible for providing DA-130 forms directly to suppliers upon request in lieu of providing access on an agency website.

It is important that processes and procedures to reduce the risk of account fraud are developed and are put into practice both when a DA-130 form is requested and when completed DA-130 forms are received.  Do not send the DA-130 form to suppliers/individuals who cannot confirm their identity.

DA-130 form completion/submission:

• The DA-130 form must be filled out by the supplier or an authorized representative and cannot be completed by the agency.
  • The DA-130 (Rev. 05-2017) form requires the supplier provide a recent payment amount and date. DO NOT give them this information. If they do not know, direct the supplier to the Vendor Payment Self-Service website https://admin.ks.gov/offices/chief-financial-officer/central-responsibilities/vendor-payment-self-service
  • An official bank letter, voided check, or deposit slip must accompany the completed DA-130 form.  The bank document must contain the bank name, routing number and account number as well as the supplier’s name.  A letter from the supplier with the bank information is not acceptable.
    • The bank document must be submitted with the DA-130 form as an additional attachment when creating the ManageEngine Service Desk ticket.

• When a DA-130 form is received by your agency, review for completion.  Incomplete forms will not be accepted.
• Verify that the request is from the supplier and complete the agency certification on the DA-130 form.
• The updated job aid for the DA-130 form is located at: http://smartweb.ks.gov/training/accounts-payable#Suppliers

   

Adding the Supplier to SMART
Attach the DA-130 form and bank documentation to the supplier record in SMART. A hold will be placed on any new ACH information for a supplier that does not have the correct documentation attached.

DA-130C Cancellation of Electronic Deposit of Supplier Payment form:
The DA-130 form no longer contains a cancellation section.  A DA-130C form has been created to cancel an ACH payment method for a supplier.  The same level of due diligence achieved in applying fraud prevention processes and procedure in establishing or changing ACH payment information for suppliers using the DA-130 form shall also be applicable for cancellations using the DA-130C form.

TM-21 SMART Supplier Information Change Request form:
The TM-21 form has been modified to include supplier phone number and email to allow agencies to store confirmed contact information.  Changes to supplier information using this form should also be confirmed with the supplier.  Confirmation is recorded by completing the agency certification section. 

Summary: Increasing SMART ACH Participation Rate

In a continued effort to streamline work processes and to reduce the cost of state operations, the Department of Administration is encouraging agencies to review current business practices to increase ACH (Automated Clearing House) participation for SMART payments. ACH is the payment method whereby the payer initiates an electronic payment that is directly deposited into the payee’s bank account. This informational circular provides guidance for increasing agency ACH participation.

As detailed in Informational Circular 17-A-010, effective May 1, 2017 the required payment method for SMART Travel and Expense reimbursements is ACH. Although not required, best practice is for agencies to use ACH as the payment method for all SMART supplier payments. There are some types of agency payments that may not be easily or quickly converted to ACH payments; however, agencies should review their business process and develop a transition plan to utilize ACH as the payment method in the future.

Details for Implementation of Supplier ACH Initiatives:

New Suppliers

• At the time an agency starts doing business with a new supplier, the agency is expected to request completion of both a Form DA-130 (Authorization for Electronic Deposit of Supplier Payment) and a Form W-9 (Request for Taxpayer Identification Number and Certification) from the supplier. The agency must enter the ACH information as the new supplier is being entered into SMART as well as attaching the DA-130, banking documentation, and W-9 to the supplier record. The ACH location should be checked as the default payment location. If the appropriate documents are not attached, the supplier or the supplier’s ACH location will be placed on hold.

Suppliers Receiving Payments from Multiple State Agencies

• The Office of the Chief Financial Officer will contact the set of suppliers identified on Attachment A to request the supplier accept ACH payments from all state agencies. The list includes suppliers who received paper checks from more than nine agencies during the first quarter of 2017. No action is needed from agencies for the suppliers on this list.   
• As ACH information is added to SMART for the suppliers listed on Attachment A, notification will be provided so agencies will know when they can begin using the ACH payment method.

Most Frequently Paid Suppliers Currently Receiving Checks:

• Agencies should use the public query KS_AP_PAYMENT_CHK_COUNT to get a count of check payments by supplier for a given payment date range. The results should be used to identify which suppliers to target.  Moving the most frequently paid suppliers to ACH will yield the biggest cost savings. The following steps are recommended to transition these suppliers to ACH: 
  • View the supplier information in SMART to determine if ACH information exists:  Suppliers > Supplier Information > Add/Update > Supplier > Location tab, view all locations:
    1. If ‘SYSTEM CHECK’ is listed as the only location description, the supplier does not have ACH account information in SMART.  A DA-130 form should be sent to the supplier.  Once the form is completed and returned, the agency-verified DA-130 form and banking documentation should be submitted to the Supplier Team through the ManageEngine Service Desk. The Supplier Team will enter a new location in SMART and will designate it as the default payment method so the ACH payment method can be selected for future payments.
    2. If ‘ACH ****’ is listed in the location description, verify the effective status indicates an active account and the location is not on hold. The agency should use the last four digits of the ACH location description to confirm with the supplier that the ACH in SMART can be used for their agency payments. (The last four digit of the bank account number are always used as the last four digits in the ACH location description.) Once confirmed, the agency should begin using the ACH location for all SMART payments.
    3. If ‘ACH****’ is listed in the location description and the effective status indicates an inactive account, the location is on hold, the agency is unable to confirm the ACH information with the supplier, or the supplier is requesting use of different banking information, a DA-130 form should be sent to the supplier. Once the form is completed and returned, the agency-verified DA-130 form should be submitted to the Supplier Team through the ManageEngine Service Desk. 
    4. The agency may request maintenance to the supplier record to set the ACH location as the default by submitting a ManageEngine Service Desk ticket if the supplier has only one ACH location.

The Department of Administration provides a web page for suppliers receiving payments from the State of Kansas so details of their payments can be viewed. Payment information on the page is available for thirteen months following the issue date. Suppliers can access the self-service payment web page here.  A job aid titled “Vendor Self-Service Payment Look Up” can be provided to suppliers using this web site and is available on SMARTWeb, http://www.smartweb.ks.gov/, by going to Training > Accounts Payable > Suppliers.

Attachment

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Informational Circular (IC) 17-A-004 was issued on October 11, 2016 to introduce the new statewide accounting policy for encumbering agency obligations effective January 1, 2017.  

The encumbrance policy resides in Policy Manual (PM) Filing 10,300 – Statewide Encumbrance Policy, and can be found here.

PM Filing 10,300 identifies obligations that are required to be encumbered as well as obligations that are not required to be encumbered but are optional for agency budget management.  In addition, best practices are found in the attached document.

As stated in the policy, the three methods for encumbering in the Statewide Management, Accounting & Reporting Tool (SMART) are purchase orders, travel authorizations and general ledger (GL) encumbrance journals.

Agencies are reminded that the Agency Audit Services Team of the Office of the Chief Financial Officer will begin auditing for compliance with the statewide encumbrance policy effective July 1, 2017.

IC 17-A-014 is issued to provide supplemental information on payments exempt from the encumbrance policy. 

Supplemental information to the encumbrance policy:

Additional obligations that are generally not required to be encumbered but are optional for agency budget management include:

• Out-of-state travel where the supplier is not known until five business days prior to the travel occurring.
• Recording of expenditures of a local fund (petty cash and imprest funds).
• Inmate wages paid through agency imprest funds.

However, the above obligations are required to be encumbered at fiscal year-end, or if specifically required by the Office of Procurement and Contracts (OPC).

Canteen funds, work therapy funds, benefit funds, trust funds and employee use funds are examples of funds that have private funding which is not held in the state treasury, thus they are exempt from the encumbrance policy.

Please note:  The following payments remain under review pending a determination of any encumbrance requirement:

• Payroll expenditures and remittance of payroll taxes, deductions and garnishments
• Single Pay voucher payments

The provisions of PM Filing 10,300 should be followed in conjunction with all requisition and purchase order requirements issued through OPC. 

SMART vouchers without a purchase order will be pushed back to the agency for compliance.  To assist agencies as they work to educate staff for compliance with the encumbrance policy, the following dates will be used in reviewing AP vouchers:

• Effective July 1, 2017, purchase orders with a budget date subsequent to the invoice date will result in an audit finding.  
• Effective July 1, 2018, purchase orders with a budget date subsequent to the date of service or order/purchase will result in an audit finding.

Effective July 1, 2017, SMART expense reports with no existing travel authorization or GL encumbrance noted will be identified as an audit finding (unless exempt per PM 10,300). 

For guidance on fiscal year closing and determination for all obligations, please see PM Filing 14,002 – Fiscal Year Closing Including Fiscal Year Determination.

Attachment:

Best Practices – Statewide Encumbrance Policy

DH;jm

Informational Circular No. 16-A-002

Supersedes Informational Circular No: 15-A-002
Date of this Informational Circular: July 1, 2015  

Approval:
DeAnn Hill (Original Signature File)

Summary:
FY 2016 Meal Allowance and Lodging Rates

Please see State of Kansas Travel Handbook Section 4100 for information on how meals are reimbursed.

As authorized by K.S.A. 75-3207a, the Secretary of Administration has fixed the rates for FY 2016 at:

July 1, 2015 thru November 12, 2015 (Valid for current SMART version 9.0):

Meal Allowance:

*or actual to either a maximum of $127 per day or the allowable meal expense on the U.S. Department of State website for Foreign Per Diem Rates by Location

International Meal Allowance:
International travelers may use the meal per diem rates for a particular city as established by the U.S. Department of State on their website (http://aoprals.state.gov/web920/per_diem.asp) under the heading Foreign Per Diem Rates by Location.   Locate the country and city and then obtain the meal allowance under the column heading M & IE Rate.

Reduced Meal Allowance:
If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or supplied without cost by another party, the meal allowance should be reduced as shown in the table above. 

Same Day Meal Allowance:
The rates as established in accordance with K.A.R. 1-16-18(c)(3) are the same as indicated in the table above.

Lodging Expense Limitation:

K.S.A. 75-3207a(f) provides that the daily lodging expense limitations established may be exceeded, upon written approval by the agency head or designee, by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes.  Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

Note that prior to November, 2015, an additional Informational Circular will be issued with rates coinciding with the SMART 9.2 upgrade.

 DH:jm

Informational Circular No. 16-A-003  

Date of this Informational Circular: September 4, 2015  

Approval:
DeAnn Hill (Original Signature File)

Summary:
Implementation Date for CONUS rates for the State of Kansas

Per the Secretary of Administration, the State of Kansas will adopt federal standards for per diem rates for travel and expense effective with all travel that occurs on or after January 1, 2016.  The federal rates consist of CONUS (Contiguous United States) established by the General Services Administration, OCONUS (Outside the Contiguous United States) established by the Department of Defense, and Foreign rates established by the U.S. Department of State.

• CONUS/OCONUS/Foreign rates will be utilized for travel authorizations and expense reports where the travel date is January 1, 2016, or later

• Agencies should continue to use the current travel rates for all travel that will occur through December 31, 2015

• Effective at SMART 9.2 go-live on November 13, 2015, existing travel expense types and rates will continue to be available for travel dates through December 31, 2015 and the new expense types and travel rates will be available and effective for travel dates beginning January 1, 2016, or later

• Beginning November 13, 2015 and thereafter, agencies will be able to enter travel authorizations using the new rates for travel that will occur on or after January 1, 2016

• A travel event that crosses over the January 1, 2016 effective date for CONUS/OCONUS/Foreign rates, should be split into two separate travel authorizations and expense reports

• Additional information regarding this change will be communicated in the coming months

DH:jm

This Informational Circular establishes formal policy that agency costs incurred for travel to attend funerals, including reimbursement for the use of private vehicles and the use of state-owned vehicles, generally are not allowed.

The exception is that allowance will be made for incurring agency funeral travel costs incurred as a result of funeral attendance by the agency head, or the agency head’s designee representing the agency in an official capacity.

DH:jm

Effective November 13, 2015 the following information will be required regarding payments and reimbursements in the SMART system.

The Agency Audit Services team will no longer accept emailed or paper copies of invoices or other support documents.

For Accounts Payable (AP) vouchers:

• Invoices for payments are to be attached in SMART to the AP voucher for instances when:
  • The invoice provides useful information that aligns with the referenced contract and notating this information in the payment notes or comments fields exceeds the limitation in those fields.
  • The invoice provides information that is not available in SMART or on the Department of Administration website.

Exception: Note that Agency Audit Services does not require support documents for grant payments to be attached in SMART to the payments.  Grant payment support documents should continue to be maintained at the agency in a file storage method other than SMART.

• Prior Authorization (PA) forms that require hand-written approval by the Office of Procurement and Contracts, such as revised PA’s, must be attached in SMART to the Purchase Order (PO).  All other PA’s must follow the Office of Procurement and Contract’s policies for attachment in SMART.
• All copies of contracts or amendments are to be entered in SMART Supplier Contracts and should not be attached in SMART to the PO or the AP voucher.  If an amendment needs to be added to the contract after the contract has been created in SMART Supplier Contracts, agencies should contact the Office of Procurement and Contracts for assistance.

For Travel and Expense (T&E) reports:

• Documents supporting travel and expense reimbursements are to be attached in SMART to the T&E report. These documents include:
  • Prior authorization for travel not captured by a SMART Travel Authorization.
  • Required receipts which support T&E reimbursements.
  • Conference rate verification.
  • Information that is not available in SMART.

Information regarding attachments in SMART:

• The recommended limit to the size of the file being attached is 1 MB.
• Agencies should not attach CAD (Computer Aided Design) files or picture files (examples- .jpg, .tif, .png, or .gif).
• Excel, Word, scanned .pdf files, or similar files, are appropriate.
• Multiple attachments are allowed.
• Avoid attaching documents that do not add value to the transaction.
• System retention for attachment files is expected to be three years.  This period may be reduced if storage space becomes an issue.
• Agencies should not rely on SMART as the method for meeting agency record retention policies.

 DH:jm

As announced in Informational Circular 16-A-003 on September 4, 2015, the State of Kansas will adopt federal standards for per diem rates for travel and expense effective with all travel that occurs on and after January 1, 2016. The following policies are being implemented in conjunction with the adoption of these federal per diem rates and are effective for all travel occurring on and after January 1, 2016:

Subsistence Rates

• Per Diem rates for the State of Kansas shall consist of the following:

• • Meals and Incidentals Expense (M&IE) rate -
    • Meals – the cost of meals, taxes and tips.
    • Incidentals Expense –all fees and tips to hotel porters, bellhops, doormen, and maids.
  • Lodging rate -
    • Employees may be reimbursed for actual lodging expense incurred, not to exceed this rate. 
    • No allowance for any tips is included with this rate. 
    • Taxes are paid in addition to this lodging rate, as current policy allows, except for foreign travel locations.
    • For foreign travel locations, lodging taxes are included with the lodging rate and are not an additional reimbursement.

Note: Following the federal guidelines with respect to M&IE will avoid any taxability issues.

• Subsistence rates will consist of a standard per diem rate and non-standard area per diem rates. The standard rate is used except when the travel location is specified as a non-standard area, in which case, the per diem rate for that non-standard area is used.
• Meal reimbursement will be based on quarter days with the daily reimbursement amount divided equally between quarters. Meal per diem will be provided for the quarters the traveler departs and returns.
• International travel meal reimbursement will follow the U.S. Department of State M&IE rates, with no allowance for paying a higher amount for actual meal expenses.

Same Day Travel Meal Allowance

• For employees that qualify for a same-day travel meal allowance, the agency will enter the appropriate amount to be reimbursed based on 15%, 35% or 50% (breakfast, lunch or dinner) of the daily M&IE rate.  The meal is to be determined by the agency.  A new expense type “Same Day Travel Meal” has been added to the Travel & Expense module for the meal associated with same day travel. See the Employee Travel Expense Reimbursement Handbook for the guidelines for receiving a meal with same day travel.

Reduced Meal Allowance for Meals Provided at No Cost to the Employee

• If meals are provided during a given travel day, the agency will reduce the M&IE rate by the amount of the meal that was provided, based on 15%, 35% or 50% (breakfast, lunch or dinner) of the daily M&IE rate.  For partial days, the quarter amount is calculated first and then the meal deduction % is applied.
• If all meals are provided for a day, the reduction to the M&IE rate will be 100% and there will be no allowance for incidentals expense reimbursed to the traveler.

Reduced Subsistence Allowance

• Reduced subsistence allowance requires approval of the agency head or agency head’s designee, using the form DA-37 Reduced Subsistence Allowance.

Border City Travel – Discontinued

• Border City Travel Rule and designated cities are discontinued. However, the Department of Administration will consider requests for blanket approval of specific out-of-state travel locations.  The requests will come from the agency head or designee and may be renewed annually.

Expense Reports

• Expense Reports must be completed unless there are no reimbursable expenses to the traveler (such as mileage, meal per diem, etc.).
• If travel related expenses include reimbursable expenses to the traveler, all prepaid expenses are required to be added to the expense report.  This includes but is not limited to lodging, transportation rental and fares, fuel charged to a state credit card or account, conference registration and lodging, etc.
• Expense reports should include M&IE entered for one day at a time rather than for a range of days on one line.

Travel Expense Account Codes

• The new series of travel account codes, 525510 thru 525590 will be used for all travel occurring on and after January 1, 2016.  Regent institutions will continue to use the existing travel account codes since they do not use the SMART Travel & Expense module.
• The new account codes, 525510 thru 525590, will be used for all travel locations (in-state, out-of-state and international).  The location entered for an expense report will be used to determine the in-state, out-of-state and international designation which will be provided in SMART reports. The chart below provides the current and new account codes:

   

Travel Authorizations

• Travel authorizations entered beginning November 13, 2015, for travel occurring on and after January 1, 2016, will use the new account codes and rates.

Moving of Employee Personal Effects Account Codes

• New account code 521500 will be used for moving of employee personal effects for both in-state and out-of-state moves.  This account code will be used for all moves occurring on and after January 1, 2016.  Regent institutions will continue to use the existing account codes for this expense category. The chart below provides the current and new account codes:

Updates for Subsistence Rates

• State subsistence rates will be updated on April 1 and October 1 each year and will be effective until the next semi-annual update.  Historical rate information will be maintained in SMART

Rate File, Policy Documents, and Links

• An electronic file with the CONUS standard rate and non-standard area rates (for the continental United States) will be available at the Office of the Chief Financial Officer, Travel Information for State Employees website at: Travel Information for State Employees.
• The Employee Travel Expense Reimbursement Handbook is being updated to reflect these policy changes.  See the Employee Travel Expense Reimbursement Handbook for complete travel policy information available at the Office of the Chief Financial Officer, Travel Information for State Employees website at: Travel Information for State Employees
• The Office of the Chief Financial Officer Policy Manuals are being updated to reflect these policy changes. Policy Manuals are available at the Office of the Chief Financial Officer website at: Policy Manual.
• Agencies will be notified when the revised Employee Travel Expense Reimbursement Handbook and Policy Manuals, and the CONUS rate file are available on the Department of Administration website.

 DH:jm

Informational Circular (IC) 16-A-005 was issued on October 9, 2015 to address attachments in SMART.  Based on agency feedback and further review, IC 16-A-007 has been issued to supersede IC 16-A-005.

Effective November 13, 2015, the following information will be required for payments and reimbursements in the SMART system over the agency’s delegated audit authority.  Although not required, best practice is for agencies to also follow the guidelines provided below for payments under the agency’s delegated audit authority.

The Agency Audit Services team will no longer accept emailed or paper copies of invoices or other support documents.

For Accounts Payable (AP) vouchers:

• Invoices for payments are to be attached in SMART to the AP voucher for instances when:
  • The invoice provides useful information that corresponds with the purchasing authority and notating this information in the payment notes or comments fields exceeds the limitation in those fields.  For example, utility payments will require attached invoices unless the specific service date range is entered on the voucher in SMART.
  • The invoice provides information that is not available in SMART or on the Department of Administration website.

Exception: Note that Agency Audit Services does not require support documents for grant payments, refunds, or P-Card payments to be attached in SMART to the payments.  The payment support documents should continue to be maintained at the agency in a file storage method other than SMART.

• Prior Authorization (PA) forms that require hand-written approval by the Office of Procurement and Contracts, such as revised PA’s, must be attached in SMART to the Purchase Order (PO).  All other PA’s must follow the Office of Procurement and Contract’s policies for attachment in SMART (see Procurement Informational Circular 11-03).
• All copies of contracts or amendments are to be entered in SMART Supplier Contracts and should not be attached in SMART to the PO or the AP voucher.  If an amendment needs to be added to the contract after the contract has been created in SMART Supplier Contracts, agencies should contact the Office of Procurement and Contracts for assistance.

For Travel and Expense (T&E) reports:

• Documents supporting travel and expense reimbursements are to be attached in SMART to the T&E report. These documents include:
  • Prior authorization for travel not captured by a SMART Travel Authorization.
  • Required receipts which support T&E reimbursements.
  • Conference rate verification.
  • Information that is not available in SMART.

Information regarding attachments in SMART:

• The recommended size limit for a file being attached is 1 MB.
• Agencies should not attach CAD (Computer Aided Design) files or picture files (examples- .jpg, .tif, .png, or .gif).
• Excel, Word, PDF, or similar files, are appropriate.
• Multiple attachments are allowed.
• For vouchers that are interfaced, the agency must attach support documents after the voucher has been created in SMART.
• Avoid attaching documents that do not add value to the transaction.
• System retention for attachment files is expected to be 3 years.  This period may be reduced if storage space becomes an issue.
• Agencies should not rely on SMART as the method for meeting record retention policies.

 DH:jm

In preparation for the upgrade to PeopleSoft version 9.2 for SMART, this informational circular has been created to assist agencies with the cutover process.   An attachment is included with a timeline of events and deadlines to assist agency staff in completing necessary tasks prior to and following the upgrade.

 General Items

SMART will be closed to agencies starting Friday, November 6, 2015 through Thursday, November 12, 2015 as the SMART system transitions from PeopleSoft version 9.0 to version 9.2, and from state-owned hardware to a hosted environment.  (The transition will be referred to as the “cutover process” in this circular). SMART will re-open on Friday, November 13, 2015 at 7:00 AM. 

The URL for accessing the system will change with this upgrade.  The new URL can be attained by navigating to the current SMART URL where a new landing page shows the SMART 9.0 URL on the left side of the page and the new SMART 9.2 URL on the right side of the page.  Users should click on the SMART 9.2 URL between October 26 and November 2 to verify that the page can be displayed.  Please note that the page will not display between November 3 and November 10 and users clicking on the URL will receive the “Error 404” message.  On approximately November 11, the URL will be accessible again.  Users must delete their internet browser cache files prior to logging into SMART for the first time on November 13 or after.    

Some users may have issues with the new landing page displaying due to the way the page has been bookmarked in their browser.  To reach the new landing page, bring up the current SMART 9.0 URL and delete all characters to the right of ‘.gov/’ and hit the Enter key.  Any users having difficulty with this can create a ManageEngine Service Desk ticket or contact the Help Desk at 785-368-8000. 

Processing Deadlines
Please see the attached SMART Upgrade Cutover Plan Day by Day Summary for all processing deadlines and other important details regarding the upgrade. 

Interface File Processing
The cutoff for interface files to be processed prior to the upgrade will be 6:00 PM on Wednesday November 4, 2015 for expenditures and 1:00 PM on Thursday November 5, 2015 for deposits.  Files received after the cutoff and by November 8 will be held and processed on the night of November 12, 2015.  Other files received after November 8 will be processed on the night of November 13, 2015. 

Payment Processing
During the period of November 6 to November 12, agencies will not be able to process payments in the accounting system.  No payments can be generated with the exception of wire payments for agencies who have previously established agreements.  Agencies should plan ahead for this time period.  

Agencies may continue to submit SMART check maintenance (reissues and cancels) requests by creating a ManageEngine Service Desk ticket through 10 AM on Thursday, November 5.  The State Treasurer’s website will not be updated during the SMART cutover period; therefore, no check maintenance requests shall be submitted during the cutover period Friday, November 6 to Friday, November 13 because the status of the check will need to be validated once SMART is re-opened and the State Treasurer’s website has been updated. Agencies may begin submitting SMART check maintenance requests by creating a ManageEngine Service Desk ticket on or after Monday, November 16 after the status of the check has been validated. 

For agencies that process wire payments between November 6 and 12, vouchers must be entered in SMART 9.2 for the wire payments by 6:00 PM on November 17, 2015.  Please enter one voucher for each wire payment since the two transactions must match exactly.      

Deposit Processing
For agencies that upload and submit deposits via INF43 and INF44 -- continue to upload and submit deposits via INF43 and INF44 until 1:00 PM on Thursday November 5, 2015. (The INF28 can also continue to be submitted on November 5, 2015, for agencies using pending items). SMART AR Deposit jobs will run according to the regular hourly schedule. If you process INF43 or INF44, please e-mail the State Treasurer’s Cash Management Group at cash@treasurer.state.ks.us to notify them of the Business Unit, Deposit ID (if known), and Deposit Total so they can approve the transaction in SMART. STO will perform their normal approval and release at 3:00 PM on Thursday November 5, 2015. 

While SMART is unavailable from November 6 to November 12, agencies should continue to make deposits using the State Treasurer’s Office form: Temporary Deposit Form. Using the Temporary Deposit Form is preferable to holding checks and cash at the agency, and allows users to meet the requirement to deposit funds collected each day. Please bring the completed form, along with the cash and checks (calculator tape attached), to the State Treasurer’s Office. 

All deposits that occur between November 6 and 12 must be entered in SMART 9.2 by 2:00 PM on November 16, 2015. Please enter a separate SMART deposit transaction for each deposit made with the State Treasurer’s Office.  One SMART deposit transaction cannot be entered to summarize multiple deposits.     

 Transaction Status for Cutover

It is best practice for transactions to be in a completed state at the time of the cutover.  Please consult the Month End Checklists available on the SMART Web website: http://smartweb.ks.gov/home/month-end-checklists/ to assist with reviewing transactions.  Please resolve all issues in advance so that transactions are in a completed status by 6:00 PM on November 5, 2015.  Agencies should refrain from entering transactions that cannot be completed before the cutover until after SMART 9.2 is available.  More details about specific transactions are listed below: 

Accounts Payable Transactions
Vouchers must be entered, approved, matched, and budget checked by November 5 at 10:00 AM. 

P-Card Transactions
The preferred statuses for P-Card transactions are either Staged or processed all the way through voucher build. SMART will not be loading any P-Card transactions after Monday November 2, and the last P-Card voucher build will run at 8:00 AM on Wednesday November 4. 

Travel and Expense Transactions
In preparation for the upgrade, you must ensure that all expense transactions are either in Pending status (un-submitted) or Paid status (for expense reports and cash advances) or final Approved status (for travel authorizations).  Transactions that are in the approval process are not recoverable for routing to approver queues after the upgrade. Once the upgrade is completed and the system is live, transactions that are in Pending status may be submitted normally. 

Please run the following queries to identify expense transactions that require attention:

Travel Authorizations – Must be in final approved status

• UNPROCESSED_TRAVEL_AUTHS
• Navigation: Reporting Tools > Query > Query Viewer > UNPROCESSED_TRAVEL_AUTHS
• Query results DO NOT include TAs in Closed or Denied status
• Query DOES include TAs in Approved, Approvals in Process, Pending and Submitted for Approval status
• TAs with a Valid budget status have encumbered funds
• TAs with an Error status have a budget error that should be resolved and may or may not have encumbered funds
• TAs with a Not Chk'd budget status have not yet been budget checked and have not encumbered funds 

Cash Advances – Must be in Pending or Paid status

• Identify cash advances that are not reconciled
• Navigation: Travel and Expenses > Manage Accounting > Reconcile Cash Advance
• Cash advances must be reconciled by 10:00 AM on November 5 

Expense Reports – Must be in Pending or Paid status

• UNPROCESSED_EXPENSE_REPORTS
• Navigation: Reporting Tools > Query > Query Viewer > UNPROCESSED_EXPENSE_REPORTS
• Query results DO NOT include ERs that are in Closed, Denied or Paid status
• Query results DO include ERs that are in Approved for Payment, Approvals in Process, Pending, Staged, or Submitted for Approval status

General Ledger Journals
General Ledger journals must be entered, edited with a successful budget check, agency approved and submitted into workflow for central approval November 5 at 2:00 PM.

Asset Management Transactions
Agencies are encouraged to have all capital asset transactions dated through November 5 entered into SMART by 6:00 PM on November 5. This includes additions, cost adjustments, transfers, and retirements.

In addition, agencies that use integration to add assets must make sure that all outstanding Interface IDs have been loaded or marked as ‘Replaced’ if applicable. Please use the financial search page (Asset Management > Send/Receive Information > Approve Financial Information > Review) to validate. Note that users can search by Load Status. There should be no interface lines remaining at 6:00 PM on November 5 with the following Load Statuses: Errored, In Process, On Hold, and Pending. If there are any questions regarding Interface ID processing of lines with these statuses, please log a ManageEngine Service Desk ticket requesting assistance as soon as the issue has been identified. 

Workflow

SMART 9.0 utilized AWE (Application Workflow Engine) for Procurement and Travel and Expense.  For SMART 9.2, General Ledger and Accounts Payable modules will move to using AWE instead of Virtual Approver.  

AWE forces the approval hierarchy when there are multiple levels of approvers.  A Level 1 approver must approve before a Level 2 approver can access.  Top Level approvers will not be able to approve a transaction earlier in the workflow stream and approve for all levels.  See the details below for assistance with preparing for this change. 

AP Workflow

Two queries have been created to assist agencies in reviewing the AP Voucher Approval Workflow as we move toward the SMART Upgrade in November.  Agencies should run the query KS_SET_A_B to see users in your agency who are currently Set A or Set B approvers within each Origin Code for which workflow approval is required.  The query KS_APPROVER_AP_V1 will list the users in your agency with the Agency Fiscal Office Approver Role. 

Agencies will need to have a user in the Set A, Set B, and Fiscal Office levels for each of the origin codes for which vouchers are processed through workflow approval or risk vouchers being stuck or misrouted during the approval process.  Please refer to: SMART to make changes to the Set A and Set B approvers.  If you need to make updates to the Agency Fiscal Office Approvers, please submit a security request form in ManageEngine Service Desk to make the necessary changes.  Please note that this does not affect any of the interface vouchers which are submitted as pre-approved.    

In the new AP Voucher workflow effective with the SMART upgrade, higher level approvers will no longer be able to approve vouchers that have not yet been approved by the lower level approvers.  If the fiscal office approvers would like to have flexibility to approve vouchers that are not yet on their worklist, we suggest that the fiscal office approver be added as a Set A and/or Set B approver for each origin code.  

If vouchers become stuck in the approval workflow, agencies will continue to log requests in ManageEngine Service Desk to have the voucher reassigned to an appropriate approval level. 

GL Workflow
The query KS_APPROVER_GL_V1 has been created to assist agencies in reviewing the GL Journal Approval Workflow.  Agencies must have users in all three approval levels (KGL_AGY_APPROVER_L1, KGL_AGY_APPROVER_L2, and KGL_AGY_APPROVER_L3) or Journals will not route correctly through the approval path.  The FOCUS Team has also reviewed the workflow and identified missing roles. Service Desk tickets have been logged in ManageEngine  to update security roles as necessary so that a complete workflow path exists for each agency as we upgrade to 9.2. Higher level approvers will no longer be able to approve Journals that have not yet been approved by approvers at the lower levels unless they are also assigned the lower level roles. 

We urge all agencies to review their Approvers at this time using the above query and request any additional changes by submitting a security form through ManageEngine Service Desk. 

Other Items 

Tree Updates
For agencies that utilize Trees within SMART for reporting purposes, please note that the Tree values from SMART 9.0 were transferred to SMART 9.2 on July 27, 2015. The SMART Team’s GL Analyst has manually updated the Tree values in SMART 9.2 to include values added to SMART 9.0 after that date.  Even though the SMART Team has tried to validate that all Tree values have been added to SMART 9.2, agencies should take the time to verify the Tree values that were added after July 27, 2015. 

Spreadsheet Upload Templates 
New versions of the spreadsheet upload templates must be used with SMART 9.2.  Agencies should take the necessary steps to make sure their agency users have the new versions and discontinue the use of the old versions.  Agencies should submit a request for the new versions of the spreadsheet(s) they utilize to the ManageEngine Service Desk.  There are four new spreadsheet upload templates:

• Budget Journal Upload (INF24)
• Journal Upload
• Deposit Upload (INF43)
• Voucher Upload (INF50)

 16-A-009 Attachment SMART Upgrade Cutover Day by Day Summary

Informational Circular (IC) 16-A-006 was issued on October 12, 2015 to announce travel policies being implemented in conjunction with the adoption of federal per diem rates (meals and incidentals, and lodging), effective for all travel occurring on and after January 1, 2016.  Based on agency feedback and further review, IC 16-A-010 contains revised policy and supersedes IC 16-A-006. 

The following travel policies are being implemented in conjunction with the adoption of federal per diem rates, effective for all travel occurring on and after January 1, 2016: 

Subsistence Rates (Contiguous United States, Alaska, Hawaii, U.S. Territories and Possessions, and International locations) -

Note: For international travel, the allowance for paying actual meal expenses with receipts is discontinued.

Note: By following federal guidelines with respect to M&IE, the State of Kansas avoids any taxability issues. 

Exception to the Lodging Expense Limitations

Reimbursement for Actual Conference Lodging

Same Day Travel Meal Allowance

Reduced Meal Allowance for Meals Provided at No Cost to the Employee

Reduced Subsistence Allowance

Border City Travel – Discontinued

 Expense Reports

Travel Expense Account Codes

For travel occurring prior to January 1, 2016:

For travel occurring on and after January 1, 2016:

Travel Authorizations

Moving of Employees’ Personal Effects Account Codes

For moves occurring prior to January 1, 2016:

For moves occurring on and after January 1, 2016:

Updates for Subsistence Rates

Rate File, Policy Documents, and Links

DH:jm

• Per diem rates for the State of Kansas shall consist of the following:
• • Meals and Incidentals Expense (M&IE) rate -
    • Meals – the cost of meals, taxes and tips.
    • Incidentals Expense –all fees and tips to hotel porters, bellhops, doormen, and maids.
• • Lodging rate -
    • Employees may be reimbursed for actual lodging expense incurred, not to exceed this rate. 
    • No allowance for any tips is included with this rate. 
    • Taxes are paid in addition to this lodging rate.
    • For international travel, payment for actual lodging expenses is allowed and not subject to rate limitations as previously indicated in Informational Circular 16-A-006.  Lodging incidentals, which consist of fees and tips to hotel porters, bellhops, doormen, and maids, are included in the M&IE rate and thus should not be included with actual lodging expense reimbursement.
• Subsistence rates will consist of a standard per diem rate and non-standard area per diem rates. The standard rate is used except when the travel location is specified as a non-standard area, in which case, the per diem rate for that non-standard area is used. 
• Meal reimbursement will be based on quarter days with the daily reimbursement amount divided equally between quarters. Meal per diem will be provided for the quarters the traveler departs and returns. 
• The daily lodging expense limitations may be exceeded, with approval by the agency head or agency head’s designee, by the lesser of either:
  • an additional 50% of the applicable lodging expense limitation; or
  • the actual lodging expense incurred.
• Agencies may authorize payment or reimbursement for actual lodging expenses when an employee is required or authorized to attend a conference, and the lodging rate exceeds the applicable lodging expense limitation (including the additional 50%).  The agency head must be provided with conference materials and rates.  These should be maintained with travel documentation.
• For employees that qualify for a same-day travel meal allowance, the agency will determine the appropriate amount to be reimbursed based on 15%, 35% or 50% (breakfast, lunch or dinner) of the daily M&IE rate.  The meal is to be determined by the agency.  A new expense type “Same Day Travel Meal” has been added to the Travel & Expense module for the meal associated with same day travel. See the Employee Travel Expense Reimbursement Handbook for the guidelines for receiving a meal with same day travel.
• If meals are provided during a given travel day, the agency will reduce the M&IE rate by the amount of the meal that was provided, based on 15%, 35% or 50% (breakfast, lunch or dinner) of the daily M&IE rate.  For partial days, the quarter amount is calculated first and then the meal deduction % is applied. 
• If all meals are provided for a day, the reduction to the M&IE rate will be 100% and there will be no allowance for incidentals expense reimbursed to the traveler.
• Reduced subsistence allowance requires approval of the agency head or agency head’s designee, using the form DA-37 Reduced Subsistence Allowance.
• Border City Travel Rule and designated cities are discontinued. However, the Department of Administration will consider requests for blanket approval of specific out-of-state travel locations.  The requests will come from the agency head or designee and may be renewed annually.
• SMART expense reports must be completed for reimbursable expenses to the traveler (such as mileage, meal per diem, etc.).   It is recommended, but not required, that prepaid expenses be added to the expense report.  This includes, but is not limited to, lodging, transportation rental and fares, fuel charged to a state credit card or account, conference registration and lodging, etc. 
• SMART expense reports should include M&IE entered for one day at a time rather than for a range of days on one line. 
• The new series of travel account codes, 525510 through 525590 will be used only in the Travel & Expense module for all travel occurring on and after January 1, 2016.  The existing travel account code series for in-state, out-of-state, and international travel will continue to be used outside of the Travel & Expense module by all agencies. 
• Within the Travel & Expense module, the new account codes, 525510 through 525590, will be used for all travel locations (in-state, out-of-state and international).  The location entered for an expense report will be used to determine the in-state, out-of-state and international designation which will be provided in SMART reports. The charts below provide the existing and new account codes and appropriate usage: 
• Beginning November 13, 2015, travel authorizations created for travel occurring on and after January 1, 2016, will use the new account codes, 525510 through 525590, as well as the new travel rates. 
• New account code 521500 will be used only in the Travel & Expense module for moving of employees’ personal effects occurring on and after January 1, 2016.  The existing account codes for in-state and out-of-state moving of employees’ personal effects will continue to be used outside the Travel & Expense module by all agencies. 
• Within the Travel & Expense module the new account codes 521500 will be used for both in-state and out-of-state moving of employees’ personal effects.  The location entered for an expense report will be used to determine the in-state and out-of-state designation which will be provided in SMART reports. The charts below provide the existing and new account codes and appropriate usage: 
• State subsistence rates will be updated on April 1 and October 1 each year and will be effective until the next semi-annual update.  Historical rate information will be maintained in SMART. 
• An electronic file with the CONUS standard rate and non-standard area rates (for the continental United States) will be available at the Office of the Chief Financial Officer, Travel Information for State Employees website at: Travel Information for State Employees
• The Employee Travel Expense Reimbursement Handbook is being updated to reflect these policy changes.  See the Employee Travel Expense Reimbursement Handbook for complete travel policy information available at the Office of the Chief Financial Officer, Travel Information for State Employees website at: Travel Information for State Employees
• The Office of the Chief Financial Officer Policy Manuals are being updated to reflect these policy changes. Policy Manuals are available at the Office of the Chief Financial Officer website at: Policy Manual
• Agencies will be notified when the revised Employee Travel Expense Reimbursement Handbook and Policy Manuals, and the CONUS rate file are available on the Department of Administration website. 

As authorized by K.S.A. 75-3207a, the Secretary of Administration has fixed subsistence rates for travel occurring on and after January 1, 2016.  The Employee Travel Expense Reimbursement Handbook is being updated to include information regarding subsistence for travel occurring on and after January 1, 2016.  Agencies will be notified when revisions are complete. 

For State of Kansas travel, federal subsistence rates will be followed.  Subsistence rates are based on travel location and travel dates with seasonal rates listed for many locations.  If a specific travel location isn’t listed (or within the location definition), the standard rate, or “other” location rate is used.  The following rates apply to many locations across the contiguous United States (CONUS). 

For CONUS locations, the following standard per diem rates apply for travel occurring on and after January 1, 2016:

M&IE - $51

Lodging - $89

SMART contains the official subsistence rates for CONUS and OCONUS travel locations and will be updated each October 1 and April 1.  International subsistence rates are not loaded into SMART. Employees will obtain Meals and Incidental Expense (M&IE) rates for international travel locations directly from the U.S. Department of State (DOS) website listed below.  For international travel, payment for actual lodging expense is allowed. 

The table below shows the source of the effective rates:

Source of Subsistence Rates -

Contiguous United States (CONUS) -

The U.S. General Services Administration (GSA) maintains the M&IE rates and lodging rates for travel locations in the contiguous United States -
U.S. General Services Administration website:http://www.gsa.gov/portal/content/104877
Outside Contiguous United States (OCONUS):

(Alaska, Hawaii, and U.S. Territories/Possessions) -

The U.S. Department of Defense (DOD) maintains the M&IE rates and lodging rates for travel locations within Alaska, Hawaii and U.S. Territories/Possessions -
U.S. Department of Defense website: http://www.defensetravel.dod.mil/site/perdiemCalc.cfm

International Locations -

The U.S. Department of State (DOS) is the source for M&IE rates only for international travel locations-
U.S. Department of State website:https://aoprals.state.gov/web920/per_diem.asp
For international travel, payment for actual lodging expense is allowed.
Note for using federal websites:

For CONUS and OCONUS travel, if SMART is not accessible, employees may access subsistence rates through the federal websites. However interim federal website updates may occur subsequent to the semi-annual SMART updates each October 1 and April 1. CONUS rates are published on an annual basis but the annual file is updated periodically throughout the year with no interim files published. OCONUS and international rates are updated and published on a monthly basis. Be aware that any interim updates for CONUS or OCONUS locations are not valid until reflected in SMART. For international travel, only the October 1 and April 1 subsistence files should be used to locate the M&IE rates.

If employees utilize the federal websites to find M&IE and lodging rates, those rates should be used as follows:

Rates published October 1 - for travel occurring between October 1 and March 31 of each year.
Rates published April 1 - for travel occurring between April 1 and September 30 of each year.

Exception to Lodging Expense Limitations:

K.S.A. 75-3207a(f) provides that the daily lodging expense limitations established may be exceeded, upon approval by the agency head or designee, by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred. 

These lodging limits continue to be applied to the lodging rate before taxes.  Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes. 

Conference Lodging qualified under K.A.R. 1-16-18a(e):
Agencies may authorize payment or reimbursement for actual lodging expenses when an employee is required or authorized to attend a conference, and the lodging rate exceeds the applicable lodging expense limitation (including the additional 50%).  The agency head must be provided with conference materials and rates.  These should be maintained with travel documentation. 

Reduced Meal Allowance:
If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or supplied without cost by another party, the daily M&IE rate for the travel location should be reduced based on the percentages listed below.  For partial days, the quarter amount is calculated first and then the deduction percentage is applied. The M&IE deduction percentages are as follows: 

Breakfast - 15%

Lunch - 35%

Dinner - 50%

Same Day Meal Allowance:
Reimbursement for a same day meal, in accordance with K.A.R. 1-16-18(c)(3), is calculated as a percentage of the daily M&IE rate for the travel location, based on the approved meal, as follows: 

Breakfast - 15%

Lunch - 35%

Dinner - 50%

Queries in SMART 9.2 to Obtain M&IE Rates and Lodging Rates:
Queries will be available in SMART 9.2 to obtain CONUS and OCONUS M&IE and lodging locations and rates.  Historical locations and rates from each semi-annual update will be maintained in SMART.

DH:jm

This informational circular serves to revise a reference to border city travel within Informational Circular 16-A-010 and provide additional out-of-state travel approval guidance.  The section of Informational Circular 16-A-010 entitled “Border City Travel – Discontinued” should be disregarded. 

Current Policy: 

Kansas Statute Annotated (KSA) 75-3208 generally prohibits out-of-state travel, but also includes broad exceptions for each branch of government.  Generally, the agency head is vested with authority to grant written approval for out-of-state travel.

Kansas Administrative Regulation (KAR) 1-16-18 established the border city travel rule for reimbursement of travel expenses incurred by state employees on official business.  Travel to border cities is reimbursed at in-state rates and does not require the specific out-of-state approval vested to the agency head through KSA 75-3208.  Effectively, the border city travel rule has provided a blanket out-of-state travel approval to designated cities/areas. 

Revised Policy Effective January 1, 2016: 

With the recent SMART system upgrade, and the forthcoming adoption of federal travel reimbursement rates, the border city concept is no longer applicable since travel reimbursement rates will be linked directly to the actual travel location.  Proposed amendments are underway to eliminate the border city travel rule from within current KARs. 

Note that on January 1, 2016, Policy Manual (PM) 3,904 Border City Designation – Border City Rule will no longer be effective and will be deleted. 

Note also that revisions to Policy Manual 10,001 Authorized Agency Officials and Approved Out-of-State Travel Locations/Areas and PM 3,817 Agency Travel Approval – Lodging Reimbursement Rates and Out-of-State Travel are being published and will be effective beginning January 1, 2016. 

Absent the formal blanket approval provided through the border city travel rule, best practice is for the agency head to grant written approval of all out-of-state travel on a trip by trip basis under KSA 75-3208.  See the Out-of-State Approval Requirements - Approval Method found in PM 3,817. 

To address concerns expressed by agencies that incur frequent out-of-state travel, under KSA 75-3728 the Department of Administration (DofA) has established an alternative method for out-of-state travel approval to designated locations/areas. 

The DA-115 form has been retitled as “Authorized Agency Officials and Approved Out-of-State Travel Locations/Areas”.  If an agency head chooses to establish an internal agency policy for all travel to approved out-of-state locations/areas, adopting such a policy is to be formalized by completing and submitting a revised DA-115.  The revised form includes a section for an agency to list the approved out-of-state locations/areas.  In order for the agency internal policy to be effective, it must be received by the DofA, Office of the Chief Financial Officer, Agency Audit Services Team and may be emailed to: ARPreaudit@da.ks.gov.  The DA-115 is the source for the DofA to verify agency head or designee approved out-of-state travel locations/areas.  The DofA will not require trip-specific out-of-state travel approval documentation for locations/areas identified on the DA-115. 

If the approved out-of-state travel locations change, a new DA-115 must be completed with all current approved locations/areas listed.  Each form submitted replaces in total the previous form. 

As an internal control review, agency internal policies established under this alternative method and documented on the DA-115 will be reviewed against actual travel locations. 

The revised DA-115 form can be obtained at the DofA Document Center website as follows: Document Center.    

PM 10,001 Authorized Agency Officials and Approved Out-of-State Travel Locations/Areas should be reviewed for additional information on the DA-115 form.

DH:jm

This Informational Circular is to announce that the Employee Travel Expense Reimbursement Handbook and Employee Travel Expense Reimbursement Summary Tri-fold have been updated to reflect changes to travel subsistence rates effective for travel occurring on and after January 1, 2016.

In addition, the following Policy Manuals have been updated to reflect changes to travel policies announced previously and will be effective beginning January 1, 2016:

• PM 3,903 Employee Travel Expense Reimbursement Handbook
• PM 3,607 Employee Moving Expense Reimbursement
• PM 10,754 Prepaid Turnpike Accounts

Note that on January 1, 2016, Policy Manual 3,904 Border City Designation – Border City Rule is no longer effective and will be deleted.

In addition, note that the DA-37 form has been retitled as “Reduced Subsistence Allowance” and will allow an agency to pay an employee a reduced amount for M&IE allowance or lodging expense with prior approval of the agency head or designee.

Procedures for the revised DA-37 can be found in the Employee Travel Expense Reimbursement Handbook.  The revised DA-37 form can be obtained at the DofA Document Center website as follows: http://www.admin.ks.gov/resources/document-center.    

SMART query to obtain CONUS subsistence rates:
A query “KS_EX_CONUS_RATES” is available in SMART 9.2 which provides the effective CONUS and OCONUS travel locations and subsistence rates. SMART will be updated semi-annually with the October 1 and April 1 subsistence rates.

DH:jm
 

This Informational Circular is issued to clarify that, for state employee travel, the subsistence reimbursement rate is determined by the location of the official state business.  The M&IE and lodging rates for the official state business location are used for subsistence reimbursement for the entire trip. This includes travel where lodging may not be available at the official business location.  As a reminder, for travel occurring January 1, 2016 and thereafter, the standard subsistence rate is used unless the travel location is specified as a non-standard area, in which case the subsistence rate for that non-standard area is used.

When travel consists of official state business in several locations, including both a standard rate location and a non-standard area rate location, subsistence rates are adjusted as follows:

• The subsistence rate changes to the new appropriate rate for the subsequent official business location beginning with the quarter day in which the employee arrives at the subsequent official business location.

• If there are multiple business locations in the same quarter, the rate for the entire quarter will be based on the last official business location within that quarter.

The Originating Location field should list the employee’s official station or domicile. To ensure the appropriate rates are applied in SMART, the Location field should list the official business location.  This includes subsistence expense lines for travel on the day of return to the official station or domicile.

Agencies are reminded of two exceptions related to subsistence reimbursement limitations:

• The established daily lodging expense limitations may be exceeded, upon approval by the agency head or designee, by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.
• An agency may pay an employee a reduced amount for M&IE allowance or lodging expense with prior approval of the agency head or designee.  The agency should complete form DA-37 Reduced Subsistence Allowance and obtain agency head or designee approval signature and date in advance of the beginning of the date of the travel event.

See the Employee Travel Expense Reimbursement Handbook for additional information: State Employee Travel Center.

DH:jm

Informational Circular (IC) 16-A-016 was issued on April 4, 2016 to announce Policy Manuals (PM) and forms that have been revised and are effective immediately.  IC 16-A-018 is issued to correct two dates listed in IC 16-A-016 as follows:

• Two-step process to record expenditures and replenish imprest and petty cash funds is recommended to be followed currently and will be required beginning July 1, 2016.
• The Fiscal Year End Encumbrance process for imprest and petty cash funds is recommended for FY 2016 fiscal year end and will be required beginning July 1, 2016.

IC 16-A-016 was issued to announce that the following Policy Manuals have been revised and are effective immediately:

• PM 3,351 Official Hospitality Payment Guidelines
• PM 4,272  Classification of Funds
• PM 10,752  Petty Cash Fund Policy
• PM 10,802  Imprest Fund Policy
• PM 14,002  Fiscal Year End Closing Including Fiscal Year Determination

In addition, the following forms associated with PM 10,802 Imprest Fund Policy have been revised as well:

• Form DA-152  Checkbook Record – Imprest Fund
• Form DA-153  Monthly Imprest Fund Reconciliation
• Form DA-154  Imprest Fund Application / Maintenance

Agencies should take special note of the more significant policy changes included in PM 10,752 and PM 10,802 as follows:

Two-step process to record expenditures and replenish the fund –
Prior to the 15^th day of the following month, agencies must do the following:

• Replenish their petty cash and imprest funds.
• Record petty cash and imprest fund expenditures to the appropriate vendors.
• The expenditures are to be recorded in, and a replenishment voucher drawn from, the budgetary fund(s) from which payments would have been paid if they had not been paid from the petty cash or imprest fund. 
• Agencies must follow procedures in the following SMART Job Aids -
  • Imprest Fund-Petty Cash Fund – Record Expenditures by Creating a Voucher
  • Imprest Fund-Petty Cash Fund – Replenish Fund by Creating a Voucher.

• This two-step process is recommended to be followed currently and will be required beginning July 1, 2016.

Fiscal Year End Encumbrance –

• For petty cash and imprest fund expenditures not expected to be recorded in SMART by the fiscal year end cutoff for accounts payable vouchers, an encumbrance must be created using the appropriate budget period and funding. 
• Either a purchase order (PO) or a general ledger encumbrance (GL Encumbrance) is created as appropriate:
  • a purchase order (PO) is created when the vendor is known or when the agency is the vendor (e.g., for a payroll error correction);
  • a general ledger encumbrance (GL Encumbrance) is created for non-vendor specific encumbrances.
• The fiscal year encumbrance process is recommended for FY 2016 fiscal year end and will be required beginning July 1, 2016.

The revised Policy Manuals can be obtained at the Department of Administration (DofA) website at: http://www.admin.ks.gov/offices/chief-financial-officer/policy-manual.

The revised forms can be obtained at the DofA website at: http://www.admin.ks.gov/resources/document-center.  

The SMART Job Aids referenced in this informational circular can be obtained at the DofA website at: http://smartweb.ks.gov/training/accounts-payable.

DH:jm

Contact

This informational circular serves to establish a policy for tracking all contract spend in SMART effective July 1, 2016.  Capturing and monitoring the spend levels of goods and services provided through contracts allows the Department of Administration to negotiate contract pricing and lower costs for agency purchases of goods and services.  This includes both statewide and agency specific contracts.

Existing Practices:

Previously, for audit trail purposes, agencies have been advised to enter contract numbers in the Comments field in SMART for purchases under $5,000.  However, this practice has not allowed SMART to capture contract spend for reporting and analysis purposes.  Requiring the use of the SMART Contract ID field will make this possible.

New Policy:

Effective July 1, 2016, all spend from contracts will be tracked through the requisition process with the contract number entered into the SMART Contract ID field. 

Whenever a state contract is used, regardless of the amount, the purchase must begin with a SMART purchase requisition.  The appropriate contract number for the goods and services being purchased, must be entered in the Contract ID field on the purchase requisition.  The purchase requisition will source to a purchase order, and then be pulled into the voucher to systematically record the expenditure on the contract.  Association of the proper contract number allows the amount of the purchase to be captured by SMART and applies the expense to the contract as contract spend.  NOTE: The Contract ID field is not available when bypassing the requisition/purchase order process.  Furthermore, any entry of the contract number into the Comments field on the voucher will be discontinued as it does not allow for SMART to track the contract spend.  

Caution should be used to ensure the correct contract number is entered on the purchase requisition.   Payments may be put on hold or rejected if an incorrect contract number is entered or the contract number is missing.  For purchase requisitions with multiple lines, ensure the appropriate contract number is entered on each line.

This SMART Procurement Work Flow diagram is provided to assist agencies in complying with the new policy requiring the use of the SMART Contract ID field while working through the procurement process.  It may also be accessed directly from the Office of Procurement and Contracts webpage at: Procurement Training.

Note: Universities are statutorily exempt from using the SMART Procurement Module.  Therefore universities will be expected to provide data related to contract spend upon request.

Please see State of Kansas Travel Handbook 4100 for information on how meals are reimbursed. 

As authorized by K.S.A.75-3207a, the Secretary of Administration has fixed the rates for FY 2015  at:

Meal Allowance:

*or actual to either a maximum of $127 per day or the allowable meal expense on the U.S. Department of State website for Foreign Per Diem Rates by Location

International Meal Allowance:

Beginning in FY2015, international travelers may use the meal per diem rates for a particular city as established by the U.S. Department of State on their website (http://aoprals.state.gov/web920/per_diem.asp) under the heading Foreign Per Diem Rates by Location. Look up the country and then the city and find the meal allowance under the column heading M & IE Rate.

Reduced Meal Allowance:

If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or supplied without cost by another party, the meal allowance should be reduced as shown in the table above.

Same Day Meal Allowance:

The rates as established in accordance with K.A.R. 1-16-18(c)(3) are the same as indicated in the table above.

 Lodging Expense Limitations:

K.S.A. 75 3207a(f) provides that the daily lodging expense limitations established above may be exceeded by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes. Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

PF:js

 

• Requirements to report payments where the 1099 data was not recorded in SMART:
  1. The vendor/client must be in the SMART vendor table.
  2. All reportable payments must be submitted via ServiceDesk using the EXCEL template referenced below
  3. All payments reported through the Office of System Management will be processed through SMART. Paper 1099s are generated and mailed to the vendors. The 1099 information will be electronically submitted to the IRS.

There is NO option for the agency to print the forms and have the Office of System Management report to the IRS.

Below are the policy and procedures.

While most 1099 transactions are recorded in the Statewide Management, Accounting and Reporting Tool (SMART), and require no additional action by state agencies; there are some payments that occur outside of SMART or the information to be reported to the IRS is not in SMART. These transactions result in unique reporting procedures comprised of the following:

• • Locally administered interest payments of $10 or more are to be reported on IRS Form 1099-INT. These payments typically represent interest paid from trust funds to clients of institutions with the Department for Aging and Disability Services and the Department of Corrections.
  • State Fair premiums are to be reported on Form 1099-MISC.
  • Other payments such as non-employee awards not paid directly to the recipient from SMART.
  • Note that purchases of Real Property are now reported in SMART, and require the appropriate SMART preferences to record the appropriate data.

To report non-SMART payments for form 1099 purposes the agency will need to confirm the vendor is in the SMART vendor table with the appropriate 1099 type and class, and withholding is turned on. If the vendor is not in the vendor table, the agency must add the vendor to SMART including the appropriate 1099 type and class, and turn withholding on.

Complete the EXCEL template“PS_WTHD_TRAN_TBL_update_template” (Excel file attachment included at the bottom of this circular) for all non-SMART 1099 reportable payments. The completed template needs to be received by the Office of System Management by January 13, 2015 to ensure the 1099s are distributed by the January 31, 2015 deadline.

The template has the columns listed below. Do not insert or delete columns or rows. Do not change the formatting. Beginning with line 2 (replacing the sample data), complete one line for each payment (add lines as necessary for additional withholding types/classes). The gray columns are defaults and should not be changed. If 499 lines are not sufficient, copy line 500 down. When completed, attach the EXCEL spreadsheet to a Service Desk ticket with the heading “non-SMART 1099”. Note if you have leading zeros precede them with an apostrophe ‘, i.e. vendor id ‘0000123456.

BUSINESS_UNIT: 5 characters must have leading zeros (your agency number)

WTHD_ENTITY: IRS

WTHD_TYPE: as listed in the vendor table (1099, 1099I, 1099G, 1099D)

WTHD_JUR_CD: FED

WTHD_CLASS: as listed in the vendor table, with leading zeros.

WTHD_RULE: RULE0

VENDOR_SETID: SOKID

VENDOR_ID: 10 digits with leading zeros, as assigned by SMART .

VNDR_LOC: the vendor location with the appropriate 1099 type and class, usually 001, with leading zeros

ADDRESS_SEQ_NUM: 1

PYMNT_ID: Blank

VNDR_REGIST_ID: SSN or FEIN, 9 digits including leading zeros

PYMNT_DT: date of payment, mm/dd/yyyy format

WTHD_DECL_DATE: Same as date of payment

WTHD_BASIS_AMT: The taxable amount for this 1099 type and class for 2013.

DESCR100: 100 characters of your choice – no punctuation, no special characters

Additional Resources:

Training guide for setting up vendors for 1099 reporting and an account code guide:
Training Guide and Account Code Guide

IRS guide to each type of 1099, including the payments for each:
IRS Guide to Types of 1099's

Page 6 and 7 of the job aid “Create a 1099 Voucher” has Examples of payments by 1099 type and class:
Create a 1099 Voucher Job Aid

SMART withholding codes:
SMART Withholding Codes Job Aid

Attachment: IC 15-a-003 - PS_WTHD_TRAN_TBL_update_template

Standard mileage rates effective January 1, 2015.  The IRS rate for privately owned automobiles increases to 57.5 cents per mile while the moving mileage rate decreases to 23 cents per mile. 
 

K.S.A. 75-3203a provides that the mileage reimbursement rate shall not exceed the lowest of the following rates:

1. the rate allowed by the IRS;
2. the rate used in preparing the governor’s budget report under K.S.A. 75-3721, and amendments thereto; or
3. any revision of the rate as specifically directed in appropriation acts of the legislature.

Thus, per the requirements of K.S.A. 75-3203a, the Department of Administration will NOT raise the privately owned automobile reimbursement rate for the remainder of FY 2015.  However, the moving mileage rate must decrease so as not to exceed the IRS moving mileage rate.

As authorized by K.S.A.75-3203a, the Secretary of Administration has fixed the following private vehicle maximum mileage reimbursement rates for the remainder of FY 2015, effective January 1, 2015:

     Reduced -
         23¢ per mile for moving mileage rate

     Unchanged -
         56¢ per mile for privately owned automobile
         53¢ per mile for privately owned motorcycle
         $1.31 per mile for privately owned airplane (based on air miles rather
          than highway miles)

DH:jm

 

Informational Circular No.  15-A-005     Supersedes 03-A-020
Office of the Chief Financial Officer
Date of this Informational Circular:  January 26, 2015
Effective Date:  December 21, 2014
OSM Contact Name: Nancy Ruoff

Telephone: (785) 296-2853

Email: Nancy.Ruoff@da.ks.gov

Approval:  Refer to 15-P-028 
Summary:  Addition of Earnings Code 'COM' for Reimbursement of Personal Communication Devices Used for State Business and Other Accounting Policy and Procedure Regarding Personal/State-Issued Mobile Devises  
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                           

Executive Order 14-06, signed by the Governor on December 9, 2014, authorizes mobile device reimbursement for State employees to offset the cost to the employee for using his/her personal device for State business.  The amount of the monthly mobile device reimbursement shall be capped at and not exceed the rate of $30.00 per employee.  Mobile device allowances other than through reimbursement are prohibited.

The approved mobile device reimbursement will be paid monthly and included in the employee’s paycheck.  However, the reimbursement will not be considered as taxable income to the employee since it is a reimbursement for the business use of an employee’s personal mobile device.  Additionally, this reimbursement does not constitute an increase to base pay, and will not be included in the calculation of percentage increases to base pay due to salary increases, promotions, etc.

In order to administer the reimbursement, a new earnings code has been added to SHARP effective December 21, 2014.  The following earnings code is eligible to be used starting with the pay period beginning December 21, 2014 through January 3, 2015 paid January 16, 2015.

This new earnings code will not be included in KPERS wages for calculating KPERS paycheck deductions. Earnings code COM will be mapped to flow through payroll using the same account codes as earnings code (MVT) for the reimbursement of moving expenses. Therefore, the account codes that COM is mapped to are 510100, 510110, 511100, and 511110.

SHARP Agencies

The Office of Personnel Services has created the COM (Communication Device) Time Reporting Code (TRC) and has mapped the COM TRC to the COM Earnings Code effective December 21, 2014. The COM TRC is now visible in Time and Labor timesheet TRC dropdown lists. The dollar amount for COM should be entered on the second Saturday of the time period or earlier in the pay period if the employee is not active on the second Saturday.

The Office of Systems Management, Payroll Systems Team, is responsible for adding the new earnings code in the SHARP system.  Regents’ institutions are responsible for implementing the new earnings code in their payroll systems.

Other Accounting Policy and Procedure Regarding Personal/State-Issued Mobile Devices

Note that at a minimum, State business-related calls and/or data on an employee’s personal mobile device may be subject to disclosure requests under the Kansas Open Records Act.

Agencies shall maintain current records of employees designated to receive state-issued mobile devices or reimbursement for the use of personal mobile devices, in accordance with requirements established by the Office of Information Technology Services (OITS).

Note that state-issued as well as personally owned mobile devices for which reimbursement is received shall be enrolled into the Mobile Device Management product to be selected by OITS.

Personal Mobile Device Reimbursement

The agency head or designee must provide documented approval of the reimbursement.  Additional information from OITS will follow.

In no instance will the employee be reimbursed more than the monthly cost to the employee in an amount not to exceed $30.00.

In order to receive reimbursement the mobile device number must be provided to the state under OITS procedures, including notification within five business days of any mobile device number changes.

State-Issued Mobile Devices

For review and audit trail purposes, monthly statements from mobile service providers for state-issued mobile devices are required. These should be attached to the agency's payment voucher documentation.

The agency shall review the monthly statement for billing accuracy and to ensure that any additional charges resulting from personal use are reimbursed to the agency. The SMART electronic voucher approval indicates the agency’s acknowledgement and review of compliance with the mobile device policy.

More than de minimis personal use of a State-issued mobile device without written authorization by the employee’s agency head is prohibited except in emergencies. When personal use causes the monthly base service plan rate to be exceeded, reimbursement must be made to the State for the overage. All reimbursements are to be made within 15 days of receipt and reconciliation of the monthly statement. If an employee reimburses the agency, note the receipt voucher number on the invoice copy retained with the payment voucher documentation. The calculation of the reimbursement highlighting the overage for which reimbursement is made should also be attached to the payment voucher documentation.

The State of Kansas is exempt from paying State and local sales taxes, and federal excise tax on state-issued mobile devices. However, the State must pay the Universal Service charge and taxes that are passed through from other carriers.

The State is self-insured so mobile device replacement or insurance provisions should not be a part of mobile device agreements.

Agreements with mobile device providers should allow for the provisions of the State's Prompt Payment Act.

The Office of the Chief Financial Officer may review selected payments for compliance with Executive Order 14-06.  In addition, the appropriateness of the plan for the agency's needs may be reviewed.

SG:NTR:ewb

 

In House Substitute for SB 112, the 2015 Legislature enacted the state’s main appropriation bill for FY 2016 and FY 2017.  Sections 181(a), (b), (c) contain provisions that prohibit any state agency during FY 2016 and FY 2017 from spending funds on subscriptions to newspapers or magazines, including any electronic subscriptions, with the exception of the Judicial Branch, the Historical Society, the State Library, the Board of Regents and its institutions.  Your agency should be in compliance with these sections of the appropriation bill.  If you have any questions, please contact your assigned budget analyst.

DH:me                                                        

As authorized by K.S.A.75-3203a, the Secretary of Administration has fixed the private vehicle maximum mileage reimbursement rates for FY 2014 at:

56¢ per mile for privately owned automobile
53¢ per mile for privately owned motorcycle
24¢ per mile for moving mileage rate
$1.33 per mile for privately owned airplane (based on air miles rather than highway miles)

PF:br

Please see State of Kansas Travel Handbook 4100 for information on how meals are reimbursed.

As authorized by K.S.A.75-3207a, the Secretary of Administration has fixed the rates for FY 2014 at:

Meal Allowance:

*or actual not to exceed $105 per day

Reduced Meal Allowance:

If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or supplied without cost by another party, the meal allowance should be reduced as shown in the table above.

Same Day Meal Allowance:

The rates as established in accordance with K.A.R. 1-16-18(c)(3) are the same as indicated in the table above.

Lodging Expense Limitations:

K.S.A. 75 3207a(f) provides that the daily lodging expense limitations established above may be exceeded by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes. Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

PF:br

Requirements to report payments where the 1099 data was not recorded in SMART:

1. The vendor/client must be in the SMART vendor table. 
2. All reportable payments must be submitted via the help desk using the EXCEL template referenced below
3. All payments reported through the Office of System Management will be processed through SMART.  Paper 1099s are generated and mailed to the vendors.  The 1099 information will be electronically submitted to the IRS. 

There is NO option for the agency to print the forms and have the Office of System Management report to the IRS.

Below are the policy and procedures.

While most 1099 transactions are recorded in the Statewide Management, Accounting and Reporting Tool (SMART), and require no additional action by state agencies; there are some payments that occur outside of SMART or the information to be reported to the IRS is not in SMART. These transactions result in unique reporting procedures comprised of the following:

• Locally administered interest payments of $10 or more are to be reported on IRS Form 1099-INT. These payments typically represent interest paid from trust funds to clients of institutions with the Department for Aging and Disability Services and the Department of Corrections.
• State Fair premiums are to be reported on Form 1099-MISC.
• Other payments such as non-employee awards not paid directly to the recipient from SMART.
• Note that purchases of Real Property are now reported in SMART, and require the appropriate SMART preferences to record the appropriate data.

To report non-SMART payments for form 1099 purposes the agency will need to confirm the vendor is in the SMART vendor table with the appropriate 1099 type and class, and withholding is turned on.  If the vendor is not in the vendor table, the agency must add the vendor to SMART including the appropriate 1099 type and class, and turn withholding on.

Complete the EXCEL template “PS_WTHD_TRAN_TBL_update_template” (Excel file attachment included at the bottom of this circular) for all non-SMART 1099 reportable payments.  The completed template needs to be received by the Office of System Management by January 13, 2014 to ensure the 1099s are distributed by the January 31, 2014 deadline.

The template has the columns listed below.   Do not insert or delete columns or rows. Do not change the formatting.  Beginning with line 2 (replacing the sample data), complete one line for each payment (add lines as necessary for additional withholding types/classes). The gray columns are defaults and should not be changed.  If 499 lines are not sufficient, copy line 500 down.  When completed, attach the EXCEL spreadsheet to a Help Ticket with the heading “non-SMART 1099”.  Note if you have leading zeros precede them with an apostrophe ‘, i.e. vendor id ‘0000123456.

BUSINESS_UNIT:  5 characters must have leading zeros (your agency number)

WTHD_ENTITY:  IRS

WTHD_TYPE:  as listed in the vendor table (1099, 1099I, 1099G, 1099D)

WTHD_JUR_CD:  FED

WTHD_CLASS:  as listed in the vendor table, with leading zeros.

WTHD_RULE:   RULE0

VENDOR_SETID: SOKID

VENDOR_ID:  10 digits with leading zeros, as assigned by SMART .

VNDR_LOC:  the vendor location with the appropriate 1099 type and class, usually 001, with leading zeros

ADDRESS_SEQ_NUM: 1  

PYMNT_ID:  Blank

VNDR_REGIST_ID:  SSN or FEIN, 9 digits including leading zeros

PYMNT_DT:   date of payment, mm/dd/yyyy format        

WTHD_DECL_DATE:  Same as date of payment

WTHD_BASIS_AMT:   The taxable amount for this 1099 type and class for 2013.

DESCR100:  100 characters of your choice – no punctuation, no special characters

Additional Resources:

Training guide for setting up vendors for 1099 reporting and an account code guide:
Training Guide and Account Code Guide

IRS guide to each type of 1099, including the payments for each:
IRS Guide to Types of 1099's

Page 6 and 7 of the job aid “Create a 1099 Voucher” has Examples of payments by 1099 type and class:
Create a 1099 Voucher Job Aid

SMART withholding codes:
SMART Withholding Codes Job Aid

Attachment:  IC 14-a-003 - PS_WTHD_TRAN_TBL_update_template

MJF

In order to record and track certain state revenues in accordance with statutory provisions, the following account code is being established in SMART effective immediately: 

412720            Commercial Vehicle Fees (Agency 565)

In addition, the following accounts are obsolete and effective immediately, these accounts will be closed:

514401            Voluntary Retirement Incentive Cash Option

514402            Voluntary Retirement Incentive Vacation Payout

514403            Voluntary Retirement Incentive Sick Leave Payout

555700            Homestead Property Tax Relief

555710            Oil Lease Operator Property Tax Payments

These changes will be updated shortly in the Uniform Receipt Classification Account Code filing (PM No. 6,002) and the Uniform Expenditure Classification Account Code filing (PM No. 7,002).

Effective July 1, 2013, House Bill 2139 of the 2013 legislative session abolished the cancelled warrants payment fund; thereby transferring the responsibility for payment of previously escheated checks (outlawed warrants) to the Unclaimed Property Division of the Kansas State Treasurer.   As a result of this legislation, Policy Manual Filing No. 11,965, Payment of Previously Outlawed Warrants is being revised.

What checks have been escheated?

• Income tax refund checks issued by the Kansas Department of Revenue with check issue dates through May 31, 2012
• SHARP Payroll checks, including regent checks, with check issue dates through June 30, 2010
• STARS miscellaneous checks with check issue dates through June 30, 2010

What checks have been transferred to unclaimed property?

• Income tax refund checks issued by the Kansas Department of Revenue with check issue dates July 1, 2008 through May 31, 2012
• SHARP Payroll checks, including regent checks, with check issue dates July 1, 2008 through June 30, 2010
• STARS miscellaneous checks with check issue dates July 1, 2008 through June 30, 2010

What happens once checks have been escheated and transferred to unclaimed property?
Once escheated checks are sent to the Unclaimed Property division of the State Treasurer's Office, the monies are held in the payees name until they are claimed by the original payee or a rightful heir.  Payees are able to search for unclaimed property by utilizing the Kansas State Treasurer's website (www.kansasstatetreasurer.com).

When will Payroll checks (including regent checks) with check issue dates after June 30, 2010 be escheated and transferred to unclaimed property?

• The Office of Systems Management is currently working with programming staff with the expectation that the Payroll escheatment process will be run prior to the end of fiscal year 2014. The transfer to unclaimed property will occur at the same time the escheatment process is run.
• The long-range plan will be to run the escheatment process on a monthly basis. In order to get caught up, several runs of the escheatment process will need to occur. Email blasts will be sent out via the SMART and SHARP listserves as escheatment processes are run.

What do agencies need to do before Payroll checks are escheated and sent to Unclaimed Property?
All agencies, including those agencies using federal awards pursuant to OMB Circular A-133 to fund administrative payments (payroll expenditures), are expected to review outstanding checks prior to the escheatment process.

Agencies have three options for handling an outstanding check:

• If it has been determined the payment is not due to the employee, the agency is responsible for canceling the payment.
• If it has been determined the payment was lost and the employee address has been verified, the agency may reissue the payment.
• If it has been determined the payment is due to the employee and such payment remains outstanding, and the agency has not cancelled or reissued the payment, the check will be escheated and transferred to unclaimed property. The employee then has the right to claim such outstanding payment from the Unclaimed Property Division of the Kansas State Treasurer.

A Job Aid has been written to provide agencies with a SMART query for reviewing outstanding payroll checks.  This Job Aid is located on the SMART Web website - Accounts Payable, Reports page: 
Using the KS_AP_PYR_EXT_CHK_TO_ESCHEAT Query.

Procedures for reissuing (reprinting) payroll checks can be found on the KDOA website - Office of Systems Management, Payroll Procedures page. Please refer to the following two items on this page:  'Paycheck Reprint Procedures(SHARP Agencies only)' and 'Paycheck Reprint Procedures for Regents Agencies'.
 

When will SMART checks be escheated and transferred to unclaimed property?

• The Office of Systems Management is currently working with programming staff with the expectation that the SMART escheatment process will be run prior to the end of fiscal year 2014. The transfer to unclaimed property will occur at the same time the escheatment process is run.
• The long-range plan will be to run the escheatment process on a monthly basis. In order to get caught up, several runs of the escheatment process will need to occur. Email blasts will be sent out via the SMART listserve as escheatment processes are run.

What do agencies need to do before SMART checks are escheated and sent to Unclaimed Property?
All agencies, including those agencies using federal awards pursuant to OMB Circular A-133, are expected to review outstanding checks prior to the escheatment process.

Agencies have three options for handling an outstanding check:

• If it has been determined the payment is not due to the vendor, the agency is responsible for canceling the payment.
• If it has been determined the payment was lost and the vendor address has been verified, the agency may reissue the payment.
• If it has been determined the payment is due to the vendor and such payment remains outstanding, and the agency has not cancelled or reissued the payment, the check will be escheated and transferred to unclaimed property. The vendor then has the right to claim such outstanding payment from the Unclaimed Property Division of the Kansas State Treasurer.

To cancel a payment with no reissue, a SMART Check Cancellation Request form will be required. The agency will need to complete and submit the DA-7CH - SMART Check Cancellation Request form. This form is located on the KDOA website, Office of Systems Management - Accounting Forms page.

To reissue a payment, a Lost Check Statement form will be required. The agency will need to complete and submit one of the following forms:
DA-6 Form - Lost Check Statement
DA-6A - Lost Check Statement - Address ID Change
DA-6B - Lost Check Statement - Return Check to Agency
DA-6C - Lost Check Statement - Return Check to Agency and Address ID Change
These forms are located on the KDOA website, Office of Systems Management - Accounting Forms page.

Agencies shall open a Service Desk Request in ManageEngine, attach the appropriate form, and submit the Service Desk Request. 

Please note: If a Setoff has been withheld pursuant to K.S.A. 75-6201 et seq. from an outstanding payment, and it has been determined the outstanding payment should be cancelled, the agency will need to make a notation on the Service Desk Request that payment being cancelled has a Setoff withheld.

SMART Job Aids have been written to provide agencies with tools for reviewing outstanding checks. These Job Aids are located on the SMART Web website - Accounts Payable - Reports page:

• Using the KS_AP_KDOR_EXT_CHK_TO_ESCHEAT Query (for use by KDOR)
• Using the KS_AP_OUTSTANDING_CHECKS Query
• Using the KS_ACCT_REGISTER Report

What about checks issued prior to July 1, 2008?

• Office of Systems Management, Central Systems Responsibilities Team will review any claim based upon a cancelled state warrant which is more than five years prior to the effective date of this legislation. If the claim is determined to be valid, the amount will be transferred to unclaimed property and the claimant then has the right to claim such outstanding payment from the Unclaimed Property Division of the Kansas State Treasurer. No claims will be accepted for checks issued prior to January 1, 1996.
• Form AR-95, Validation of Cancelled Checks for Submission to Unclaimed Property Check Issue Date January 1, 1996 through June 30, 2008, shall be completed and sent to Office of Systems Management as noted on the form.
• Form 'AR-95 - Validation of Cancelled Checks for Submission to Unclaimed Property Check Issue Date January 1, 1996 through June 30, 2008' is located on the KDOA Website, Office of Systems Management - Accounting Forms page.

How does an agency know what has been escheated?
SMART Job Aids have been written to provide agencies with tools for reviewing escheated checks. These Job Aids are located on the SMART Web website - Accounts Payable - Reports page:

• Using the KS_AP_PYR_EXT_ESCHEATED_CHK Query (to identify payroll checks)
• Using the KS_AP_STARS_EXT_ESCHEATED_CHK Query (to identify STARS Misc. checks)
• Using the KS_AP_KDOR_EXT_ESCHEATED_CHK Query (for use by KDOR)
• Using the KS_ACCT_REGISTER_ESCHEATMENT Report - 11-18-13
• An additional query will be provided to assist agencies in identifying SMART checks that have been escheated – an email blast will be sent out via the SMART listserve once this query is available

Email blasts will be sent out via the SMART listserve as additional information regarding escheatment becomes available.

PM 10,001 provides instructions for the preparation and use of Form DA-115, Authorized Agency Officials.   The DA-115 has been revised to include the authorized agency approvers for lodging up to 50% above established rates, lodging at conference rates, and out-of-state travel.

The DA-115 serves as an internal control document and the Department of Administration will rely on the DA-115 to determine the authorized agency approvers when performing audits of travel expense reports to verify that proper approval was granted for lodging up to 50% above established rates, lodging at conference rates, and out-of-state travel.

The new DA-115 must be completed by each agency prior to July 1, 2014 and submitted to the Audit Services Team, Office of the Chief Financial Officer.  In addition, a new DA-115 must be submitted whenever the agency head or other listed officials change.

The DA-115 should be submitted using one of the following three options:

Fax:  (785) 296-6841

Email:  ARPreaudit@da.ks.gov

Mail:  Department of Administration
         Office of the Chief Financial Officer
         Audit Services Team
         Eisenhower State Office Bldg., Suite 300
         700 S.W. Harrison Street
         Topeka, KS 66603    
   

Online Links:   

PM 10,001 – Authorized Agency Officials 
Form DA-115 - Authorized Agency Officials

                         
ME:jmm

PM 3,817 specifies prior approval requirements for (1) lodging up to 50 percent above established rates, (2) lodging at conference rates, and (3) out-of-state travel.

Informational Circular No. 14-a-007 was recently issued regarding revised PM 10,001 Authorized Agency Officials and the DA-115, Authorized Agency Officials form.  The DA-115 was revised to identify authorized agency approvers for lodging up to 50% above established rates, as well as, lodging at conference rates, and out-of-state travel. 

The two approval methods for lodging up to 50% above established rates, lodging at conference rates, and out-of-state travel include:
 

• SMART Travel Authorization -
  • Agency established SMART workflow for Travel Authorizations must include the agency head or designee and must be updated when these authorized approvers change.

• Approval Outside SMART -
  • A letter or agency travel authorization form, signed by a person authorized to approve lodging up to 50% above established rates, lodging at conference rates, and out-of-state travel; or
  • An e-mail sent from this authorized person

For approval outside SMART, approval documentation must be maintained with the travel expense report documentation for audit purposes.

The approval document (a SMART Travel Authorization, Letter, Agency Travel Authorization Form, or E-mail) must contain enough information to allow the agency to determine that the travel authorized and the travel undertaken is the same.  The minimum information to be provided in the approval document includes the traveler’s name, destination, mode of travel, purpose of travel, and dates of travel.  Complete itemization of estimated travel expenses is required.

The DA-115 serves as an internal control document and the Department of Administration will rely on the DA-115 to determine the authorized agency approvers when performing audits of travel expense reports to verify that proper approval was granted.  A new DA-115 must be submitted to the Audit Services Team, Office of the Chief Financial Officer whenever the agency head or other authorized agency officials change.

Online Links:  

PM 3,817– Agency Travel Approval - Lodging Reimbursement Rates and Out-of-State Travel 
PM 10,001 – Authorized Agency Officials 
Form DA-115- Authorized Agency Officials

                         
ME:jmm

Please see State of Kansas Travel Handbook 4100 for information on how meals are reimbursed.
As authorized by K.S.A.75-3207a, the Secretary of Administration has fixed the rates for FY 2013 at:

Meal Allowance: 

*or actual not to exceed $101 per day
 

Reduced Meal Allowance:

If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or supplied without cost by another party, the meal allowance should be reduced as shown in the table above.

Same Day Meal Allowance:

The rates as established in accordance with K.A.R. 1-16-18(c)(3) are the same as indicated in the table above.

Lodging Expense Limitations:

K.S.A. 75 3207a(f) provides that the daily lodging expense limitations established above may be exceeded by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes. Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

PF:br

Requirements to report payments where the 1099 data was not recorded in SMART:

1. The vendor/client must be in the SMART vendor table. 
2. All reportable payments must be submitted via the help desk using the EXCEL template referenced below
3. All payments reported through the Office of General Services will be processed through SMART.  Paper 1099s are generated and mailed to the vendors.  The 1099 information will be electronically submitted to the IRS. 

 There is NO option for the agency to print the forms and have the Office of General Services report to the IRS.

Below are the policy and procedures.

While most 1099 transactions are recorded in the Statewide Management, Accounting and Reporting Tool (SMART), and require no additional action by state agencies; there are some payments that occur outside of SMART or the information to be reported to the IRS is not in SMART. These transactions result in unique reporting procedures comprised of the following:

• Locally administered interest payments of $10 or more are to be reported on IRS Form 1099-INT. These payments typically represent interest paid from trust funds to clients of institutions with the Department for Aging and Disability Services and the Department of Corrections.
• State Fair premiums are to be reported on Form 1099-MISC.
• Other payments such as non-employee awards not paid directly to the recipient from SMART.
• Note that purchases of Real Property are now reported in SMART, and require the appropriate SMART preferences to record the appropriate data.

To report non-SMART payments for form 1099 purposes the agency will need to confirm the vendor is in the SMART vendor table with the appropriate 1099 type and class, and withholding is turned on.  If the vendor is not in the vendor table, the agency must add the vendor to SMART including the appropriate 1099 type and class, and turn withholding on.

Complete the attached EXCEL template PS_WTHD_TRAN_TBL_update_template for all non-SMART 1099 reportable payments.  The completed template needs to be received by the Office of General Services by January 14, 2013 to ensure the 1099s are distributed by the January 31, 2013 deadline.

The template has the columns listed below.   Do not insert or delete columns or rows.   Do not change the formatting.  Beginning with line 2 (replacing the sample data), complete one line for each payment (add lines as necessary for additional withholding types/classes). The gray columns are defaults and should not be changed.  If 499 lines are not sufficient, copy line 500 down.  When completed, attach the EXCEL spreadsheet to a Help Ticket with the heading “non-SMART 1099”.  Note if you have leading zeros precede them with an apostrophe ‘, i.e. vendor id ‘0000123456.

BUSINESS_UNIT:  5 characters must have leading zeros (your agency number)

WTHD_ENTITY:  IRS

WTHD_TYPE:  as listed in the vendor table (1099, 1099I, 1099G, 1099D)

WTHD_JUR_CD:  FED

WTHD_CLASS:  as listed in the vendor table, with leading zeros.

WTHD_RULE:   RULE0

VENDOR_SETID: SOKID

VENDOR_ID:  10 digits with leading zeros, as assigned by SMART.

VNDR_LOC:  the vendor location with the appropriate 1099 type and class, usually 001, with leading zeros

ADDRESS_SEQ_NUM: 1  

PYMNT_ID:  Blank

VNDR_REGIST_ID:  SSN or FEIN, 9 digits including leading zeros

PYMNT_DT:   date of payment, mm/dd/yyyy format        

WTHD_DECL_DATE:  Same as date of payment

WTHD_BASIS_AMT:   The taxable amount for this 1099 type and class for 2012.

DESCR100:  100 characters of your choice – no punctuation, no special characters

Additional Resources:

PowerPoint review of setting up vendors for 1099 reporting and an account code guide: http://www.da.ks.gov/ar/forum/astra/mtg2011-05-1099s.ppt 

 IRS guide to each type of 1099, including the payments for each:

http://www.irs.gov/efile/article/0,,id=98114,00.html

Page 6 and 7 of the job aid “Create a 1099 Voucher

” has Examples of payments by 1099 type and class: http://www.da.ks.gov/smart/Training/JobAid_Create_1099Voucher_Online_20100630.doc

SMART withholding codes:

http://www.da.ks.gov/smart/Training/JobAid_WithholdingCodes_20100720.ppt

Attachment: PS WTHD TRAN TBL update template XLSX 

RMK

As authorized by K.S.A.75-3203a, the Secretary of Administration has fixed the private vehicle maximum mileage reimbursement rates for FY 2013 at:

55¢ per mile for privately owned automobile

47¢ per mile for privately owned motorcycle

24¢ per mile for moving mileage rate

$1.29 per mile for privately owned airplane (based on air miles rather than highway miles)

 PF:br

The Department of Administration is changing statewide accounting practice by eliminating the concurrent processing period within SMART.  This is being implemented to address audit findings and to reduce risk by improving the current level of statewide accounting system controls.  Establishing this change as a best practice will assist the state in achieving defined monthly cutoffs, thus reducing system date and timing issues in monthly reconciliations.

We understand this will require agencies to plan ahead for processing that normally occurs during the crossover period from one month end to the beginning of the new month as well as the transition from old state and federal fiscal years to new state and federal fiscal years.

This change will be effective beginning with the month end closing for May, 2013.

This change will also affect the transition from the current fiscal year (FY 2013) to the new fiscal year (FY 2014).  The annual informational circular (13-A-006) containing the fiscal year end processing instructions will be out soon and will reflect the elimination of the concurrent period within the schedule of key fiscal year closing dates. 

For July through May in fiscal year 2014, the SMART General Ledger will close when month-end processing is completed.  Generally this will be the morning of the first business day of the new month.  Once the General Ledger is closed, the new month will be open for processing.

The concurrent period processing changes will be reflected soon in Policy Manual filing 14,002 on the Department of Administration’s website:  http://www.da.ks.gov/ar/pm/pm14002.htm.  Additional instructions will be provided at a later date for the closing of September and the transition between federal fiscal years.

 INFORMATIONAL CIRCULAR NO. 13-A-007

PM 13,001 has been updated to require that all real property, including real property (land and buildings) with a cost under $100,000, be recorded in SMART.  This requirement applies to all agencies that own real property.  Regents universities and the Department of Transportation are excluded from this requirement.

For those agencies with real property currently in SMART, an email will be sent to your agency CFO along with real property agency records for agency verification and update.  All real property (land and buildings), regardless of the cost should be included in SMART.  Included in the agency email will also be an attachment “Instructions for Updating Land and Building Records in Response to LPA Audit”. 

For all agencies with real property, additional information on entering property assets can be reviewed at the following links: Adding an Asset Using Express Add Training Guide and the Property Assets and Related Improvements Training Guide.

ME:jmm

INFORMATIONAL CIRCULAR NO. 13-A-008 (revises 13-a-006)

As a result of unforeseen technical issues and the extended delay of opening SMART to agencies on Tuesday, June 25, 2013, the following changes have been made to the previous schedule of accounting events relevant to the close of fiscal year 2013 and the opening of fiscal year 2014.

General Items

The cutoff for interface files into SMART for fiscal year 2013 will be 5:00 PM on Thursday, June 27, 2013 for Expenditures and 5:00 PM on Friday, June 28, 2013 for Deposits.

All FY 2013 transactions must be successfully edited, budget checked, matched, agency approved, dispatched, and submitted into workflow for central approval, as appropriate, by 6:00 PM on Friday, June 28, 2013. After these dates, SMART will be closed to all agency users, and the SMART clean-up process will begin on Saturday, June 29, 2013.

Accounts Payable

The final day that agencies can enter a voucher in accounts payable for FY 2013 business will be 6:00 PM on Friday, June 28, 2013. Here is additional information that will help you with accounts payable:

• In order for accounts payable transactions to complete for FY 2013, vouchers must be entered, approved, matched, and budget checked by 6:00 PM on June 28.
• Any FY 2013 accounts payable item that cannot be entered into SMART by the cutoff date must be encumbered by using a purchase order.
• Interfacing agencies must have their final INF02 for FY 2013 business submitted by 5:00 PM on Thursday, June 27.

Expense Reports

Expense Reports chargeable to FY 2013 must be processed in SMART by Friday, June 28, 2013. For any travel that is chargeable to FY 2013 that cannot be processed by the deadline, the agency must process a Travel Authorization.

Purchasing

To encumber monies for FY 2013, requisitions must be sourced to POs and the PO must be approved, budget checked and dispatched by end of business on Friday, June 28, 2013.

The last P-Card voucher build process for FY 2013 will run the morning of Friday, June 28, 2013. The resulting P-Card vouchers must be approved and successfully budget checked prior to 3:00 PM on Friday, June 28, 2013 so they are eligible to process in pay cycle.

Asset Management

All FY 13 asset transactions must be entered by 6:00 PM on Friday, June 28, 2013. This includes additions, adjustments, transfers, and retirements, as well as updating costs for CIP assets. The Transaction Date should be the effective date of the transaction. For new assets being entered in SMART, the Transaction Date will be the In Service Date.

For agencies utilizing integration, all outstanding Interface ID’s for FY 2013 must be processed by 6:00 PM on Friday, June 28, 2013. If an asset is acquired by your agency at the end of the fiscal year and the voucher will not be posted by Wednesday, June 26, 2013, please enter the asset(s) manually via Express Add.

Project Costing

All Federal funds must be in a positive cash position by year-end close. For agencies with Federal funds tied to Project Costing and Customer Contracts, this means that FY 2013 billing worksheets should be approved or written-off and any related deposits completed by 6:00 PM on Friday, June 28, 2013.

Accounts Receivable

Fiscal year 2013 deposits must be entered as follows:

• Friday, June 28, 2013 online entry into SMART will be open to agencies.
• Friday, June 28, 2013 at 6:00 PM is the cutoff for online entry of FY13 deposits.
• SMART AR deposit jobs will run according to the regular hourly schedule.
• Friday, June 28, 2013, agencies may continue to upload and submit FY 2013 deposits via INF43 and INF44 until 5:00 PM. Only deposits approved and released by the State Treasurer’s Office by 3:00 PM on Friday, June 28 will be considered FY13 GL business. 
• Any FY13 deposits processed after 3:00 PM Friday, June 28, on Saturday, June 29 and on Sunday, June 30 will be considered deposits-in-transit with an FY13 AR date and an FY14 GL date. 

Deposits in transit are defined as:

• Agency receipts after 3:00 PM Friday, June 28, 2013.
• Agency receipts on Saturday, June 29, 2013.
• Agency receipts on Sunday, June 30, 2013.

Since SMART will be open to agencies on Friday, June 28, 2013, the Temporary Deposit Form will not be used on that day.

Interfunds

• The accounting dates on both the voucher and deposit must fall within the same fiscal year.
• Friday, June 28, 2013 6:00 PM: both sides of the interfund must be approved.  All remaining FY2013 interfund deposits and interfund vouchers will be deleted by the SMART team.

GL Journals

• In order to affect fiscal year 2013, ALL GL Journals must be successfully edited, budget checked, agency approved, and submitted into workflow for central approval by 6:00 PM on Friday, June 28, 2013.
• Interfacing agencies must have their final INF06 for FY 2013 business submitted by 5:00 PM on Thursday, June 27, 2013.
• GL Spreadsheet Journals can be uploaded manually until 3:00 PM on Friday, June 28, 2013. The journals must be approved and submitted for central approval by 6:00 PM.

Allocations

Agencies using Allocations must run their last FY 2013 allocation process on Friday, June 28, 2013. All resulting GL Journals must be posted by 5:00 PM that day.

Day by Day Summary – June 25, 2013 through June 29, 2013

DATE:	June 20, 2011
SUBJECT:	FY 2012 Subsistence Rates
EFFECTIVE DATE:	July 1, 2011
CONTACT:	Shirley Gilchrist Gary Bond Ginnie Schirmer Lance Gagelman	(785) 296-2882 (785) 296-7217 (785) 296-7021 (785) 296-2255	(shirley.gilchrist@da.ks.gov) (Gary.Bond@da.ks.gov) (ginnie.schirmer@da.ks.gov) (lance.gagelman@da.ks.gov)
APPROVAL:
SUMMARY:	FY 2012 Meal Allowance and Lodging Rates

Please see State of Kansas Travel Handbook 4100 for information on how meals are reimbursed.
As authorized by K.S.A.75-3207a, the Secretary of Administration has fixed the rates for FY 2012 at:

Meal Allowance: 

*or actual not to exceed $97 per day

Reduced Meal Allowance:

If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or supplied without cost by another party, the meal allowance should be reduced as shown in the table above.

Same Day Meal Allowance:

The rates as established in accordance with K.A.R. 1-16-18(c)(3) are the same as indicated in the table above.

Lodging Expense Limitations:

K.S.A. 75 3207a(f) provides that the daily lodging expense limitations established above may be exceeded by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes. Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

KEO:sg

Summary of changes:

There are three changes to procedures for calendar year 2011 Form 1099 reporting for non-SMART payments submitted to the Office of General Services (formerly the Division of Accounts and Reports) for printing, mailing, and filing with the IRS:

1. The vendor/client must be in the SMART vendor table. 
2. All reportable payments must be submitted via the help desk using the EXCEL template referenced below
3. All payments reported through the Office of General Services will be processed through SMART.  Paper 1099s are generated and mailed to the vendors.  The 1099 information will be electronically submitted to the IRS. 

There is NO option for the agency to print the forms and have General Services report to the IRS.

Below are the revised policy and procedures.

While most 1099 transactions are recorded in the Statewide Management, Accounting and Reporting Tool (SMART), and require no additional action by state agencies; there are some payments that occur outside of SMART or the information to be reported to the IRS is not in SMART. These transactions result in unique reporting procedures comprised of the following:

• Locally administered interest payments of $10 or more are to be reported on IRS Form 1099-INT. These payments typically represent interest paid from trust funds to clients of institutions with the Department of Social and Rehabilitation Services and the Department of Corrections.
• State Fair premiums are to be reported on Form 1099-MISC.
• Other payments such as non-employee awards not paid directly to the recipient from SMART.
• Note that purchases of Real Property are now reported in SMART, and require the appropriate SMART preferences to record the appropriate data.

To report non-SMART payments for form 1099 purposes the agency will need to confirm the vendor is in the SMART vendor table with the appropriate 1099 type and class, and withholding is turned on.  If the vendor is not in the vendor table, the agency must add the vendor to SMART including the appropriate 1099 type and class, and turn withholding on.

Complete the attached EXCEL template PS_WTHD_TRAN_TBL_update_template for all non-SMART 1099 reportable payments.  The completed template needs to be received by the Office of General Services by January 13, 2012 to ensure the 1099s are distributed by the January 31, 2012 deadline.

The template has the columns listed below.   Do not insert or delete columns or rows. Do not change the formatting.  Beginning with line 2 (replacing the sample data), complete one line for each payment (add lines as necessary for additional withholding types/classes). The gray columns are defaults and should not be changed.  If 499 lines are not sufficient, copy line 500 down.  When completed, attach the EXCEL spreadsheet to a Help Ticket with the heading “non-SMART 1099”

BUSINESS_UNIT:  5 characters must have leading zeros (your agency number)

WTHD_ENTITY:  IRS

WTHD_TYPE:  as listed in the vendor table (1099, 1099I, 1099G, 1099D)

WTHD_JUR_CD:  FED

WTHD_CLASS:  as listed in the vendor table

WTHD_RULE:   RULE0

VENDOR_SETID: SOKID

VENDOR_ID:  10 digits with leading zeros, as assigned by SMART.

VNDR_LOC:  the vendor location with the appropriate 1099 type and class, usually 001.

ADDRESS_SEQ_NUM: 1  

PYMNT_ID:  Blank

VNDR_REGIST_ID:  SSN or FEIN, 9 digits including leading zeros

PYMNT_DT:   date of payment, mm/dd/yyyy format        

WTHD_DECL_DATE:  Same as date of payment

WTHD_BASIS_AMT:   The taxable amount for this 1099 type and class for 2012.

DESCR100:  100 characters of your choice – no punctuation, no special characters

Additional Resources:

PowerPoint review of setting up vendors for 1099 reporting and an account code guide: http://www.da.ks.gov/ar/forum/astra/mtg2011-05-1099s.ppt 

 IRS guide to each type of 1099, including the payments for each:
http://www.irs.gov/efile/article/0,,id=98114,00.html

Page 6 and 7 of the job aid “Create a 1099 Voucher” has Examples of payments by 1099 type and class:  http://www.da.ks.gov/smart/Training/JobAid_Create_1099Voucher_Online_20100630.doc

SMART withholding codes:  http://www.da.ks.gov/smart/Training/JobAid_WithholdingCodes_20100720.ppt

Attachment: IC 12-a-003 - PS WTHD TRAN TBL update template

AW:rmk

We have mailed IRS forms 1099-MISC, 1099-INT, 1099-G, 1099-S, and 1099-DIV for SMART based transactions to vendors (including those transactions submitted in accordance with Informational Circular No. 12-A-003).  If you receive a call from a vendor regarding these forms and you are unable to provide the information the vendor needs, please refer them to the following secure internet site to record their question:

 https://da.ks.gov/ar/1099/

The site will allow the vendor to log their identifying information and question regarding the 1099 received.  We will then respond to those inquiries in the order received, usually the next business day.

Other state agencies also issue various 1099’s.  Contacts for those other 1099’s may be found at: http://www.da.ks.gov/ar/genacct/1099info.htm.

 AW:rk

As authorized under the Voluntary Retirement Incentive Program (VRIP), employees retiring under the program were able to choose either a one-time lump sum payment of $6,500 or a Health Insurance Benefit equal to the employer’s share of the active State employee rates for the coverage and plan in which the employee was enrolled on August 1, 2011.

The United States Department of Health & Human Services’ Division of Cost Allocation (DCA) is currently evaluating the VRIP program for indirect cost allocation eligibility. If approved, agencies with qualifying indirect cost allocation plans will be able to charge some of the program costs to their federal grant awards.

For the Health Insurance Benefit, agencies are to be billed via a SMART interfund on a monthly basis for amounts due to the Division of Health Care Finance, Department of Health and Environment. Until a determination is received from DCA, agencies should not charge federal funds for the costs of the Health Insurance Benefit amounts. Agencies should use SMART account code 559600 (Voluntary Retirement Incentive GHI coverage) to record the expense side of the interfund.

The first interfund billings were entered in SMART in January, 2012. Unfortunately we did not have this Informational Circular distributed prior to the initial billing as we intended. Any interfunds that processed using an expense account code other than 559600, should be corrected to this code. We regret any inconvenience this may have caused.

If you need assistance identifying federal funds that have been charged for expenditures, please contact Janette Martin.

Any questions regarding this agency correspondence should be directed to:

Guidance on use of federal funds and correcting entries    

• Office of Management Analysis and Standards
• Dept of Administration
• Janette Martin
• (785) 296-2708
• Janette.Martin@da.ks.gov

Interfund billings for the Health Insurance Benefit    

• Division of Health Care Finance
• Department of Health and Environment
• Mike Michael
• MMichael@kdheks.gov
• (785) 296-0221

Effective July 1, 2010, the following account code was established in SMART:

526610            Job Related Training and Conference Registration

This expenditure account code was created to capture educational or job related training type expenditures together in this one account code.  This was a change in definition and shifted the coding use for conference registrations and training from the “travel” account Code series 525x90 into account code 526610. 

The account code default values in the SMART Travel and Expense Module for conference meeting registrations as well as training costs have been updated to reflect this account code change.

Use of account code 526610 is effective immediately as follows:

• FY 2012 – Use of account code 526610 is recommended for the remainder of FY 2012 but not required.  Journal Expense Report adjustments are not necessary for training and conference registration payments already made during FY 2012 using the 525x90 account code series rather than the 526610 account code.

• FY 2013 - Use of account code 526610 will be required effective July 1, 2012.

This account count is reflected in the Uniform Expenditure Account Classification filing (PM No. 7,002) on the Division of Accounts and Reports web site: http://www.da.ks.gov/ar/pm/Pm07002.pdf.

 ME:jmm

For central reporting purposes, the following new expenditure account code has been established to record health insurance premiums for graduate teaching assistants not paid through Sharp.  This code will be effective April 23, 2012:   

519250              Graduate Assistant Group Health Insurance

This addition will be reflected in the Uniform Expenditure Account Classification filing (PM No.7,002) at http://www.da.ks.gov/ar/pm/Pm07002.pdf. 

ME:gb

INFORMATIONAL CIRCULAR NO. 11-A-001 Supersedes:10-A-001

DATE:	June 18, 2010
SUBJECT:	2011 Private Vehicle Mileage
EFFECTIVE DATE:	July 1 ,2010
APPROVAL:
SUMMARY:	FY 2011 Privately Owned Vehicle Mileage Reimbursement Rates

CONTACT: 

As authorized by K.S.A.75-3203a, the Secretary of Administration has fixed the private vehicle maximum mileage reimbursement rates for FY 2011 at:

34¢ per mile for privately owned motorcycle

50¢ per mile for privately owned automobile

$1.13 per mile for privately owned airplane (based on air miles rather than highway miles)

KEO:rk

DATE:	June 18, 2010
SUBJECT:	FY 2011 Subsistence Rates
EFFECTIVE DATE:	July 1, 2010
A & R CONTACT:	Shirley Gilchrist Ginnie Schirmer Lance Gagelman	(785) 296-2882 (785) 296-7021 (785) 296-2255	(shirley.gilchrist@da.ks.gov) (ginnie.schirmer@da.ks.gov) (lance.gagelman@da.ks.gov)
APPROVAL:
SUMMARY:	FY 2011 Meal Allowance and Lodging Rates

Please see Informational Circular 10-a-016 for information on the change in how meals are reimbursed.

As authorized by K.S.A.75-3207a, the Secretary of Administration has fixed the rates for FY 2011 at:

Meal Allowance:

*or actual not to exceed $91 per day
 

Reduced Meal Allowance:

If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or supplied without cost by another party, the meal allowance should be reduced as shown in the table above.
 

Same Day Meal Allowance:

The rates as established in accordance with K.A.R. 1-16-18(c)(3) are the same as indicated in the table above.

Lodging Expense Limitations:

K.S.A. 75 3207a(f) provides that the daily lodging expense limitations established above may be exceeded by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes. Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

KEO:rk

The updated DA-184 Authorization for Direct Deposit of Employee Pay and/or Employee Travel is now available at http://www.da.ks.gov/ar/pm/forms/default.htm.

Agencies are encouraged to utilize the new combined form and to develop the appropriate business process flow within their agency to correctly route the information provided by an employee on the DA-184 form to all necessary parties for data entry and agency record-keeping. Direct deposit of employee payroll will be entered in the Statewide Human Resource and Payroll system and direct deposit of employee travel and expense is entered into the Statewide Management, Accounting, and Reporting Tool Travel and Expense module.

Please note the following:

• An employee may only select one account for SMART (travel and expense) and 100% of all travel and expense reimbursements will be deposited to that account.

• An employee may select up to a maximum of nine accounts for SHARP (employee payroll) and identify the account priority and the percentage or amount of net pay that is distributed to each account.

• The “International ACH Bank” checkbox is intended to be selected if the entire amount of the direct deposit to a specific account may result in the transfer of funds to a financial agency outside the U.S. The functionality to support the International ACH requirements is not yet in place so agencies should refrain from using this checkbox at this time. Additional instructions will be released when the necessary programming changes are made to implement International ACH payments.

KEO:nr

DATE:	October 14, 2010
SUBJECT:	IRS 1099 Reporting
EFFECTIVE DATE:	November 15, 2010.
CONTACT:	Randy Kennedy	(785) 296-4788	Randy.Kennedy@da.ks.gov)
APPROVAL:
SUMMARY:	IRS 1099 Miscellaneous Reporting – revocation of exceptions

The Department of Administration is responsible for issuing IRS 1099 forms for all agencies so that we can report as a single entity. While a single payment may not exceed the reporting threshold, we are required to aggregate all payments and report if the total payments exceed the IRS reporting threshold. In the past a limited number of exceptions have been granted to not collect recipient data for de minimis payments.

We have reviewed this exception process with our agency attorney. We have been advised there should not be any exception from collecting 1099 data regardless of payment amount. Any single payment when added to all other agency payments could result in the vendor’s payments exceeding the reporting threshold, no matter how small the individual payment. Therefore, effective November 15, 2010, all exceptions from collecting and reporting 1099 data are revoked.

KEO:rk

DATE:	December 16, 2010
SUBJECT:	Procedures for filing 2010 Form 1099 Information Returns
EFFECTIVE DATE:	Immediately
CONTACT:	Randy Kennedy	(785) 296-4788	Randy.Kennedy@da.ks.gov)
APPROVAL:
SUMMARY:	Procedures for Filing Calendar Year 2010 Form 1099 Information Returns

For calendar year 2010 1099 reporting data from STARS and SMART will be required.

1099 reporting for the State of Kansas is comprised of two processes, the first being the issuance of the 1099 to the payee with the second being the electronic filing of the 1099 informational returns with the Internal Revenue Service (IRS). While most 1099 transactions are recorded in the Statewide Management and Recording Tool (SMART), and require no additional action by state agencies; there are some payments that occur outside of SMART or STARS, or the information to be reported to the IRS is not in SMART or STARS. These transactions result in unique reporting procedures, and are comprised of the following:

• Locally administered interest payments exceeding $10 are to be reported on IRS Form 1099-INT. These payments typically represent interest paid from trust funds to clients of institutions with the Department of Social and Rehabilitation Services and the Department of Corrections.
• Purchases of real property, exceeding $600 are required to be reported on IRS Form 1099-S (Do not include rental or construction costs). Additional information required by this form includes a legal description or address of the property and the closing date of the purchase transaction.   If the transaction is post SMART, then SMART should be utilized to create these forms by properly completing the 1099 withholding on the payment voucher.   Whereas, STARS transactions (Jan. 1, 2010 – June 30, 2010) continue to require manual processing.
• State Fair premiums are to be reported on Form 1099-MISC.

Agencies which have the transactions discussed above are responsible for the preparation and delivery of the appropriate 1099 form to the payee prior to January 31, 2011. To meet this reporting requirement, agencies can prepare and mail their own 1099s, or if the Division of Accounts and Reports has provided this service in prior years for the agency, the agency can request the Division of Accounts and Reports to perform this service again this year. The Division of Accounts and Reports has provided this service in past years to the following agencies: Kansas Commission on Veteran’s Affairs (Veterans’ Home or Soldiers’ Home), Juvenile Justice Authority, SRS, Parsons State Hospital and Training Center, and Larned State Hospital. If the agencies listed wish for Accounts and Reports to provide this service for calendar year 2010 1099s, please contact Randy Kennedy to coordinate.

For agencies requesting Accounts and Reports to produce and mail the 1099s, agencies will need to prepare a text file, or Excel file, or DA-43. The file or listing needs to be received by the Division of Accounts and Reports by January 19, 2011 to ensure the 1099s are distributed by the January 31, 2011 deadline. Please indicate on the email or cover letter submitted with the electronic file or listing that the Division of Accounts and Reports produces the 1099s.

For those agencies preparing and mailing their own 1099s to payees, the procedures for handling 1099 information returns for calendar year 2010 are as follows:

• Prepare and deliver the appropriate 1099 form to the payees prior to January 31, 2011. Do not mail the 1099 forms directly to the IRS or to the Kansas Department of Revenue; the Division of Accounts and Reports will provide an electronic file containing the 1099 information to the federal and state taxing authorities. The payer's FEIN to use for the State of Kansas is 48-1124839.
• For STARS transactions (Jan. 1, 2010 – June 30, 2010), agencies reporting applicable purchases of real property may submit the IRS and /or the State of Kansas copies of the 1099-S forms to the Division of Accounts and Reports (at the address provided below), and Accounts and Reports will then submit this information to the taxing authorities.   SMART transactions should be recorded in SMART.
• If any agency finds it necessary to issue a corrected information return, the payee should be provided a copy as soon as possible. The IRS copy of the corrected form (marked "corrected") should be forwarded promptly to the Division of Accounts and Reports (at the address provided below.

Since the State of Kansas is classified as a single payer entity by the IRS (all payments by state agencies are reported under one FEIN) and federal law and regulations require the filing of 1099 information returns by magnetic media or electronically, it is the responsibility of the Division of Accounts and Reports to transmit all 2010 calendar year 1099 informational returns to the IRS electronically. To aid the Division of Accounts and Reports with the electronic filing requirements, agencies reporting the expenditures discussed above, and with fewer than 20 records, may use the DA-43 form (http://www.da.ks.gov/ar/forms/ ), or may submit a text file, or may submit an Excel file. If you have 20 or more records, please submit the records in a text file or in an Excel file following the format shown in the attached NON-STARS 1099 Record Layout form. All electronic files or listings for ‘1099 information reporting only’ need to be received by February 8, 2011. Please email all electronic files to Randy.Kennedy@da.ks.gov, and mail any paper listings to:

Division of Accounts and Reports
Central Responsibilities Team
900 SW Jackson, Room 351-S, LSOB
Topeka, Kansas 66612-1248

Attention: Randy Kennedy

Please note that the February 8, 2011 deadline is only available to those agencies that prepare and mail their own 1099s, and the Division of Accounts and Reports just files the informational return with the IRS. If the Division of Accounts and Reports produces and sends the 1099s for the agency, the January 17, 2011 deadline is applicable.

When submitting data via a text or Excel file, please be sure to follow the formatting instructions, which include:

No hyphens or dashes in the Vendor Number field, entry is the nine digit FEIN or SSN,

Record and capitalize the first name, middle initial, last name in the Name field (example, JOHN C SMITH). Do not include forms of address (Mr., Ms., etc), or punctuation (i.e. periods or commas), or any other special characters.

No hyphens or dashes in the Zip Code field, just report the five (left justify) or nine digit 
zip code, (i.e. 66612-1248 would be reported as 666121248).

No dollar signs or decimals, in the amount field, just report the amount (i.e. 
$3,312.48 would be reported as 000000331248).

KEO:rk

Attachment: 1099 FORMATS - 1099 RECORD LAYOUT xls

DATE:	December 27, 2010
SUBJECT:	Procedures for correcting 2010 1099 Reporting
EFFECTIVE DATE:	Immediately
CONTACT:	Randy Kennedy	(785) 296-4788	Randy.Kennedy@da.ks.gov)
APPROVAL:
SUMMARY:	Procedures for correcting IRS 1099 reporting for calendar year 2010

In STARS agencies submitted journal vouchers to correct or charge reportable transactions to the FEIN of the entity that is subject to IRS 1099 reporting for Imprest Funds, Petty Cash Funds, and other payments where the payee was not recorded appropriately or at all in the accounting system.

In SMART the agency can use the existing SMART Imprest Fund and Petty Cash bank functionality to record these entries.  P-Card 1099 reporting for calendar year 2010 is performed centrally based on information received from UMB – no action is taken by the agency unless they are seeking to recognize 1099 reporting for items such as reportable awards. 

If your agency has processed transactions where the proper 1099 reporting information was not recorded in SMART or STARS, please submit the information on the EXCEL form available at the link below.  No reversal entries in SMART are necessary, unless the payment was marked reportable to the wrong entity or individual.  For example, if 1099 reportable awards were purchased from an Imprest Fund (not using SMART imprest fund vouchers) there would only be one correction line per award.

SMART 1099 Correction Form

All non-numeric fields must be completed in CAPS.  The TIN (taxpayer identification number), Vendor ID, and Zip Code must be completed as text with all leading zeros, no hyphens, no dashes, no commas, no special characters.  The vendor MUST be set up in SMART. All fields must be completed.  The 1099 types and classes are listed on the 1099 TAB.

The completed form must be sent securely, therefore send an e-mail to Randy.Kennedy@da.ks.gov by January 10, 2011, indicating you have a 1099 correction to submit.  He will send you a secure message via Tumbleweed.  Reply in Tumbleweed attaching the completed EXCEL file.

KEO:rk

Attachment: SMART 1099 Correction Form xls

DATE:	April 21, 2011
SUBJECT:	Addition of New Expenditure Account Codes
EFFECTIVE DATE:	July 1, 2011
CONTACT:	Martin Eckhardt Gail Barnhart	(785) 296-2661 (785) 296-3404	(Martin.Eckhardt@da.ks.gov) (Gail.Barnhart@da.ks.gov)
APPROVAL:
SUMMARY:	Addition of New Account Codes 527201, 527202, 527970, 527980

For central reporting purposes, the following new expenditure account codes have been established in SMART effective July 1, 2011:

• 527201              Assigned Counsel-Contract Lawyers
• 527202              Assigned Counsel-Non-Contract Lawyers

Also effective July 1, 2011, the following new expenditure account codes have been established in SMART to segregate Expert Witness Fees and Court Reporting Fees from expenditure account code 527990 “Other Professional Fees”: 

• 527970              Expert Witness Fees
• 527980              Court Reporting Fees

 KEO:ME:gb

DATE:	June 29, 2009
SUBJECT:	2010 Private Vehicle Mileage
EFFECTIVE DATE:	July 1 ,2009
CONTACT:	Shirley Gilchrist Ginnie Schirmer Joy Duncan Lance Gagelman	(785) 296-2882 (785) 296-7021 (785) 296-7011 (785) 296-2255	(shirley.gilchrist@da.ks.gov) (ginnie.schirmer@da.ks.gov) (joy.duncan@da.ks.gov) (Lance.Gagelman@da.ks.gov)
APPROVAL:
SUMMARY:	FY 2010 Privately Owned Vehicle Mileage Reimbursement Rates

As authorized by K.S.A.75-3203a, the Secretary of Administration has fixed the private vehicle maximum* mileage reimbursement rates for FY 2010 at:

32¢ per mile for privately owned motorcycle

55¢ per mile for privately owned automobile

$1.10 per mile for privately owned airplane (based on air miles rather than highway miles)

*If a mode of transportation is available and is less costly than transportation by privately owned conveyance, mileage payments for use of a privately owned conveyance shall be limited to the cost of that other mode of transportation. (K.A.R. 1-18-1a (d)(1)).

KEO:rk

DATE:	June 29, 2009
SUBJECT:	FY 2010 Subsistence Rates
EFFECTIVE DATE:	July 1, 2009
A & R CONTACT:	Shirley Gilchrist Ginnie Schirmer Joy Duncan Lance Gagelman	(785) 296-2882 (785) 296-7021 (785) 296-7011 (785) 296-2255	(shirley.gilchrist@da.ks.gov) (ginnie.schirmer@da.ks.gov) (joy.duncan@da.ks.gov) (lance.gagelman@da.ks.gov)
APPROVAL:
SUMMARY:	FY 2010 Meal Allowance and Lodging Rates

As authorized by K.S.A.75-3207a, the Secretary of Administration has fixed the rates for FY 2010 at:

Meal Allowance:

Reduced Meal Allowance:

If the cost of meals is included within the cost of registration fees or other fees and charges paid by the agency or supplied without cost by another party, the meal allowance should be reduced as follows:

Same Day Meal Allowance:

The rates as established in accordance with K.A.R. 1-16-18(c)(3) are the same as indicated in the table above for reduced meal allowance.

Lodging Expense Limitations:

K.S.A. 75 3207a(f) provides that the daily lodging expense limitations established above may be exceeded by the lesser of either: (1) an additional 50% of the applicable lodging expense limitation, or (2) the actual lodging expense incurred.

These lodging limits continue to be applied to the lodging rate before taxes. Thus, the amount reimbursed or paid for lodging expenses may exceed the established lodging limitation by as much as the amount of associated taxes.

KEO:rk

DATE:	July 10, 2009
SUBJECT:	Revenue and Expenditure Sub-object Codes
EFFECTIVE DATE:	July 1, 2009
A & R CONTACT:	Gail Barnhart	(785) 296-3404	(gail.barnhart@da.ks.gov)
APPROVAL:
SUMMARY:	Change to Expenditure Sub-object Code 2230, and Deleting Expenditure Sub-object Code 2290, 3998, 5540 and Revenue Sub-object Code 1015, 1217, 1552, 2128

Effective July 1, 2009 the description of expenditure sub-object 2230 is being changed to include binding as follows:

• 2230 Other Vendor Printing, Binding, Duplicating, Blue-Printing and Reproducing – non-capital

In addition, several sub-object codes have been deemed no longer useful. Effective July 1, 2009, the following expenditure sub-object codes are being closed:

• 2290 Other Vendor Printing and Binding – non-capital
• 3998 Labor Charges Associated with the Purchase of Parts – BPC Purchase
• 5540 Senior Pharmacy Assistance Program (Agency 039 only)

Effective July 1, 2009, the following revenue sub-object codes are being closed:

• 1015 Motor Vehicle – State General Fund
• 1217 Metropolitan Culture District Retailers Sales Tax (Fund 7682)
• 1552 Severance Tax on Salt 
• 2128 Non-occupational Licenses, Permits and Registrations – Dark Goose Fees (Agency 710 only)

These changes will be reflected in the Uniform Receipt Classification Revenue Sub-object Codes filing (PPM No. 6,002) and the Uniform Expenditure Classification Expenditure Sub-object Codes filing (PPM No. 7,002) on the Division of Accounts and Reports web site: http://www.da.ks.gov/ar/ppm/.

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DATE:	July 30, 2009
SUBJECT:	STARS, STARS ADHOC REPORTING SYSTEM, ANDSOKI3+HISTORICAL DATA AT SMART GO-LIVE
EFFECTIVE DATE:	July 1, 2009
CONTACT:	Dan Escher Randy Kennedy	(785) 296-6943 (785) 296-2125	(dan.escher@da.ks.gov) (randy.kennedy@da.ks.gov)
APPROVAL:
SUMMARY:	Instructions for Accessing Historical Data of Retired Central Systems

Upon the implementation of the Statewide Management Accounting and Reporting Tool (SMART) on July 1, 2010, the Statewide Accounting and Reporting System (STARS), the STARS Ad-Hoc Reporting System (ADHOC), and the State of Kansas Interactive Internet Interfunds ( SOKI3+) will be retired from service.

These systems and/or system data will be available for a period of time after retirement to satisfy agency reporting needs immediately after the close of FY 2010. The remaining sections describe the access that will be provided after the retirement of these systems. Questions regarding STARS or ADHOC should be directed to Dan Escher. Questions regardingSOKI3+ should be directed to Randy Kennedy.

STARS

STARS DAFR Reports. Daily and monthly reports will be generated as normal until the close of FY 2010. Please ensure you are generating the reports you require for FY 2010 recordkeeping and other business purposes. No additional reports will be generated after the close of FY 2010. Agencies are encouraged to take advantage of the online reporting option which can be used to create online reports to download for archive purposes. Please see 'Informational Circular 08-A-004' for more details.

STARS Online Inquiry. The STARS on-line menu system will remain accessible until December 31, 2010 for inquiry purposes only. Users will have no update capability and the data entry menu will be disabled.

STARS Daily (DA) and Monthly (MO) Transaction Datasets. These datasets and any other datasets received by agencies will be created as scheduled through the close of FY 2010. Agencies receiving these datasets are encouraged to retain them as required for internal reporting and archive purposes.

STARS Transactional Data. Agencies may request STARS transactional data on a fiscal year basis for years FY 2001-2010. Each year will be placed in the agency online report folder for downloading. Agencies can access their online report folder as instructed in 'Informational Circular 08-A-004'.

Agencies are strongly encouraged to only request transactional data for specific purposes and not for general archiving. The Department of Administration will archive this historical data for an indefinite number of years with a decision on final disposition and availability to be made at a future date.

Agencies requesting historical data will be provided a data layout and dataset name to retrieve the data from their online report folder at the time the request is made.

STARS AD-HOC REPORTING SYSTEM

ADHOC and all of its inquiry functions will remain accessible until December 31, 2010. As a reminder, no FY 2011 data created in SMART will be available in ADHOC.

SOKI3+

The SOKI3+ system will be available on an inquiry-only basis after the close of FY 2010 until December 31, 2010. After this date, requests for SOKI3+ historical data or documents will be made to the Division of Accounts and Reports.

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DATE:	October 16, 2009
SUBJECT:	Revenue and Expenditure Sub-object Codes
EFFECTIVE DATE:	October 16, 2009
CONTACT:	Gail Barnhart	(785) 296-3404	(Gail.Barnhart@da.ks.gov)
APPROVAL:
SUMMARY:	Change to Revenue Sub-object Code 2400 and 2401; Closing Expenditure Sub-object 6140

Per Lottery’s request, effective October 16, 2009 the description of revenue sub-object 2400 and 2401 is being changed to as follows:

• 2400 Lottery Revenues – Revenue Level 2: Proceeds received from lottery and expanded lottery act revenues.
• 2401 Lottery and Expanded Lottery Act Net Accounts Receivable

In addition, expenditure sub-object code 6140 has been deemed no longer useful. Effective October 16, 2009, the following expenditure sub-object code will be closed:

• 6140 Interest and Service Charges on Certificates of Participation

The changes will be reflected in the Uniform Receipt Classification Revenue Sub-object Codes filing (PPM No. 6,002) and the Uniform Expenditure Classification Expenditure Sub-object Codes filing (PPM No. 7,002) on the Division of Accounts and Reports web site http://www.da.ks.gov/ar/ppm/.

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DATE:	November 16, 2009
SUBJECT:	Revenue and Expenditure Sub-object Codes
EFFECTIVE DATE:	July 1, 2010
CONTACT:	Gail Barnhart	(785) 296-3404	(Gail.Barnhart@da.ks.gov)
APPROVAL:
SUMMARY:	Close Expenditure Sub-object Code 5570 and 5571; Establish New Revenue Sub-object Code 1124 and 1125

Per a request from the Department of Revenue, effective July 1, 2010 the following expenditure sub-object codes will be closed:

• 5570 Homestead Property Tax Relief Payments (Agency 565 only)
• 5571 Oil Lease Operator Property Tax Payments (Agency 565 only)

Effective July 1, 2010 two new revenue sub-object codes are being established as follows:

• 1124 Homestead Property Tax Relief Refunds
• 1125 Oil Lease Operator Property Tax Refunds

The changes will be reflected in the Uniform Receipt Classification Revenue Sub-object Codes filing (PPM No. 6,002) and the Uniform Expenditure Classification Expenditure Sub-object Codes filing (PPM No. 7,002) on the Division of Accounts and Reports web site http: http://www.da.ks.gov/ar/ppm/.

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DATE:	December 14, 2009
SUBJECT:	Procedures for filing 2009 Form 1099 Information Returns
EFFECTIVE DATE:	Immediately
CONTACT:	Melissa Wesley	(785) 296-7291	(Melissa.Wesley@da.ks.gov)
APPROVAL:
SUMMARY:	Procedures for Filing 2009 Form 1099 Information Returns

1099 reporting for the State of Kansas is comprised of two processes, the first being the issuance of the 1099 to the payee with the second being the electronic filing of the 1099 informational returns with the Internal Revenue Service (IRS). While most 1099 transactions are recorded in the Statewide Accounting and Reporting System (STARS), and require no additional action by state agencies; there are some payments that occur outside of STARS or the information to be reported to the IRS is not in STARS. These transactions result in unique reporting procedures, and are comprised of the following:

1. Locally administered interest payments exceeding $10 are to be reported on IRS Form 1099-INT. These payments typically represent interest paid from trust funds to clients of institutions with the Department of Social and Rehabilitation Services and the Department of Corrections.
2. Purchases of real property exceeding $600 are required to be reported on IRS Form 1099-S (Do not include rental or construction costs). Additional information required by this form includes a description or address of the property and the closing date of the purchase transaction.
3. State Fair premiums are to be reported on Form 1099-MISC.

Agencies which have the transactions discussed above are responsible for the preparation and delivery of the appropriate 1099 form to the payee prior to January 31, 2010. To meet this reporting requirement, agencies can prepare and mail their own 1099s, or if the Division of Accounts and Reports has provided this service in prior years for the agency, the agency can request the Division of Accounts and Reports to perform this service again this year. The Division of Accounts and Reports has provided this service in past years to the following agencies: Kansas Veteran’s Home, Juvenile Justice Authority, SRS, Parsons State Hospital and Training Center, and Larned State Hospital. If the agencies listed wish for Accounts and Reports to provide this service for 2009 1099s, please contact Melissa Wesley to coordinate.

For agencies requesting Accounts and Reports to produce and mail the 1099s, agencies will need to prepare a text file, or Excel file, or DA-43. The file or listing needs to be received by the Division of Accounts and Reports by January 18, 2010 to ensure the 1099s are distributed by the January 31, 2010 deadline. Please indicate on the email or cover letter submitted with the electronic file or listing that the Division of Accounts and Reports produces the 1099s.

For those agencies preparing and mailing their own 1099s to payees, the procedures for handling 1099 information returns for calendar year 2009 are as follows:

1. Prepare and delivery of the appropriate 1099 form to the payees prior to January 31, 2010. Do not mail the 1099 forms directly to the IRS or to the Kansas Department of Revenue; the Division of Accounts and Reports will provide an electronic file containing the 1099 information to the federal and state taxing authorities. The payer's FEIN to use for the State of Kansas is 48-1124839.
2. Agencies reporting applicable purchases of real property may submit the IRS and /or the State of Kansas copies of the 1099-S forms to the Division of Accounts and Reports (at the address provided below), and Accounts and Reports will then submit this information to the taxing authorities.
3. If any agency finds it necessary to issue a corrected information return, the payee should be provided a copy as soon as possible. The IRS copy of the corrected form (marked "corrected") should be forwarded promptly to the Central Accounting Services Section of the Division of Accounts and Reports.

Since the State of Kansas is classified as a single payer entity by the IRS (all payments by state agencies are reported under one FEIN) and federal law and regulations require the filing of 1099 information returns by magnetic media or electronically, it is the responsibility of the Division of Accounts and Reports to transmit all 2009 calendar year 1099 informational returns to the IRS electronically. To aid the Division of Accounts and Reports with the electronic filing requirements, agencies reporting the expenditures discussed above, and with fewer than 20 records, may use the DA-43 form (http://www.da.ks.gov/ar/forms/ ), or may submit a text file, or may submit an Excel file. If you have 20 or more records, please submit the records in a text file or in an Excel file following the format shown in the attached NON-STARS 1099 Record Layout form. All electronic files or listings for ‘1099 information reporting only’ need to be received by February 8, 2010. Please email all electronic files to Melissa.Wesley@da.ks.gov and mail any paper listings to:

Division of Accounts and Reports
Central Accounting Services Section
900 SW Jackson, Room 351-S, LSOB
Topeka, Kansas 66612-1248

Attention: Melissa Wesley

Please note that the February 8, 2010 deadline is only available to those agencies that produced and mail their own 1099s, and the Division of Accounts and Reports just files the informational return with the IRS. If the Division of Accounts and Reports produces and sends the 1099s for the agency, the January 18, 2010 deadline is applicable. 

When submitting data via a text or Excel file, please be sure to follow the formatting instructions, which include:

No hyphens or dashes in the Vendor Number field, entry is the nine digit FEIN or SSN,

Just record and capitalize the first name, middle initial, last name in the Name field (i.e. Mr. John C. Smith would be reported as JOHN C SMITH), do not include forms of address (Mr., Ms., etc), or punctuation (i.e. periods or commas), or any other special characters.

No hyphens or dashes in the Zip Code field, just report the five (left justify) or nine digit 
zip code, (i.e. 66612-1248 would be reported as 666121248),

No dollar signs or decimals, in the amount field, just report the amount (i.e.
$3,312.48 would be reported as 000000331248).

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Attachment: 1099 FORMATS - NON-STARS 1099 RECORD LAYOUT xls 

DATE:	December 31, 2009
SUBJECT:	2010 Private Vehicle Mileage
EFFECTIVE DATE:	January 1 ,2010
CONTACT:	Shirley Gilchrist Ginnie Schirmer Lance Gagelman	(785) 296-2882 (785) 296-7021 (785) 296-2255	(shirley.gilchrist@da.ks.gov) (ginnie.schirmer@da.ks.gov) (Lance.Gagelman@da.ks.gov)
APPROVAL:
SUMMARY:	Reduced FY 2010 Privately Owned Vehicle Mileage Reimbursement Rates

The IRS reduced the privately owned automobile mileage effective January 1, 2010.  As required by K.S.A. 75-3203a(c)(1), the Secretary of Administration has reduced the private vehicle maximum* reimbursement rate for FY2010 effective January 1, 2010 to: 

• 50¢ per mile for privately owned automobile                  

The following remain unchanged:

• 32¢ per mile for privately owned motorcycle
• $1.10 per mile for privately owned airplane (based on air miles rather than highway miles)

*If a mode of transportation is available and is less costly than transportation by privately owned conveyance, mileage payments for use of a privately owned conveyance shall be limited to the cost of that other mode of transportation. (K.A.R. 1-18-1a (d)(1)).

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DATE:	February 4, 2010
SUBJECT:	Transitioning Encumbrances to SMART
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Randy Kennedy	(785) 296-2125	(Randy.Kennedy@da.ks.gov)
APPROVAL:
SUMMARY:	Encumbrances: Preparing for SMART

In July 2010, outstanding STARS encumbrances will be converted to SMART. Encumbrances in SMART will be equivalent to STARS contingent encumbrances that reserve appropriation/limitation, but not cash. There will be no equivalent to the STARS firm encumbrance in SMART. Vendor specific encumbrances will convert as Purchase Order (PO) encumbrances and non-vendor specific encumbrances will convert as General Ledger (GL) encumbrances.

Prior to June 30, 2010, any existing firm (Transaction Code 854 or 891) encumbrances in STARS must be converted to contingent encumbrances or be cancelled.

In preparation for conversion to SMART, it is necessary to review and clean up STARS encumbrances. On February 2, 2010, we distributed the annual listing of prior year encumbrances to aid in this endeavor. 

If you anticipate prior year DA118’s carrying over to SMART and the remaining balances can be identified to a specific vendor, you should submit a DA107 to cancel the DA118 and replace it with a new DA107 using transaction code 864 and the appropriate vendor number. These transactions should be batched together. This will allow those encumbrances to convert to Purchase Order encumbrances in SMART.

At fiscal year-end 2010, agencies will have the option of submitting either vendor specific DA107 encumbrances or DA118’s. The DA118 operator id’s will now be DA118/DA107 operator id’s. They will allow either Transaction Code 892 with no vendor number or Transaction Code 864 for vendor specific encumbrances (TC 854 and 891 will not be allowed). DA107, DA101, DA146 and DA47 encumbrances will convert to Purchase Order encumbrances in SMART. An informational circular will be issued with updated year-end encumbrance procedures. Existing DA118 encumbrances will be converted to GL encumbrances in SMART and will require the following procedures for payment in SMART:

• The agency will need to reduce the GL encumbrance by the amount to be paid to the vendor.
• The agency will be required to create a prior fiscal year requisition by entering it into SMART. SMART will apply the current budget date on the requisition. After the requisition has processed through workflow approvals and sourced to a Purchase Order, the agency should review and update, if necessary, the PO, then put it on hold. The PO will carry the same current budget date as the requisition. The agency should then contact Accounts and Reports staff to change the budget date to the prior year budget date. Accounts and Reports staff will make the change, notify the agency, and the agency will remove the hold. The PO will be run through budget check, and be dispatched via the scheduled batch processes.
• The agency will then enter a voucher in SMART for payment.
• As long as the PO is copied into the voucher, and the voucher is matched, budget checked and approved, the system should pick up the voucher for payment and process it in the next available Pay Cycle using the prior year budget date.

While agencies have the option to continue utilizing the DA-118, you are highly encouraged to utilize the DA-107 encumbrance when the vendor is known. Since these encumbrances will convert to Purchase Orders in SMART, the process noted above for changing the budget date will not be required for the encumbrances that convert to Purchase Orders during cutover.

DATE:	March 3, 2010
SUBJECT:	Processing P-Card Transactions during SMART Implementation
EFFECTIVE DATE:	Immediately
CONTACT:	Tim Hund	(785) 368-6347	(Tim.Hund@da.ks.gov)
APPROVAL:
SUMMARY:	Special Procedures for Processing P-Card transactions during SMART Implementation

Special procedures are required for processing P-Card transactions during SMART implementation.

Transactions included on P-Card Billing Received in June 2010

P-Card transactions included on your agency’s regular P-Card billing received from UMB Bank (UMB) in the month of June 2010 (i.e., transactions posted to P-Card accounts in VISA through the 15th workday of June, which is June 21) and any other historic unpaid amounts that are due to UMB will not be electronically loaded into SMART for reconciliation and payment.

• Pay in STARS by June 29, 2010, or
  • Historic unpaid amounts that are due to UMB must be encumbered to assure that previous fiscal year funds are available to settle old debts.

Note: If an agency does not remit payment for historic unpaid amounts due to UMB, UMB may retain the agency’s annual rebate for the BPC, up to the amount of the historic unpaid amount that is due to UMB.

• Encumber with a Form DA-107 in STARS by June 29, 2010, if not paid in STARS. Use UMB as the vendor
  • The encumbrance will be converted to a Purchase Order (PO) in SMART and will be paid with a voucher in SMART. (The voucher will link to the PO.)

June P-Card Transactions Subsequent to the P-Card Billing Received in June 2010

P-Card transactions posted in VISA during the June 22 through June 30 period will be electronically uploaded, reconciled and paid in SMART, regardless of whether it is to be paid with fiscal year 2010 or 2011 funds.

• Encumber funds with a Form DA-107 in STARS by June 29, 2010, if payment is to be  made with 2010 funds. Use the merchant as the vendor on the DA-107.
  • The encumbrance will be converted to a Purchase Order (PO) in SMART and linked to the P-Card transaction(s) during reconciliation. SMART will generate a voucher for reconciled transactions.
  • When calculating encumbrance amounts, we suggest that agencies contact UMB in advance to request a report of transactions that posted in VISA during the June 22 through June 25 period and then estimate amounts that will post in VISA during the June 28 through 30 period.

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DATE:	March 8, 2010
SUBJECT:	Year-end encumbrances
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Randy Kennedy	(785) 296-2125	(Randy.Kennedy@da.ks.gov)
APPROVAL:
SUMMARY:	Processing DA107s in lieu of DA118s

Because of the transition to SMART, it is strongly suggested that agencies submit vendor specific DA107s rather than DA118s for the 2010 year-end. Your DA118 operator ID has been altered to be a DA118/DA107 operator ID. This will allow you to use transaction code 864 in addition to 892. These sign-ons are available for use immediately. Please submit DA107 batches separate from DA118 batches.

Transaction code 864 requires a vendor number and suffix. The DA107 numbering scheme can either use the DA118 format or the DA107 format. The DA107 format is P710xxxx, where the 1st character can be A, B or C, the next three characters are fixed, and the last four are your choice. The DA118 format is PA900XXX or P0900XXX with the first character A, B or C, the next four characters A900 or 0900, and the last three are your choice.

If you have submitted your DA118s as datasets in the past, you can contact me and I will supply you with the IN record layout for DA107 encumbrances. Since this is a new process, it is preferable that you initially transmit a small batch to confirm the fields are formatted properly.

If you have keyed on-line DA118s in the past, you can key online DA107s. DA107s are keyed just like payment vouchers, except the batch type is 3, and the DISB-METH field is blank. Use F3 to enter the description. Note that the voucher will print DA120 at the top left rather than DA107.

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DATE:	April 28, 2010
SUBJECT:	Intangible Assets
EFFECTIVE DATE:	April 28, 2010
CONTACT:	Martin Eckardt	(785) 296-2661	(Martin.Eckardt@da.ks.gov)
	Gail Barnhart	(785) 296-3404	(Gail.Barnhart@da.ks.gov)
APPROVAL:
SUMMARY:	GASB 51 Reporting Intangible Assets

For the fiscal year 2010 Comprehensive Annual Financial Report (CAFR), the Division of Accounts and Reports must implement Governmental Accounting Standards Board Statement Number 51 (GASB 51), Accounting and Financial Reporting for Intangible Assets. GASB 51 now requires the State to capitalize intangible assets. Examples of intangible assets include computer software, easements, water rights, timber rights, patents, and trademarks. GASB defines intangible assets as having all of the following:

• Lack of physical substance (i.e. software, right of way)
• Nonfinancial nature (i.e. not cash, investment, receivables, etc.)
• Initial useful life of greater than one year

One of the items that need specific attention is the capitalization of internally developed intangible assets (developed in-house by agency personnel or third-party contractor on behalf of the agency). Internally developed intangible assets should be capitalized if the following has occurred:

• Agency knows the specific objective of project and nature of service capacity it should have when completed.
• Agency has demonstrated technical feasibility of successful service capacity when completed.
• Agency has demonstrated intention, ability and presence of effort to complete.

For internally developed intangible assets, expenditures incurred subsequent to meeting the above criteria should be capitalized. For internally generated software, only capitalize theapplication development stage of internally generated software. GASB 51 defines three stages of software development as:

• Preliminary project stage – includes conceptual formulation, evaluation of alternatives, determined existence of needed technology, and final selection of software made. Do not capitalize. Expense as occurs.
• Application development stage – includes software configuration and software interfaces, coding, installation to hardware and testing, including parallel processing phase. Expenditures in the application stage should be capitalized only if 1) the expenditures were incurred subsequent to the completion of the preliminary stage and 2) management implicitly or explicitly authorizes and commits to funding the software project. All costs should be recorded as construction in progress until the system is usable. Labor costs should be capitalized, however, general administration costs and overhead costs should not be capitalized (AICPA SOP98-1).
• Post-implementation/operation stage – includes application training, data conversion (beyond that needed to make the system operational) and software maintenance. Do not capitalize. Expense as occurs.

Data conversion should be considered an activity of the application development stage only to the extent it is determined to be necessary to make the computer software operational for use. Otherwise, data conversion should be considered an activity of the post-implementation/operation stage. Costs associated with internally generated computer software should be applied based on the nature of the activity, not the timing of its occurrence.

Software updates should only be capitalized only if it meets the threshold and one of the following applies:

• Software is able to perform tasks that it was previously incapable of performing.
• Software increases efficiency of computer software.
• Software extends the useful life.

For CAFR reporting, we have established a threshold of $250,000 for intangible assets (including software). Agencies still have stewardship responsibilities for all intangible assets less than $250,000, however, these items will not be reported in the CAFR or form DA-87. For those agencies with Federal funds, you should be aware that the Federal threshold is currently set at $5,000.

Retroactive reporting is required for intangible assets acquired July 1, 1980 or later, except those with indefinite useful lives and internally generated intangible assets. For indefinite useful lives intangibles and internally generated intangible assets, reporting is required to begin with fiscal year 2010 expenditures. As in previous years, Accounts and Reports will provide agencies form DA-87 with the beginning balances as provided for FY 2009. To assure we are recording these transactions correctly in the CAFR, for FY 2010 we have inserted a worksheet to reconcile changes due to GASB 51. If your agency has any intangible assets that are not software, please provide a description of the asset on the form DA-87.

Should you have any questions, please contact Gail Barnhart at (785) 296-3404 (Gail.Barnhart@da.ks.gov), Fatima Gilbert (785) 296-2127 (Fatima.Gilbert@da.ks.gov) or Leroy Charbonneau at (785) 296-2130 (Leroy.Charbonneau@da.ks.gov).