FY 2020

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