April 2016

Payroll and HR: Identifying responsibilities and working together

by Zach DiSchiano

Payroll and human resources are both vital units in a school district, but confusion and frustration can arise from lack of clarity in understanding which department can most effectively handle specific tasks.

In any district, the departments need to form a partnership that focuses on making sure employees are paid appropriately and in a timely fashion. HR’s part of the partnership is geared toward entering and updating employee records in the HR/payroll system, while payroll’s part is primarily focused on generating paychecks for employees that are accurate and complete.

The specific differences between what each department’s responsibilities are listed below:

Human resources
  • Provides expert leadership in determining what to pay
  • Determines gross pay
  • Provides leadership for design and implementation of the compensation plan including ensuring stipend schedules are clear, documented, and applied consistently across campuses and departments
  • Receives, reviews, and enters all stipend assignments (e.g., teaching, travel, extracurricular, and UIL)
  • Creates employee work calendars
Payroll
  • Processes transactions to disburse and account for payroll funds
  • Determines net pay
  • Reconciles coding of salaries against master budget
  • Calculates pay-offs for assignment changes and early resignations or terminations
  • Processes pay according to days worked for assigned work calendar
Part of the cause for tension between payroll and human resources is an absence of appreciation for what the other side is doing. HR needs to understand the deadline pressure and lack of flexibility required to produce payroll, while payroll needs to understand that pay systems are designed to support the recruiting and retention needs of the district, and not necessarily to support payroll software applications.

Dividing up the responsibilities provides for checks and balances against fraud and errors, and neither department should be solely responsible for all pay activities. Working together eases the substantial amount of pressure on both departments and having each group’s responsibilities explicitly detailed allows for accountability and transparency on both ends.

Access to essential data systems should be divided between those screens that set up the amounts to pay individual employees and those screens that process fund expenditures for paychecks. This arrangement prevents payroll from making pay changes without authorization and prevents HR from accessing payroll funds. Additionally, errors are more likely to be noticed and caught by one side or the other.

Information that each group can access or edit are delineated below:

Human resources
  • Data entry screens for entering pay amounts
  • Enter demographic information, assignments, and gross pay amounts including base salary, stipends, and supplemental pay
  • Assign job title descriptors of all positions (e.g., job, title, class, and PEIMS codes)
  • Create new position and job codes and maintain job title descriptor standards
  • Should have view-only access to payroll screens
Payroll
  • Set up and proof payroll fund expenditures by budget codes
  • Enter all deductions including insurance, taxes, wage garnishments, retirement deductions, and W2 information
  • Determine standard descriptors of all deduction codes
  • Check funding availability to ensure position is budgeted and funded
  • Should have view-only access to HR screens
Cohesiveness between the two departments is imperative to a district’s success. This can be done by ensuring each group’s responsibilities are specifically defined and that access to data systems is allowed or restricted accordingly. When both departments work together effectively, tension will be reduced and cooperative attitudes will flourish.