Recovering Payroll Overpay

All faculty, staff and students also have an affirmative responsibility to report any overpayment (made to them or others) to the Department of Human Resources and to repay any funds not due to them. It is the policy of the University of Massachusetts Dartmouth to recover payroll overpayments in accordance with the procedures set forth below. The Department of Human Resources is responsible for calculating and informing faculty, staff and students of any inadvertent overpayments.

Upon learning of an overpayment, the Department of Human Resources shall also notify the Campus Controller and the University Internal Auditor’s Office of the overpayment, how it occurred, and efforts to collect funds and correct any procedural errors related to the overpayment.  Depending on the size of the overpayment and how it occurred, the Campus Controller or University Internal Auditor’s Office may instruct the Department of Human Resources to notify other entities, including the campus Department of Public Safety, the University General Counsel’s Office, the University Treasurer’s Office, and/or the Commonwealth of Massachusetts Office of the State Auditor pursuant to Chapter 647 of the Acts of 1989.

The Department of Human Resources is also responsible to arrange for the timely repayment of any overpayment, in accordance with the procedures and guidelines below.

Applicable to: All current and, where applicable, former faculty, staff and students.

II. PURPOSE

The purpose of this policy is to ensure the accurate and timely collection of inadvertent overpayments and to ensure the timely notification of overpayments to University Internal Audit and/or the Commonwealth of Massachusetts Office of the State Auditor.

III. DEFINITIONS

Overpayment, as used in this policy, means any inadvertent payment made through payroll to which the employee is not entitled. This payment may exceed the bi-weekly earnings for the current pay period; provided that payments made in arrears, payments made pursuant to any vacation or sick leave buyback program, and payments made upon termination for accrued but unused vacation time, longevity, or pursuant to a separation agreement are not considered overpayments.

Overpayments, including post-termination overpayments, due to intentional misrepresentation of hours worked or accrued are considered to constitute an ethical violation and can be classified as a fraudulent act. Faculty, staff and students who intentionally misrepresent hours worked are subject to discipline, up to and including immediate discharge, and criminal prosecution.  Upon learning of an intentional misrepresentation of hours worked, the Department of Human Resources shall immediately, prior to arranging any repayment, contact the campus Controller, the campus Department of Public Safety, the University Internal Auditor’s Office, and the University General Counsel’s Office and shall cooperate with various authorities to collect any overpayment.

IV. PROCEDURES

Whenever the Department of Human Resources learns of an inadvertent overpayment concerning a faculty, staff member or student, the Department of Human Resources will issue a notification to the affected faculty, staff member or student that contains the following:

A review of the payroll records reveals that you have received an overpayment.  This overpayment is a personal liability and must be repaid to the university.   The amount of the overpayment is as follows:

Gross Amount: ____________

Net Amount: ______________

The overpayment should be repaid as soon as possible. If the overpayment is repaid within the current calendar year, the liability is limited to the net pay amount of the overpayment and the Department of Human Resources will correct any inaccurate reporting to tax and other authorities.  However, if any part of the overpayment is repaid in a future calendar year, the liability will include the gross amount of the overpayment and you will be required to report the overpayment and subsequent repayment to the Internal Revenue Service and other tax authorities.

Please contact [name of HR representative] as soon as possible, but before the next pay period to arrange for repayment.  Repayment may be made in the form of a check made payable to the University of Massachusetts Dartmouth [or through payroll deduction in future pay periods].*

If the University is not able to negotiate a reasonable repayment plan, this may result in:

[Bi-weekly payroll deduction in the amount of ____ for ____ pay periods.]*

[Or further action to collect the overpayment, including notifying law enforcement authorities.**]

* Include in notification to current faculty, staff and students.

** Include in notification to former faculty, staff and students.

If the affected faculty, staff member or student contacts the Department of Human Resources, the Department of Human Resources shall negotiate a repayment schedule, in accordance with the following guidelines:

• Repayment should be prompt, but not pose an undue financial hardship on the affected faculty, staff member or student;
• Whenever possible, the repayment should be completed in the current calendar year;
• Former faculty, staff member or students may opt to apply any payments owed for vacation or sick leave buy back or accrued but unused vacation time or longevity payments (for former faculty, staff and students).
• In rare cases, former faculty, staff member or students may authorize the Commonwealth of Massachusetts State Board of Retirement to transfer funds from any retirement account to the University.

Any agreement for repayment will be in writing, signed by the faculty, staff member or student and an authorized university official.  The agreement will include: 1) a statement that the overpayment creates a liability on the affected faculty, staff member or student; 2) the terms of the repayment; and 3) the consequences for failure to abide by the terms of the agreement, including notifying the authorities listed below to begin action to collect any outstanding balance.

If the affected faculty, staff member or student does not contact the Department of Human Resources by the date specified, the Department of Human Resources will issue a notification that contains the following:

For current faculty, staff and students

On [date of first notification] this office informed you of an overpayment and instructed you to contact the Department of Human Resources to discuss repayment by [initial date] (letter attached).  As of today, you have not contacted the Department of Human Resources.

Accordingly, beginning in the next payroll period, the university will deduct [amount] from each bi-weekly pay period for [no.] pay periods.

If you would like to discuss this matter or arrange for an alternative repayment schedule, please contact me.

In determining the amount, above, Human Resources should follow the general guidelines outlined above.

Copies of the above letter will be sent to the campus Controller and the University Internal Auditor’s Office.

For former faculty, staff and students

On [date of first notification] this office informed you of an overpayment and instructed you to contact the Department of Human Resources to discuss repayment by [initial date] (letter attached).  As of today, you have not contacted the Department of Human Resources.

Accordingly, by this letter I am notifying the below-listed authorities to begin action to collect payment.

If you would like to discuss this matter or arrange for a repayment schedule, please contact me.

Copies of the above letter will be sent to the campus Controller, the campus Department of Public Safety, the University Internal Auditor’s Office, and the University General Counsel’s Office.

At the direction of the Internal Auditor’s Office, the Department of Human Resources shall also report the matter to the Commonwealth of Massachusetts Office of the State Auditor pursuant to Chapter 647 of the Acts of 1989.

The Department of Human Resources will cooperate with various authorities to collect any overpayment.

V. RESPONSIBILITY

Responsible Parties within Human Resources Department:

Appropriate HR Business Partner (communication/notification)

Payroll Manager (calculation of overpayment, deductions)

Monitoring:  The Department of Human Resources will investigate the cause of any overpayment and take necessary action to prevent like or similar occurrences where appropriate, discipline will be imposed consistent with contractual guidelines.  The results of any such investigation shall be forwarded to the University Internal Audit Office for comment.  At the direction of the University Internal Audit Office, the Department of Human Resources shall forward the results of any such investigation to the Commonwealth of Massachusetts Office of the State Auditor pursuant to Chapter 647 of the Acts of 1989.

VI. ATTACHMENTS

None

VII. APPROVAL AND EFFECTIVE DATE

Effective upon signature by the Chancellor October 15, 2010