Payroll, payroll system and payroll processing system

It is to be noted that the terms payroll system and payroll processing system are often used indistinctly to refer to a computer system which processes payroll.

Although this study is focused on payroll processing systems, payroll should not be seen as an isolated software application, as it heavily interfaces with human resources management systems (HRMS) and financial information systems.

Some organizations have expressed their concerns about confidentiality issues regarding the provision of payroll processing services by another United Nations system organization.

Payroll systems used by various UN system organizations

The payroll function is not a mission critical activity for the United Nations system, although the sensitivity of timely and accurate payroll results makes it a high visibility function.

The system migration from Integrated Management Information System (IMIS) was smooth, and payroll is now being successfully processed.

This should not be a problem to outsource payroll services is a common practice in the private sector, more sensitive to confidentiality issues than the United Nations system where salary scales are public.

Some agencies have not yet finished the migration of payroll operations and still run their own system.

Offshoring means relocating non core activities to low cost areas while maintaining the activity within the organization.

The outsourcing of payroll processing could be either internal within the United Nations system where some organizations would act as service providers for others, or external in which some private or public service providers would deliver payroll processing services.

Business cases are being developed for, inter alia, payroll by the ICC.

Organizations planning to purchase a new payroll system have now a choice, either to buy a new one or to in source payroll delivery using one of the United Nations organizations as a payroll service provider in both cases there is an upfront investment.

The report examines payroll service delivery in different organizations in order to ascertain major obstacles and to develop recommendations for future improvement of payroll systems and processes.

Finally, specific requirements in this respect should be dealt with in the context of the technical working groups to be established and regulated through a mandatory contract or memorandum of understanding between the client organization and the selected payroll service provider.

The Board notes that the submitted draft service level agreement regarding central services for the payroll function will need to be revised as it did not specify the specific control processes that UNDP is to undertake to provide UNOPS with assurance that the payroll was valid, accurate and complete.

Employees are paid biweekly and agencies pay on average US 120 per employee per year to the payroll service provider.

The current payroll service delivery environment is the product of an uncoordinated approach, heavily influenced by organization unique interpretation of common rules and regulations.

Establish leader organizations or common service entities, which can provide payroll services, on a fee or other financial basis, to those agencies that have old and antiquated systems Harmonize, simplify and standardize the application across the United Nations system of the common staff rules and regulations relating to payroll and allowances and, Report back to the General Assembly on the implementation status of this recommendation at its sixty second session.

These leader organizations and or common service entities, such as the International Computing Centre (ICC), could offer payroll services to those organizations interested in their specific solutions.

It is obvious that if a given organization opts for in sourcing, there will be an initial cost associated for the adaptation of the chosen payroll service provider system to the needs of the client organization.

Although no formal definition could be found for payroll system the association of both terms (payroll and system) suggests a method or procedure by which the employees of an organization are paid.

Phase 1 Consolidation of current payroll systems into several groups of leading organizations or common service entities, acting as payroll service providers (internal to the United Nations system).

The United Nations system operates today about 17 different payroll processing systems.

The number of payroll systems and providers has now officially been reduced to four.

UNICEF agrees that reducing the number of payroll systems is the first step towards a common payroll system.

The actual consolidation of payroll systems is not dependent on the full harmonization of the interpretation of common rules and regulations.

Payroll processing lends itself to opportunities for public private partnerships and outsourcing options that would provide better value for the United Nations system and allow resources to be better focused on mission delivery.

The primary tasks of the Payments Unit are (a) maintenance of payroll and accounts payable receivable (b) making miscellaneous and daily payments (c) calculation and application of cost of living and other adjustments and (d) processing and maintenance of after service health insurance records.

UNDP has issued draft service level agreements for payroll and treasury services, which UNOPS is reviewing to ensure that functions and responsibilities, especially with regard to controls, are properly defined.

A payroll processing system can be defined as a computer system used by an organization to process and pay the wages of employees.

There were no common guidelines and most of the payroll systems were in house developments and not interconnected.

These costs could be shared by the payroll service provider and the client organization if just one system is used, while if there are two different systems both organizations would bear separate maintenance and software upgrading costs.

Comment by the Administration. Subsequent to the implementation of the IMIS payroll and global payroll to general ledger interface in July 2004, the Atlas general ledger module was rolled out in September 2004.

The Board notes that, by April 2005, UNOPS had not performed payroll reconciliations to verify the validity, accuracy and completeness of the payroll transactions in its general ledger.

Investment in payroll systems could provide significant returns in cost avoidance and in better system management.

The table below (see annex) shows the different types of payroll systems in use within various organizations, funds and programmes.

These posts are requested to strengthen the payroll and vendor payment units in view of the full deployment of the military personnel and civilian police.

In the views of UNICEF, off shoring will not be an effective mechanism for the volume of transaction processing needed for each organization unless the scale and volume is increased significantly by combining payroll processing for many organizations into a single entity.

In some cases the systems are so old that it is difficult to estimate what the initial acquisition or development costs were, related to payroll processing.

The different interpretations of common rules and regulations have contributed to complex sets of requirements that, when taken together, unduly complicate payroll administration and modernization.

Our estimate of savings emanating from a common approach to payroll delivery is in the range of US 100 million over 10 years.

Although it would be preferable to proceed with the harmonization as a first step, the harmonization effort should not prevent the consolidation of payroll systems from taking place simultaneously.

In Cameroon, for example, a new personnel and payroll data system allows better control of procedures, including the elimination of listing non existent employees on the payroll ( ghost workers ).

In addition to the initial investment required to customize the service provider's payroll system to meet the client organization's needs, there are other operating costs associated to the provision of the service.