Financial Affairs Policies

VIII-99.02

UMB COMPENSATION OVERPAYMENT AND RECOVERY

Financial Affairs   |   Approved January 1, 2016


Responsible VP/AVP

Dawn M. Rhodes, MBA


Applies to Faculty, Staff


Revision History

Effective Date: January 1, 2016


Policy Statement

Purpose:

  • The purpose of this policy is to prescribe the standards for collecting debts owed to UMB as a result of overpayment made to a UMB employee. Debt collection will be carried out by UMB in accordance with the Maryland State Central Collection Unit’s (CCU) Standards for Administrative Collection of Claims.

Policy Statement:

  1. Department payroll representatives and administrative staff with fiscal authority are responsible for the timely review of compensation payments to employees. When an overpayment of compensation is discovered it must be reported promptly to Financial Services- Payroll (FS-PR). The departments must work with FS-PR to provide notification of the overpayment and debt to the employee and to correct the overpayment as soon as possible.
  2. Employees or former employees who discover an overpayment of compensation must report it immediately to their supervisor. The supervisor must immediately report the overpayment to the department payroll representative. The department payroll representative must immediately report the overpayment in writing for corrective action to FS-PR.
  3. Any amount of overpayment of compensation that has been charged to a restricted fund source must be transferred to an unrestricted source.
  4. Any active or former employee who has received an overpayment of compensation will be notified of the debt for the overpayment and the available repayment terms. A written repayment agreement issued to an active employee must be signed by the employee and the Associate/Assistant Vice President, Associate/Assistant Dean, or designee, in the employee's campus unit. Written notice of a debt issued to a former employee must be signed by the Associate/Assistant Vice President, Associate/Assistant Dean, or designee, in the employee's campus unit.
  5. If an employee separates from UMB employment before a debt for overpayment has been fully repaid, UMB has the right to set off against any leave balance payouts or final compensation payments due to the employee the amount of outstanding debt. The employee remains liable for any part of the debt that cannot be satisfied from final compensation.
  6. UMB will take appropriate steps to see that repayments are treated in a manner consistent with the State of Maryland Central Payroll Bureau (CPB) and IRS rules.
  7. UMB will make necessary attempts to see that compensation overpayments are repaid. If amounts due UMB are not repaid within a time frame dictated by Maryland State regulations, or a written repayment plan acceptable to UMB is not agreed upon, then UMB will refer the debt to the CCU.
  8. Individuals with outstanding debts are not eligible for conversion from contingent to regular positions, referral for consideration for new UMB jobs, or rehire at UMB until the debt is paid in full.
  9. Employees who fail to report, and approvers who improperly authorize or fail to report, overpayments of compensation may be subject to disciplinary and/or criminal action. In the case of employees, such actions would be in addition to action to collect the debt for overpayment.

Applies To:

  • All UMB Personnel

Definitions:

  • Compensation - Compensation includes all types of payments issued to a UMB employee through the State of Maryland Central Payroll Bureau or paid to a third party on behalf of the employee. Examples of compensation include, but are not limited to, all salaries, wages, supplemental pay, healthcare premiums or subsidies, moving reimbursements, relocation allowances, travel and business expense reimbursements, equipment allowances, bonuses, advanced leave, and leave payouts.
  • Debt - Monies owed to UMB as a result of an overpayment.
  • Designee - An employee officially chosen to act on behalf of another employee. The designees of an Associate/Assistant Vice President or Associate/Assistant Dean should be a professional who possesses the appropriate skills, knowledge, and experience needed for making responsible business decisions related to compensation and payroll.
  • Employee - Includes all types and classes of employees, such as officers, faculty, staff, students, post-doctoral fellows, regular employees, contingent I and II employees, and all foreign nationals.
  • Overpayment - Any compensation paid to an employee that is in excess of the amount owed to the employee and/or in excess of the payment the employee is entitled to receive.
  • Payroll Representative - Individual identified in each department or in a service center who is responsible for initiating or approving compensation paid to employees. A list is maintained by the Department of Financial Services and is published on its UMB website.
  • Repayment - Payment for a debt owed to UMB.
  • State of Maryland Central Payroll Bureau (CPB) - The State of Maryland agency responsible for issuing paychecks and processing tax forms for UMB.

Scope:

  • All current or former employees paid compensation through the UMB payroll system. In instances of alleged fraud or misappropriation where the employee debt has been referred to the Maryland State Office of the Attorney General (OAG) for criminal prosecution, UMB may defer to the OAG and/or the courts for the appropriate method to be used to collect the debt.

Roles and Responsibilities:

  • The Department of Financial Services, under the direction of the Chief Administrative and Finance Officer (CAFO), is responsible for establishing procedures to promote compliance with this Policy.
  • Department Payroll Representatives, Human Resource Partners, Administrators, and other personnel involved in the initiation and approval of any form of compensation to employees are required to follow the rules set forth in the UMB A&F Financial Services Standard Operating Procedure No. 3315- Compensation Overpayment and Recovery.

Exceptions / Request Process:

  • Exceptions to this policy must be approved in writing by the CAFO. Requests may be submitted to the Controller using the Policy or Procedure Exception Request Form available on the Financial Services website. Alternatively, a request may be submitted in the form of a memo to the CAFO must be signed by the appropriate Dean/Vice President or Associate Dean/AVP.

Downloads

See UMB A&F Financial Services Standard Operating Procedure No. 3315- Compensation Overpayment and Recovery

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