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OHUG Global ConferenceLas Vegas, NVJune 14 – 18, 2009

Benefits Auditing

• Highlight some of the challenges introduced by Oracle Advanced Benefits

• Highlight the need and importance of implementing auditing controls

• Highlight the audits and controls Dunkin’ Brands, Inc. has implemented

• Demonstrate a custom tool developed by Dunkin’ Brands, Inc.

Objectives

• Sean Fielding sean.fielding@dunkinbrands.como IT Manager, Business Process Integration

Services

• Mike Metcalf michael.s.metcalf@gmail.como Senior HRIS Analyst

• Karen Baggett karen.baggett@dunkinbrands.como Senior HRIS Analyst

Presenters

Dunkin’ Brands, Inc.

Environment

• Oracle 11.5.10.2 (Implemented Nov-2007)o Human Resourceso Employee Self-Serviceo Manager Self-Serviceo Advanced Benefitso iRecruitemento Talent Managemento Compensation Workbencho Time and Laboro iLearningo Discoverer 4i

• ADP Enterprise (Implemented Nov-2007)o ADP Connection

Initial Challenges

New to HRMS Suite of Oracle Applications

Implemented “Big Bang”

Tightly Integrated Applications

Heavily reliant on implementation partners

Controls not in place

Typical Benefits Process

Advanced Benefits

Vendor

Element Entries

Vendor

Vendor

ADP Connection

ADP Enterprise

HumanResources

Employee

Life Events

ElectBenefits

HR

HiresFires

Benefits

Elections

Send Enrollments

ServiceProvider

Service Provider

ServiceProvider

ReceiveEnrollments

DeductionsEarnings

Updates

Payroll

BackfeedFiles

BackfeedData

BillingStatements

BillingStatements

BenefitsManagerBenefits

Benefits

ManageDeductions

Life Without Auditing

• Billing Statements

• Employees identified issues

Paycheck

Discrepancies

Denial of Coverage

• Impact not evaluated

Audit Categories

Ad

justm

ents

Co

nfig

uratio

ns

Lif

e E

ven

ts Ven

do

rs

Backfeed

Ded

uct

ion

s

“that’s a lotta fish to fry”

Configuration Auditing

• Validate Benefit plans and rates are inline with business requirementso Detailed test planso Yearly review of configuration

Configurations

Life Event Auditing

• Validate Life Events Validate Collapsing Rules Review Backed out Life Events Audit Custom processes

• Validate Participation Process Review errors Review results

• Examples Backed out Life Events during

Open Enrollment period

Life Events

Vendor Auditing

• Validate outbound data accuracyo Periodic review of interfaces

• Validate inbound data accuracyo checksums o Hash totalso Periodic report comparisons

• Validate Billing Statements

• Validate Interface errorso Error handling procedures

Ven

do

rs

Backfeed Auditing

• Compare backfeed inbound file against standard ADP reports

• Compare 3rd Party Payroll Tables tie against Payroll resultso Use checksums and totals on interface files

• Validate and resolve process errors

Backfeed

Deduction/Earning Auditing

• Validate elections are accurately reflected in employee paychecks

• Validate fast formulas are processing correctly

• ADP Connection issues

Dedu ctio ns

Adjustment Auditing

• Validate financial controlso Perform a period review of the adjustments and

supporting controls

• SOX compliance

• Traceability

Adju

stm

ents

Why a Tool?

• Catch all

• Become proactive

• SOX Compliance/Financial Controls

• Transparency

• Usability

• Increase paycheck accuracy

• Decrease Employee Issues

Solution

Developed a custom Benefits Audit Workbench (BAW) tool.

• Initial focus on deduction/earningso Based on a initial review of our exposure,

this area was deemed the most problematic.

• Provide Benefits with decision making datao Benefit resources spend their time

researching issues rather than gathering information.

Benefits of Tool

• Q2 2008o Project initiated for analysis of the deduction/earnings o Individual reporting implemented

• Q2 2009o BAW1.0 Introducedo Identified a number of issues including

Bugs in the delivered Oracle ADP Views which required patches to be applied

Rate calculation issues Bugs in Fast Formulas Bug in the rounding of the first deduction Mid-year FSA elections

• In the Pipelineo BAW2.0

Enhanced look and feel, improved usability Additional functionality for traceability and compliance

around adjustments

Benefits Audit Workbench

• Concurrent program scheduled on a weekly basiso Produces a benefits snapshot by employee

and payroll period dimensions.

• Self-Service Web Pageo Provides a user workbench for reviewing and

addressing issues.

Initial Rules

• Flexible Spending Account Trending

• Deduction Trending

• Missing Initial Payment

FSA Trending Rule

• Identifies employee FSA deductions that are trending towards a total payroll contribution amount that is different from the employee’s coverage amount. These are identified by the following calculation:

• Trending = Benefit Coverage Amount – (Actual YTD Payroll Deductions + Scheduled Payroll Deductions)

• Common Causeso Mid Year electionso Fast Formulas incorrectly calculates the deduction

schedule

Deduction Trending Rule

• Identifies employee deductions where the actual payroll contribution amount does not equal the expected payroll contribution amount for the year. These are identified by the following calculation:

• Trending = Actual YTD Payroll Deductions - Expected YTD Payroll Deductions

• Common Causeso Fast Formula rounding issueso ADP View Date issues

Missing Initial Payment

• For benefits, such as Medical and Dental, where coverage starts on the 1st of the next month, a missed payment can occur when deductions start in a pay period after the coverage period.

• For example:

Hired

1/6/2009

Election

1/21/2009

Coverage Start

2/1/2009

30 Day window to elect coverage

Life Event Closed

2/6/2009

Deduction Start

2/15/2009

Pay Period 4 Pay Period 5

Deduction payment never taken

Demonstration

• Core Functionality

• Deduction Trending Example

• FSA Trending Example

• Missing Payment Example

• Adjustments Example

Questions