ADP

Summary: Presented by: Ms. Masana Mailliard, Interim Chief Financial Officer, Division of Finance

Request: It is requested that the Board of Education approve the renewal of the contract with ADP for select post-payroll processing services under a Global Master Services Agreement. Each service provided under the contract will be billed based on the attached schedule of fees. The annual cost of the contract is estimated to not exceed $230,000. Services are expected to begin in conjunction with the HR/Payroll ERP implementation of the Tyler Munis HR/Payroll modules. The initial term of this annual agreement shall end on December 31, 2022. There are four one-year optional renewals. With each renewal option, ADP may increase their fees by up to 4% upon 30-day written notice. Fees for these services are based on a schedule of fees and actual transaction volume. To date, no costs have been incurred.

ADP was initially contracted in March 2021 to provide certain post-payroll processing services, including electronic wage payment; employee check payment processing; Pay card processing; commercial employment and income verification; employment tax filing; W2 processing; and wage garnishment. Implementation is scheduled to coordinate with the expected go-live date for the Tyler Munis HR/Payroll application. The initial agreement was entered as a sole source under the terms and conditions of ADP’s contract with OMNIA Partners, Public Sector. The contract was competitively solicited and publicly awarded by a government entity serving as a lead agency.

Why: DeKalb County School District pays over 15,000 employees. Currently, post-payroll processing activities are managed by staff, Bank of America, Equifax, and Rapid Pay. The current process has experienced occasional problems with timely tax filing and garnishment distributions. The current system does not provide online access to W-2 information or tax and garnishment history. It is expected that the ADP processing will represent a reduction in fees currently incurred with Bank of America for direct deposits. It will also allow staff to be better address to other Finance and HR functions. ADP also maintains commercially reasonable business continuity and disaster recovery and will follow such a plan if the district’s payroll functions are at risk during a potential shutdown.

Details: ADP was engaged to make the direct deposit of funds into employee checking accounts or provide printed checks or “pay cards” for those employees not receiving direct deposit. ADP also provides several enhancements that would expand employees’ online access, including more details on pay stubs, longer W-2 archive information, as well as Pay Card access would include a larger network of fee-free ATM access points and mobile app support. At the end of the calendar year, ADP would process and mail W-2 forms and provide employees online access to these documents. In addition, ADP would make all tax payment filings with the State and IRS, distribute funds to the deferred compensation managers, and process all garnishments reducing errors and ensuring compliance with reporting requirements. Online access to these records would be provided to DCSD staff. Employment verifications services were included in the engagement.

The intent behind the engagement with ADP was to reduce the number of interfaces that would be needed when implementing the Tyler Munis HR/Payroll modules, reduce the cost of direct deposit, check printing, and pay card activities, and ensure the timely filing and distribution of taxes, garnishments, and W-2 forms. In addition, ADP would provide online access to paystubs, W-2, and garnishment information. Although the engagement includes employment verification, no change in cost or practices were expected since ADP partners with Equifax, our current provider of these services.

As the implementation of Tyler Munis HR/Payroll modules have been delayed until January 1, 2023, the services contemplated under the ADP agreement are not expected to be activated until after that date. However, during the interim period, HR entered discussions with ADP to consider additional services. These services include Unemployment Claims Management and Affordable Care Act Compliance Management.

Financial impact: This is a budgeted expense not to exceed $230,000. The GL code from which the expense will be paid is: 100.2500.530000.00011.7200.9990.8010.050.0000.

Contact: Ms. Masana Mailliard, Interim Chief Financial Officer, Division of Finance, 678.676.0446
Dr. Tekshia Ward-Smith, Administrator, Division of Human Resources, 678.676.0168

Effective: January 1, 2023

Status: Approved by General Counsel.