Tax Sheltered Annuities

A TSA is a retirement account similar to an IRA or 401 (k). The TSA is tax exempt until redeemed.

Paper vouchers are the present method of transmitting TSA data to vendors.

Vendor is the term commonly used for TSA providers. Payroll Flow through Orange County Superintendent of Schools Three Orange County entities are involved in school system payroll flow through Orange County. The entities are: OCSS School District Payroll Systems (SDPS); School Districts Designated Administrators (SDDA); and the Orange County Treasurer (OCT). Important “target days” for SDPS are: five days prior to payday; three days prior to payday; one day prior to payday; and payday. These terms are used in Table 2. State Treasury funds and local revenues arrive periodically, and are not covered in this report. Table 2 below, encapsulates 6 pages of prose into one diagram and a one-paragraph description. The left-hand side (BOLD) represents paper transfer flow. The right-hand side (not bold) represents electronic transfer of checking account data. Presently, there is no electronic TSA data transfer. The shaded bars are the “target days”. The arrowhead connotes the day the action takes place. Table 2--Payroll Flow Diagram |----------------------Paper transfer----------------------------------------------Electronic Transfer---------| STATE TREASURER Local Revenues Days Prior to Payday (cid:208) OCT | 5 Request $ Send $ SDPS | 3 ELECTRONIC CLEARING HOUSE. TSA Vouchers Paychecks SDDA | PAYDAY SCHOOLS Send TSA vouchers Employee Paychecks Employee Checking Accounts Mail ∆ 2 to 6 days TSA VENDORS Five days prior to payday, SDPS requests and receives funds from OCT. Three days prior to payday, SDPS electronically transfers checking account data to an Electronic- Clearing-House (ECH) for those employees opting for this service. One day prior to payday, SDPS sends paper paychecks and TSA vouchers by courier to an SDDA in each school district. On payday, the SDDA sends paychecks by courier to schools in the 2 district, and TSA vouchers to vendors by first class mail. Also on payday, the schools deliver the paychecks to employees and the ECH electronically transfers checking account data to employee’s banks. Mail delay outside Orange County is 2 to 6 days. The routine described above is repeated twice to enable paying classified employees on working days closest to the 10th and 25th, and once again for certificated employees paid on the last working day of the month. METHOD OF STUDY To gather data for the report, the Grand Jury first visited the SDPS. This department provided a listing of all Orange County school districts participating in the TSA investment program, including the total number of employees in each school district making contributions. From that list, the Grand Jury selected, and visited, a small, a medium, and a large school district, to discuss overall payroll procedures, and obtain printed data pertaining to TSA handling procedures. CONCLUSIONS There are inherent delays in mail transfer of TSA vouchers which electronic transfer would negate. The United States Postal Service, though immune from Orange County Grand Jury scrutiny, non-the-less graciously provided us with mail times. FINDINGS In accordance with California Penal Code §933 and §933.05, each finding must be responded to by the government entity to which it is addressed. These responses are submitted to the Presiding Judge of the Superior Court. The 2001-2002 Orange County Grand Jury finds that: 1. The SDPS is expeditiously handling TSA paper vouchers, inside Orange County. Refer to Recommendation 1.