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Risks associated with the payroll function include the introduction of non-existent (ghost) employees, unauthorised amendments made to input data, and the payment of excessive overtime, bonus or travel claims. This section suggests some controls which should be in place.
| Fraud type: |
Creating fictitious employees whose pay is then obtained by the fraudster or by someone in collusion; or obtaining pay which is not consistent with an employee’s grade |
| Suggested controls: |
Provide budget holders with sufficient (and timely) information to enable them to reconcile staffing costs against budget |
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Validate, record and authorise all updates to the payroll system |
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Ensure that only authorised personnel are able update the payroll system |
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Ensure that the payroll, or individual records on it, cannot generate more than one payment for each period |
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Check that starters and leavers are correctly added to / deleted from the payroll |
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Segregate duties between those responsible for authorising appointments and those who make changes to standing data and action payments |
| Fraud type: |
Making false claims for allowances |
| Suggested controls: |
Claims should be submitted in writing by the claimant. |
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All claims should be checked to vouchers and any other supporting documentation prior to authorisation; |
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Claims should be checked to ensure that the correct subsistence rates have been used. |
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Any alterations to claim forms should be countersigned. |
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Claims should not be returned to the claimant after they have been countersigned. |
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Signatures of authorised counter-signatories should be checked before payment is made. |
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Budget holders should be provided with sufficient information to enable them to monitor travel costs against budget. |
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