Prevent Payroll Fraud

17 Dec

A response to “Fraudulent Timesheets”

From random screenings to full-blown audits, here are some of the best and most common ways of preventing errors or deliberate fraud.

  • Aggregate data to identify patterns like former employees showing on the current payroll, duplicate entries, abnormal payment amounts, abnormal hours worked, etc.
  • Keep an eye checks not cashed
  • Run unexpected handout of checks and request personnel to pick them up in person and with a valid ID
  • Investigate payment records without deductions
  • Keep an ongoing schedule of random calls to parents to verify service performed (for those companies that capture signatures to comply with Regional Center requirements)
  • Create a procedure for auditing the full payroll cycle one process at the time.

For instance, the first month audit timesheet submission, the second month audit the data entry, etc.

When these steps are performed, companies attain clarity on what are the weak spots of their particular payroll and can take action. Sometimes ongoing screening suffices, yet at times a full investigation is best.

In summary, no business is exempt of employee fraud, and is the fiduciary responsibility of the company to prevent fraud.

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