Payroll or HR cycle

Question 1

1. PERSONNEL
   Unauthorised appointments/ dismissals

Fictitious Employees included

Unauthorised wage rates/ salaries

Unauthorised deductions/ benefits

Unauthorised changes

Not all changes included

Answer 1

Contracts, filed with supporting docs (went through process) in a personnel file, recon

For certain positions, what the authorised wage rate list. Any amendments, payroll amendment form. Kept up to date.

Or if personal rate/salary changes, amend contract.

Employee complaints book, investigate and follow up on.

Termination of service form.Compliance issues, CCMA, unfair dismissal, warnings, verbal and written warnings, Disciplinary hearings, signed dismissal by appropriate management.

Dismissal policies, website, induction and training. All aware

Log of Masterfile amendments and reconcile to amendment forms.

Question 2

2.TIMEKEEPING
Employees paid for hours not worked

Clock cards for fictitious employees

Normal and overtime hours calculated incorrectly

Answer 2

Biometric scanner. Swipe card OR Automatic calculate normal and overtime hours.

Manual timesheet – register. Admin clerk compiles from employee listing. Prepares time cards and employees sign register. End of week, return it. And sign register. Clerk reconciles number of clock cards to register and calculates total hours. And splits between overtime and normal.

Supervisor should review and authorise clock cards for hours actually worked.

Any changes should be authorised by manager.

Question 3

3. CALCULATING & PREPARING PAYROLL
   Dismissed/ fictitious employees paid

Salaries and wages incorrectly calculated (hours x rate)

Unauthorised/ inaccurate deductions or benefits

What about not all employees included?

Answer 3

Payroll clerk compare clock cards received to updated employee register and sign as proof of receiving clock cards

Updated list of employee names, appoved normal and overtime tariffs and deductions

Question 4

4. PAYMENT PREP & PAYOUT
   Unauthorised/ incorrect wage amount included in pay run

Cash could be stolen

Cash placed in wage envelopes is wrong amount

Incorrect payslip prepared

Wages paid to non-employees

Unpaid wages stolen

Answer 4

Cash and envelopes locked away in a safe and only authorised personnel should have the key.

Count number of envelopes and reconcile with payroll listing.

2 people present at handing out. And both sign.

When collecting, ID himself, count money and sign list of employees.

Unclaimed wages recorded in unclaimed wages register. Reconciled with number of employees who have not signed with number of enveloped uncollected.

Person who authorises payroll and person who executes payment not the same.

Someone else load it into the EFT payment system.

Before executing the payment, perform a review of: payment schedule and supporting documentation: payroll listing for unusual items.

Review recon of payroll listing and employee register. To ensure no fictitious or terminated staff.

Only authorised signatories; Financial director or FM only ones allowed to execute payment runs.

Sign the payment schedule after executed and stamp it as paid. To avoid duplicate payment.

Question 5

5. RECORDING (RISKS)

Salaries / Wages expense recorded at inaccurate amount

Answer 5

CONTROL OBJECTIVES (VALIDITY)
Wages paid are in respect of actual work done by company employees. 

The gross wages are calculated in accordance with company policy using the authorised rate of pay and number of hours worked.

The rates of pay are in terms of applicable legislation.

The deductions are in terms of applicable labour legislation and personnel deductions authorised by employees.

Question 6

5. RECORDING (RISKS)

Recording in the incorrect period

Answer 6

CONTROL OBJECTIVES (ACCURACY)
The net wages are calculated using the correct rate of pay and number of hours worked and subtracting the correct deductions.

The payroll is correctly classified, summarised and posted to the journals and general ledger accounts.

Question 7

5. RECORDING (RISKS)

Not recording all the salaries/wages expense

Answer 7

CONTROL OBJECTIVES (COMPLETENESS)
All payroll costs should be accounted for and recorded.

All payroll costs should be accounted for in the correct accounting period.

All unclaimed wages are recorded correctly and subsequently paid to employees who worked but were unable to claim their wages. (Valid, Accurate & Complete)