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Payroll - Coggle Diagram
Payroll
Human Resources Function
Risks within the function
-Unsatisfactory or unnecessary employees may be recruited,
-Dismissal of employees for which the correct procedures are not followed,
-Employee details may be fraudulently amended to include fictitious employees or to change pay rates.
Staff that are not necessarily needed but retained because of inefficiencies in the human resource department,
Hiring and termination controls:
Separate human resources department to ensure segregation of duties.
Formal interview process to ensure that individuals with the necessary requirements are hired. Ensure background checks are performed before an employee is hired.
Letter with terms of employment which states terms of employment and remuneration.
Authorization of all new hires and any changes to existing employees' contracts.
Changes in employee information:
Permanent records of employees should include:
-particulars of engagement and termination of services
-authorized rates of payment and changes
-authorized holidays and leave days
-name and address of the employee
-identity number of employee
-income tax reference number
Pre-numbered change forms should be authorized by HR manager.
Timekeeping Function
Risks withing the function
Fellow employees can clock in for absent employees, resulting in recording of invalid hours,
Clock cards can be made and clocked for fictitious employees, facilitating the payment of wages to fictitious employees,
Errors could be made by the payroll department in calculating collecting information in the clock cards.
Controls to mitigate risks:
Clock cards should be:
numerically accounted for, issued by the personnel department and prepared from personal records, stored at clock machine under supervision.
Entry and exit point to work area should
:
be limited to one access point, protected by a turnstyle type mechanism, be supervised during clocking periods.
Clock procedures:
clocking machines should be situated at the exit or entrance to ensure employees do not leave the premises without clocking in or out, there should be supervision over clocking of employees.
Foreman:
should keep a record of present employees and time worked, should sign clock cards as evidence of approval of hours worked by employees, his/her clock card should be approved by a senior official.
Overtime:
should be authorized according to company policy, foreman's overtime should be authorized by senior official.