Paying people.
WHAT THE RISKS ARE
Employees on the payroll who do not exist Employees who have left still being paid Hours or overtime overstated Rates altered without authority Deductions not remitted Payments to incorrect accounts
WHY GHOST EMPLOYEES DESERVE ATTENTION
They are a classic and persistent fraud, particularly where payroll is administered by one person.
WHAT CONTROLS ADDRESS IT
Authorisation for every addition to the payroll Independent verification that new employees exist Prompt removal of leavers Review of the payroll listing by someone who knows the workforce Payment to verified accounts
WHY REVIEW BY SOMEONE WHO KNOWS THE PEOPLE
It is the control that detects names nobody recognises.
WHAT TO ESTABLISH
That the person approving the payroll is not the person who maintains it.
WHAT TO REVIEW EACH PERIOD
Total against the previous period, with variances explained New starters and leavers Changes to rates or bank details Unusual overtime or allowances
WHY VARIANCE REVIEW
Unexplained movement is the indicator.
WHAT TO WATCH FOR
Two employees with the same bank account Employees with no identification on file Accounts changed shortly before payment
WHAT TO ESTABLISH ABOUT DEDUCTIONS
That amounts deducted are actually remitted.
WHY IT MATTERS ACUTELY
Unremitted statutory deductions carry personal liability and they accumulate silently.
WHAT TO RECONCILE
Deductions made against remittances paid, every period.
WHAT TO ESTABLISH ABOUT LEAVERS
Removal from payroll and systems on the last day.
WHAT TO RECORD
Authorisation for every change.
