PAYROLL AUDIT PROGRAM August 2015 Potential Risks Objectives/Steps Prep. By Date W/P Ref. Effectiveness Of Key User Functions (Payroll Only) Rates and Dates not set up properly. 1. Maintaininig Payroll Data Setup Of Payroll review source documentation for payroll – setups for 20XX (i.e., 26 pay periods, tax rates, payroll policy changes) and compare them to what is in the system. Evaluate the process for uploading new tax rates into the system. (i.e. fed, state, FICA) Document process for Employee pd too much or too little. Payroll Calculations in HRMS System Deductions not accurate Deductions (for example) i.e., taxes fines Benefits – Garnishment of wages Taxes Child Support Club Dues (i.e., Union, Employees Club, etc.…) Commuting Garnishment of Wages United Way All Earnings (for example) Salary Bonuses Select a sample size appropriate for your objectives Use a (25) employee sample from HR audit (or reasonable representation of employee types), and re-calculate their payroll deductions and earnings. Determine that the appropriate forms are in the employee payroll file. (i.e. W-4, etc. …) Pay adjustments not processed completely, Pay Adjustments accurately or on time, resulting in too much or too (including retro adjustments and garnishments) little money deducted from and or added/to Ensure appropriate documentation is on file for pay employee pay checks. adjustments. Determine types of adjustments that can occur. Determine how they ensure that all adjustment transactions Missed opportunities for retroactive deductions. result in the appropriate deductions/reimbursements? How do they ensure they are accurate? Are the adjustments Only one person has control over all adjustments. subject to independent verification?
PAYROLL AUDIT PROGRAM August 2015 Potential Risks Objectives/Steps Prep. By Date W/P Ref. Effectiveness Of Key User Functions (Payroll Only) Rates and Dates not set up properly. 1. Maintaininig Payroll Data Setup Of Payroll – review source documentation for payroll setups for 20XX (i.e., 26 pay periods, tax rates, payroll policy changes) and compare them to what is in the system. Evaluate the process for uploading new tax rates into the system. (i.e. fed, state, FICA) Document process for Employee pd too much or too little. Deductions not accurate i.e., taxes – fines Garnishment of wages Select a sample size appropriate for your objectives Payroll Calculations in HRMS System Deductions (for example) Benefits Taxes Child Support Club Dues (i.e., Union, Employees Club, etc.…) Commuting Garnishment of Wages United Way All Earnings (for example) Salary Bonuses Use a (25) employee sample from HR audit (or reasonable representation of employee types), and re-calculate their payroll deductions and earnings. Determine that the appropriate forms are in the employee payroll file. (i.e. W-4, etc. …) Pay adjustments not processed completely, accurately or on time, resulting in too much or too little money deducted from and or added/to employee pay checks. Missed opportunities for retroactive deductions. Only one person has control over all adjustments. Pay Adjustments (including retro adjustments and garnishments) Ensure appropriate documentation is on file for pay adjustments. Determine types of adjustments that can occur. Determine how they ensure that all adjustment transactions result in the appropriate deductions/reimbursements? How do they ensure they are accurate? Are the adjustments subject to independent verification?