Can direct Supervisors audit and change payroll data? 1317

  • Hello,
    My company has recently downsized the scheduling/payroll department down to one person. One person is not sufficient in my opinion.
    Anyway, our employees have a nasty habit of punching in too early, too late, not at all, or punch in 3 times in a row then not out… well, you get the idea.
    We have a web-based clock in/out system.
    In the past, one of the payroll clerks reviewed and corrected this data on a daily basis. In a company of 400 employees, this was practically a full time job.
    It has been decided that this payroll function should now fall onto the employees’ direct supervisor.
    That just doesn’t seem right to me. There will be a lack of consistency as there are 17 Supervisors that will be responsible. Second, these employees have a direct reporting relationship with those supervisors.
    This just does not feel right, but I can find no solid proof that it is wrong to present to the Company.
    Can anyone point me in the right direction, or tell me I am wrong?

  • In a manual time-card system, supervisors could make adjustments prior to forwarding the time cards to payroll for processing. Why shouldn’t they be able to make similar changes to a web-based time-card? The system should also have some sort of audit trail to show what the employee recorded as hours worked and what corrections were made by the supervisor.
    Good payroll controls would require some review of payroll information both on the front end to ensure that initial information is accurate and on the back end to ensure that information was processed correctly. I assume that these managers have cost center G-and-A accountability, so not properly reviewing and correcting the time cards could negatively impact their G-and-A.
    I think that it is good to push this out to the supervisors. If they have to deal with sloppy timekeeping by their direct reports, they will be more incented to do something to clean it up so that they don’t need to spend as much time reviewing.

  • And another point is…
    1 person previously changing the timecards for 400 people,
    now 17 persons are responsible for 20-30 people each.
    How can that one person be certain that what he/she is correcting is actually the truth? The way I see it, you have a better control now, than what you did earlier.

  • In addition to the feedback provided by earlier posts, the following might be helpful:
    Persons responsible for the distribution of payroll checks should have no other personnel or payroll responsibilities and should not approve labor hours or time cards.
    Proper segregation of duties should exist between:

    • payroll distribution,
    • authorization and
    • processing functions.
      Risk: Funds may be misappropriated as improper changes/additions could be made to the master file or incorrect hours may be submitted for payment. Also, distribution may be made to unauthorized employees and remain undetected.
      Example Time Card Policy:
      Example Time Card Adjustments Procedure:
      Adjustments to time. Where missed punches or other errors have been made by employees, Managers adjust recorded time. Approved support will be retained by the Manager for the current and three prior calendar years.
      For time card-only employees, adjustments must be supported by printed documentation signed by the employee approving the change. Where Managers feel it is warranted, they may also have the work supervisor or financial manager of the cost center approve the supporting document.
      Hope this helps,

  • Milan,
    You need to add the fourth segregation:
    Master File Maintenance.
    Normally status changes are input by the HR and frozen. The second eye check is done by the payroll coordinator (processor) to make sure authorized rates have gone through.
    Human resource can distribute the check churned out by the payroll coordinator.
    To further strengthen the control, the authorizer can review the status changes report quarterly to make to mitigate collusion between the HR and the Payroll Coordinator.

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