Payroll Auditing

•SOLUTION

Alternative Auditing Approaches to Tumultuous Thursday’s Chaos

Audit evaluation must begin with clear definition of the work to be audited

Visit our website for other items of interest

www.sru.edu/payroll

Margie Riddell, Payroll Manager

This presentation addresses auditing approaches to biweekly payroll processing in an effort to stimulate thinking about how universities can address internal auditing issues

•SOLUTION

What is Payroll Audit?

Payroll audit is a formal process used to establish internal controls of your payroll

Why Review Best Practices?

Discover how to simplify and improve the payroll audit review process

Visit our website for other items of interest: www.sru.edu/payroll

Payroll Best Practices

For people who pay people

Payroll Auditing

•Best Practice

Are the proper tools in place?

Wage Type Reporter for pre and post audits

Cost Distribution Report for post audits

Why Review Best Practices?

To consistently account for all payroll expenses and ensure payments are properly allocated

Techniques for reducing the workload and error rate of the HR/Payroll staff

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Reporter

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Additional Pay Report

Supplemental pay

The Additional Pay Report is used to audit any payment beyond regular earnings.

For example, department chair pay, sabbatical pay, out of class pay, summer school payments, dual compensation, overload, individualized instruction, independent study, etc.

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Additional Payments Report•Identify supplemental payments•Organize payments by category•Quick reference for additional pay•Reduces errors during trial payroll

Payroll Auditing

•Best Practice

Outstanding Claims Report

Identify all claims

Report used to audit and identify any outstanding claims owed to university.

For example, the Art Department secretary falls and breaks a bone but the HR/Payroll Office doesn’t get the injury call until 3 weeks after the fact.

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Outstanding Claims Report•Identify outstanding claims•Organize by category•Quick reference guide•Reduces errors during trial payroll

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Deferred Holiday/Comp

Leave Used Report

Identify used deferred holiday &

comp leave

Used to Audit deferred holidays & compensatory leave being taken and paid in a current pay period

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Deferred Holiday/Comp Leave Used Report

•Identify deferred holiday and compensatory leave payments•Organize payments by category•Quick reference for leave usage•Reduces errors during trial payroll

Payroll Auditing

•Best Practice

Leave Payout & Leave

Without Pay Reports

Identify specific leave payments

Leave Payout Report:

Audit leave being paid out in the current period; comp, sick, annual, etc.

Leave Without Pay:

Audit any employee not receiving pay

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Leave Payout Report Leave Without Pay Report

Audit any employee not receiving payOrganize payments by categoryQuick referenceReduces errors during trial payroll

Payroll Auditing

•Best Practice

Miscellaneous Pay Report

Identify misc. pay

Audit all miscellaneous transactions with positive or negative results to an employee's pay.

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type ResultsMiscellaneous Report

Audit any employee receiving miscellaneous pay

Quick reference

Reduces errors during trial payroll

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Net Compare Report

Audit for major percentage changes in regular pay

The Net Compare Report created by Dave Kleman, compares current net pay to previous net pay in order to check any major changes from one period to another

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Net Compare Report

Identify huge payment changes

Identify zero payments

Quick reference for CC changes

Reduces errors during trial payroll

Payroll Auditing

•Best Practice

RetroactivityReport

Identifies prior period(s) payments and deductions

The Retroactivity Report calls attention to any payments or deductions occurring from a previous period, paying in the current period

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Retroactivity Report

•Identify payments from other periods

•Quick reference for retro pay

•Alter to review Payroll Journal

•Reduces errors during trial payroll

Payroll Auditing

•Best Practice

GarnishmentReport

Identify wage attachments

The Garnishment Report identifies all employees with wage attachments

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Garnishment Report

•Identify wage attachments

•Organize payments by category

•Quick reference for IRS levy, etc.

Payroll Auditing

•Best Practice

Overtime Report

Identify overtimeControl overtimeAudit overtime

The Overtime Report is used to audit all overtime situations.

V.P.’s receive a copy of the Overtime Report reflecting the overtime earnings paid within their specific areas

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Overtime Payments Report

Identify overtime

Organize payments by category or EE

Quick reference for overtime pay

Reduces errors during trial payroll

Payroll Auditing

•Best Practice

Wage Report

Audit hours work for temporary employees

The Wage Report is used to audit the hourly wage payroll

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

Wage Type Results

Wage - Hourly Report

Identify hourly payments

Audit temporary employees

Quick reference for hourly

Reduces errors during trial payroll

Payroll Auditing

•Best Practice

De-Centralization

Leave & Overtime

Individual timekeepers in all University Departments enter leave, overtime and hours for wage employees into SAP’s CAT.

Each pay period timekeepers submit leave slips to HR where they are audited using the CADO Report. Overtime and Wage Timesheets are submitted to PAYROLL where the Wage Type Reporter is used to audit and check all overtime situations

Payroll Auditing

Payroll Best Practices - For people who pay people

•Best Practice

De-Centralization

Leave & Overtime

The process provides at least a two part check for accuracy.

Timekeepers check their own work while the staff in HR/PAYROLL provide a double check for all entries.

This is where the Wage Type Reporter supplies valuable, easy to audit information.

Payroll Auditing

Payroll Best Practices - For people who pay people

Audit Process

Reports in an hour or less . . .