PROTECTING YOUR COMPANY FROM PAYROLL FRAUD
Has an employee ever reported they received an unexpected direct deposit, or have you ever seen changes to your payroll that you did not perform? These are examples of possible attempts to commit payroll fraud.
Payroll fraud is when someone embezzles funds from a business utilizing the organization’s payroll system. There are several methods wherein people can steal funds they are not entitled to, including issuing unauthorized bonuses and paying fictitious or terminated employees.
TIPS TO HELP AVOID PAYROLL FRAUD:
- Reconcile the number of pays per cycle to the number of active employees you have.
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Regularly inspect your personnel report for every payroll and payroll preview. Review the following:
- New hires
- Bank account changes, especially the same bank account added to multiple employees
- Pay rate changes
- Address changes, especially to an area where you do not have many other employees
- Regularly run a report to identify employees who split direct deposit payments into multiple accounts and investigate changes to ensure validity.
- Generate a regular access control report for all client administrator and practitioner roles. Review it for accuracy and ensure their contact information is valid.
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Carefully manage ADP self-service registration:
- Restrict your company registration code to those who need to know it and establish a process for its secure distribution.
- Use back-end validation for self-service registration.
- Contact ADP about a higher-level security method of using personal registration codes and other secure registration options that may be available.
For additional guidance on protecting your company from payroll fraud, review payroll management best practices.
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