Almost inevitably, a new year brings new goals. We check the status of current goals and jot reminders to work toward others at a later date. As public sector administrators draft that goal list, consider including one to review your organization’s internal payroll and timekeeping controls. While we would like to trust our coworkers, the reality is the public sector is second only to the banking and financial services industry for the likelihood of fraud to take place. Further, more than 50 percent of employees who conduct fraud have more than five years’ tenure with the organization.1 Implementing or updating payroll and timekeeping controls are a low-to-no cost way to reduce your organization’s exposure to fraud.
Managers are one of the best resources to mitigate timesheet fraud since they have the closest interaction with employees. While everyone is meeting to discuss rule change implications for your organization, utilize the time to reaffirm the need for timekeeping internal controls and highlight the associated risks if not met.
In addition to the front-line process improvements managers can implement, public sector organizations should take a high-level look at their system processes or create additional checks to make payroll and timekeeping controls more consistent.
Now is also a good time to contact your payroll and timekeeping vendor to confirm you fully utilize the time entry module’s functions. Some of the controls or reports mentioned above may be built into the system’s capabilities. If you track time in a separate system, such as Excel or another spreadsheet application, you may increase controls by changing your processes. For example, instead of using a paper system, employees can directly enter time into an Excel spreadsheet that managers can review, lock and send the spreadsheets directly to payroll. The re-worked process can increase your control over approvals with the additional benefit of reducing data entry redundancy and errors.
A review of your payroll and timekeeping controls requires a small amount of time and likely no cost, yet it can help protect your organization from serious financial and public relations damage. Add it to your new year’s goals list and start it soon. It’s an easy one with which to begin and quickly check off your list — and that always feels great.
For more information on this topic, or to learn how Baker Tilly's state and local government consulting practice can help, contact our team.
1 Association of Certified Fraud Examiners, Report to the Nations on Occupational Fraud and Abuse, 2016 Global Fraud Study.