8/27/2020

Mitigating Internal Payroll Fraud

August 27th, 2020

Christine Stolpe

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Today’s Speaker

Christine Stolpe
Passionate about furthering an understanding of payroll, Christine Stolpe, CPP has been working
in some fashion of payroll for the past 25+ years and enjoys watching the profession blossom
through emotional intelligence and personal fortitude. She recently launched her own payroll
consulting business, Wages Creek.
A member of the American Payroll Association since 2011, she serves on the Social Networking
Committee, GRTF-SALT Sub-Committee and Certification Item Development Task Force. In the
past, she has served on the Board of Directors for the California Payroll Conference (CPC) and
Silicon Valley Chapter (SVAPA) as well as serving a two-year term on the Board of Advisors
representing Region 4 to National APA. Christine was also one of the first fifty individuals to earn
the APA’s Global Payroll Management Certification in the September 2011.
Through furthering her own education and skill sets by attending educational offerings, Christine
has developed a ravenous appetite for helping others. She has developed training for other
payroll professionals, volunteered for National Money Matters Day during National Payroll Week,
and she now looks forward to continuing to grow her network of professional resources,
colleagues and friends.

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PAYROLL FRAUD
PREVENTION

Christine
Stolpe CPP
Global Payroll Strategist
Owner, Wages Creek
christine@wagescreek.com

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Agenda
• The Fraud Triangle
• Identifying Risk
• Compliance
• Educating others
• Best practices
• Open for questions

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Motive

Opportunity

Rationalization

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Identifying Risk
• Where is payroll done?
• Who does what?
• Who has access?
• To what information?
• How are reconciliations done?
• How is funding set-up?

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Step 1 Step 1

Identify areas

Step 2 Step 2

where fraudulent

Step 3 Step 3

payroll activities

Step 4 Step 4

could occur

Step 5 Step 5

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NEW HIRES TIMECARDS PAYROLL INPUT PREVIEW RECONCILIATION

APPROVAL

… How many times is the data touched, edited or reformatted?

… Who has access to data, and what information to they have access to?
… What is the review process? Is there a secondary audit? How many levels of approvals are there?
… How are the reconciliations done? Who is doing the reconciliation? What is it reconciled against?
… Which teams are involved in funding? Who provides Treasury approval?

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Compliance
• Checklists for all processes

• Narratives & SOX Controls

• Internal Audits

• External Audits

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Audit Preparedness
• Payroll process flow chart
• Identification
• Mitigation

• Checklists, Narratives and Controls

• Develop from flow chart
• Review/approve at regular cadence

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Educating Others

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Create competencies at varying levels

Not to be used for anything other than a training assessment
Only use for performance IF lack of professional growth or development exists
Should not be tied to compensation, but okay to monetarily incentivize (taxable)

Make sure all team members understand the “WHY”

Who, what, when & how are covered by competencies
WHY is most important in fraud prevention

Involve the team in audit preparation as well as the results

Creates ownership and accountability
Provides hands-on cross-training in real-time
Also helps with refortification of the WHY

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Best Practices

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To Prevent Against Fraud

• Checklists & Cross-training • Discriminating

• Support for all entries
• Practice audits
• Narrative reviews
• Automate as much as possible
• System Users & Access
• Write-off variances
• Single point of control
• Gloss over audits
• Ignore warning signs
• Assuming anything

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Case Study
The Payroll Accountant transposes the rates on the
“employee with children and family” plans which causes the
payroll system to over-withhold $1242 per month.

The company is set-up with the benefit vendor to have

payments “pushed” via ACH.

The Payroll Accountant is responsible for setting up the ACH

to the benefit vendor.

The ACH debit is set up as a split with the correct amount

going to the benefit vendor and the $1242 overage being
sent to a personal account.

The personal account belongs to the Payroll Accountant.

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Employee Fraud
• The benefit plan proposal is sent directly to management for approval with
overall totals, annual cost differences in $ & % of change.
• Company sent a letter to announce the increase in the cost of the health
benefit plan to employees. The letter from management does not include
amounts or percentage of increase.
• Company pays 100% of the employee rate with employees paying the
difference for the employee plus plans.
• The accountant uploads the new rates into the system.
• Accountant sends out notices to all employees listing their per pay share of the
cost for the pre-tax medical/dental plan.
• Accountant provides the payroll department a spreadsheet breakdown of
employer/employee contributions for the plan and a copy of the notice sent to
the employees.
• Payroll sends the general journal entry to accounting to import into the
accounting system.
• Accountant disburses payments.
• Accountant provides monthly financial reports to management.
• At year-end, the Accountant and payroll team connect to reconcile values for
each system.

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Con… Scam… Cheat...

Regardless what you call it,

all companies are vulnerable to
payroll fraud.

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Christine Stolpe CPP

christine@wagescreek.com

Thank You!

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Questions?

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How Ascentis Payroll Can Help

Ascentis aims to be our clients HCM partner and provide relevant

information organizations need to be thinking about in order to ensure their
own processes remain current and give our users the power to be the
leaders in their organizations.
Recruiting &
With Ascentis Payroll You Can: Onboarding

• Systematically manage the different sick pay classifications Time & Talent
discussed on behalf our customers Attendance
Ascentis Management

• Perform the filing and deposits of the tax with each pay period
• Correctly classify and report all values for both the 941 quarterly &
annual deadlines
• Correctly classify, report, and distribute data on form W2 Payroll HR &
Benefits

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Contact Us

info@ascentis.com
www.ascentis.com
800.229.2713

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