It appears that ghost workers are haunting the payroll offices of a few governments.

 

This month Nigeria removed 23,846 ghost workers from its payroll, which is expected to save the economy more than $11 million a year. Tanzania experienced a similar event last year when an audit revealed that the public sector payroll office had paid 141.4 billion Tanzanian shillings—or $76.6 million—to fake workers over a period of one year. And then there was the incident in Manilla, Philippines where a physical audit of employees along with collection of biometric information was conducted to ensure only the ones in this realm were getting paid.

 

Finding non-existent employees from a large payroll pool can be a challenge, especially when you’re responsible for thousands of employees scattered across multiple locations. Rotating short-term and temporary staff also add to the complexities of running a payroll department.

 

According to a presentation at a recent ACUA conference, data analytics can play a crucial role in identifying terminated, fictitious and pre-employment ghost employees. It can also be used to identify unauthorized payroll adjustments or overtime reporting fraud.

 

Other fraud risks and red flags associated with payroll that can be identified with data analytics tools include:

 

• Duplicate payroll checks
• Tax and/or deductions not removed from an employee’s paycheque
• Identify payments to terminated employees
• Paycheques remitted to the same account as a vendor
• Time-card and payroll data mismatches
• False, invalid or duplicate Social Insurance Number, Social Security number, National Identification Number or equivalent
• Duplicate direct deposit numbers
• Duplicate home addresses
• P.O. box addresses
• Wage level, sick leave and vacation

 

Data analytics can also be used for tests to audit payroll for operational efficiencies. These include identifying:

 

• Changes in exemptions, gross pay, hourly rates, salary amounts, etc.
• Excessive overtime in a department or by an employee
• Exempt employees receiving overtime
• Permanent employees with no increases
• Discrepancies between union agreements and institutional policies

 

Are you concerned about ghost employees or the ability to audit your payroll data? Take a look at some of the ways that Caseware IDEA Data Analysis software can be used for your payroll monitoring.

 

 

About Alain Soublière:

Alain Soublière has many years of experience working with computer audit software. He worked in a senior management role as the IDEA Product Manager for many years before becoming Director of Product strategy for Caseware Analytics and more recently the Chief Product Strategist.   

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