Acme employs over 40,000 workers for three shifts, and most employees work overt

Question

Acme employs over 40,000 workers for three shifts, and most employees work overtime when necessary. Additional information about payroll procedures follows:

• Employees record time worked on time cards. Every Tuesday morning the previous week’s time cards are collected from a bin next to the time clock, and new time cards are left for employees to use. The payroll department manager reviews the time cards to ensure that hours are correctly totaled; the system automatically determines if overtime has been worked or a shift differential is required.

• The payroll department manager performs all the other activities necessary to ensure accurate and timely delivery of payroll. The payroll department manager who does not believe in taking vacation has received numerous awards for perfect attendance over a twelve year employee tenure.

•The system automatically assigns a sequential number to each payroll check. The checks are stored in a box next to the printer for easy access. After the checks are printed, the payroll department manager uses an automatic check-signing machine to sign the checks. The signature plate is kept locked in a safe. After the checks have been signed, the payroll manager distributes the paychecks to all first-shift employees. Paychecks for the other two shifts are given to the shift supervisor for distribution.

• The payroll master file is backed up bi-weekly, after payroll processing is finished. The back-up process is reviewed and approved by the payroll department manager.

REQUIRED: for each bull it point, identify and describe the weaknesses in Acme Enterprises’ payroll process. labol each bull it point

Explanation / Answer

• Employees record time worked on time cards. Every Tuesday morning the previous week’s time cards are collected from a bin next to the time clock, and new time cards are left for employees to use. The payroll department manager reviews the time cards to ensure that hours are correctly totaled; the system automatically determines if overtime has been worked or a shift differential is required.

A time card is manually populated and hence there is no assurance that the employee is actually recording the accurate hours worked by him/her. Without any foolproof mechanism such as a biometric attendance system, an employee could actually be absent for a day, record incorrect hours falsely and drop it in the box before next Tuesday and there is no way this can prevented in this system

• The payroll department manager performs all the other activities necessary to ensure accurate and timely delivery of payroll. The payroll department manager who does not believe in taking vacation has received numerous awards for perfect attendance over a twelve year employee tenure.

All payroll activities are performed by a single person- payroll department manager which results in key man dependency. In case he is on leave for some reason or he leaves the company, there is no one else who can substitute or perform the same tasks.

•The system automatically assigns a sequential number to each payroll check. The checks are stored in a box next to the printer for easy access. After the checks are printed, the payroll department manager uses an automatic check-signing machine to sign the checks. The signature plate is kept locked in a safe. After the checks have been signed, the payroll manager distributes the paychecks to all first-shift employees. Paychecks for the other two shifts are given to the shift supervisor for distribution.

The payroll department manager has no oversight on his activities- since he controls the check printing and signing process there could be a scenario where he commits fraud.

• The payroll master file is backed up bi-weekly, after payroll processing is finished. The back-up process is reviewed and approved by the payroll department manager.

The backup process should be weekly- same as the payment frequency so as to avoid any changes in the intermediate. Also there should be some oversight on the roles and responsibilities performed by the payroll department manager

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.