How automated payroll can stop corruption
Payrolls can be an attractive target for corruption in an organisation but they can also be a useful detection tool. As they generate an auditable record of all transactions, automated payroll systems can be used to identify unusual or irregular payments that could indicate corrupt activity. The knowledge that these records are reviewed regularly will deter some potential perpetrators.
Automated systems can also act as barriers to corrupt conduct if they incorporate controls that reflect the organization's delegation levels such as permitting only those with authority to approve leave, overtime and other payroll exceptions.
So automated payrolls can help manage corruption risks, however, because electronic information can be easily disseminated and manipulated payroll systems also need the same kinds of security and controls to address the risks inherent in any electronic information system. Outsourcing specialists like rivor have these built in.
As with any other outsourcing decision the risks to of having an outsourced payroll function should be assessed beforehand. The risks lie mainly in the need to maintain the security of information transferred to the outsourced provider.
Beyond this, outsourcing can also be a useful prevention mechanism in situations where it is important to reinforce the separation of payroll functions from the rest of the organisation. This might be necessary in situations when pressure is put on payroll staff by operational or line staff to act improperly.