I was interviewing for a job in accounting and was asked if I did payroll, which of course I had. I got kind of thrown when the interviewer said his problem was basically the person doing the payroll was an “old fashioned hardcore accountant,” and to rigid. Seems they had problems in the past with “ghost payroll” employees.
He asked me what steps you could take to eliminate it, especially if it involved colusion of several employees.
See this is a group of hotels and they submit from their individual hotels to a central office.
I gave the usual answers, make sure proper documentation is in place, no duplicate social security numbers or addresses or duplicate phone numbers. Check to see if the hours worked matches the hotel occupancy needs, have the employees sign their paycards, have random checks.
He didn’t seem satisfied. The problem seemed to be collusion by the part of several managers at each hotel. They would put in a fake employee or part time fake employee all sign off and spit the added wages.
I mean if you are in a corporate office some 500 miles and you have 50 hotels each with about 50 employees seems to me there has to be some kind of trust, because if the managers at these hotels are all in it together to scam the corporate office, what can you do, excpet to have someone from corporate watch over them in person.
Any ideas how to better answer this question? I am sure I didn’t get the job but I would like to know for future reference.
I’m no payroll accountant (just an accounting clerk), and I can’t think of what else you could do. If you can’t trust your hotel managers who are submitting payroll numbers (and all other kinds of invoices for payments), the whole system kind of breaks down right there, doesn’t it?
Check to make sure hotel managers don’t suddenly buy expensive cars? Take too many trips to the Cayman Islands? ???
Collusion is tough to fight against. Separation of duties is one of the key things you look for in an accounting system, so that no one person approves expenses, pays them out, etc. But when you’ve got employees working together to try and buck the system, it can be really tough.
As far as fake employees, with all the buzz going around about illegal immigrants using false documents, and that employers should know, I assume that there is some way to find out if a SSN is legit. Is there? And if so, is that part of your hiring process there?
Perhaps this is obvious, but if it does happen, fire everyone who was involved or who should have known about the problem (meaning, hold managers accountable if they signed off on crap). The HR perspective on various timesheet issues is hold managers accountable for what comes from their people. This kind of fraud can allow the company to terminate for “gross misconduct,” which often means the person is ineligible for unemployment benefits. The company might even have small claims court or criminal prosecution options.
Now, these are not steps that can be taken by the accounting office. But if employees, especially managers, are not facing the consequences for this type of thing, there may not be a whole lot more accounting can do. Managers sufficiently motivated not to lose their jobs over something like this will do the “management by walking around” necessary to make sure it doesn’t happen.
Creating an employee ownership culture through employee stock plans, profit-sharing and such may also reduce the temptation to commit this type of fraud, but that 's a big-picture, long-term approach.
Good luck on your job search. It sounds like you gave a good accounting-based answer to the question.
On the other hand, if you did come up with a solution, it can’t have been a commonsense, instantly available solution, as you did not know it beforehand. So if you did know the answer it’s quite possible they could have implemented the solution but still not hired you
Just a note on interviewers–since other people can answer the specific question. Sometimes interviewers try to not seem satisfied to see how you think on your feet. And sometimes, they try to give you some space to dig yourself a nice hole. So don’t let the fact that an interviewer seems dissatisfied with your first answer inspire you to talk yourself OUT of the job.
Another obvious solution is to use metrics - do some measurement - it takes 50 FTEs to run a 200 room hotel. That’s .25 employees per room or 10 employee hours per room per week. If you are significantly above .25 employees per room, explain the discrepency. Below that and we want to know what is going on (good or bad). You need some secondary metrics in place - customer satifaction, secret shoppers. Reward managers who keep their labor hours down while simulatenously keeping quality high.
With a big enough chain, this should be statistically accurate enough that as long as you don’t punish .26 and reward .24 (or equally stupid insigificant variation) that you should start to see people who can’t manage a hotel worth snot - either through incompetence or fraud.
That is tough, if they are just adding a part-time person it wouldn’t skew the FTEs too much for a large place. Of course, why would they bother with all that when they would only be splitting a part-time employee’s check is another question.
Are these guys using real SSN for these fake employees? You (the corporate office) have to pay taxes for each of these individual employees, so the government should “know” who they are. Is checking the legitimacy of these SSNs part of your “ensure proper documentation is in place” plan?
Also, is the government allowed to tell you (an employer) if your employee is drawing paychecks/paying taxes from somewhere else, or is that some sort of breach of privacy?
-polygraphs for suspected managers – not that it will prove anything, but you might scare some idiots out of doing bad things out of fear they will be caught.
-reviewing security camera footage to verify that a body was doing what the documentation claimed.
-looking at where the checks were ultimately cashed or deposited for clues as to where it acually went.
-hiring investigators to do undercover inspections. Or overt ones – send people out with orders to shake hands with the entire paid staff.
None of these ideas, however, can be implemented reasonably as SOPs. They would be better used to confirm or deny specific instances where a red flag has been raised.
I have to confess, I think I would have said, “Wow, if you guys have this kind of problem with your managers, I really don’t think I want to work for you.”
Requiring direct deposit would not be workable. I’d wager that a sizeable number of hospitality workers do not have their own bank accounts for reasons ranging from not trusting banks, sufficiently lousy banking history (multiple bad checks, overdrafts, etc) so Chex Systems says that they can’t get a checking account, on up to questionable legality of residency.
Would current picture ID go some ways to helping this? Everybody hired needs to get their picture taken for their ID - you need to have a warm body to start with, and if the person that shows up to get their picture taken is a friend of the manager and not a real employee, you have at least complicated their scheme by forcing them to get another person involved.
Why not? It is the only way to get paid through my employer, a large fortune 500 aerospace and commercial airplane company. When the company switched over to the direct deposit only method, they opened savings accounts for those that did not specify a bank and/or account number. Those that don’t like banks can go withdraw all their money each payday.
I had no idea you could open an account on behalf of someone else (except maybe for your child or someone for whom you have power of attorney). It seems odd that the employer could force an employee to handle their own money this way.
I don’t think that they opened the account in the employees name. They facilitated the process. The employer had a deal with a bank that guaranteed that all employees could get an account there despite any past banking problems. I have heard of other companies doing something similar.
Employers can definitely require direct deposit of payroll checks. Sometimes it is a bit controversial to implement it for all employees, but implementing it on a going forward basis for new hires is straightforward. And AFAIK it is not legally controversial, just an employee relations and logistics concern. However, I agree that the hotel employee base is not well suited for mandatory direct deposit. The bigger issue, I think, is that I can’t see how this would stop the payroll fraud, even if it were implemented.
The original suggestion, from racer, was to require direct deposit into an account in the employee’s name only. I’m not sure this would make a difference, but it would be a lot less realistic to implement. It would not go over well to say a spouse can’t be on the account that gets the paycheck deposited, for one thing. Also, I don’t think the bank would tell the employer the names on the account, especially since it would require updating if someone added a name. Furthermore, I’m still not sure this would solve the payroll fraud. If someone can fake the employment paperwork, they can fake the establishment of a savings account.
