HR / Payroll Cycle

1
HR / Payroll Cycle

• ATG 383 - Spring 2002

2
Overview

• Operation of Payroll System
• Risks and Controls for Payroll System
• Accounting for Human Resources

3
Simplified Payroll System
4
Payroll Inputs for Process 1.0

• Employees
• Various agencies
• HRM
• Why are some payroll related functions located in
  HRM department?

5
Payroll Inputs for Process 2.0

• Revenue Cycle
• Various Departments or Employees
• Who is responsible for reviewing and editing
  payroll input?

6
Payroll Outputs for Process 4.0

• Bank
• Special Payroll Account
• Employees
• How to disburse funds?
• G.L. System

7
Payroll Outputs for Process 5.0

• G.L. System
• Various Agencies

8
Not shown on DFD Still part of payroll process

• Answer inquiries about payroll
• Issue reports on payroll activities
• Internal use management and cost accounting
• External use employees and government
• Independent reconciliation of payroll account.

9
Payroll Cycle Risks and Threats
10
Threats Primarily Addressed by HRM

• Hiring unqualified employees
• Violation of employment law
• Inappropriate incentive compensation

11
Threats the Payroll System Can Address

• Unauthorized changes to payroll master file
• Inaccurate time data
• What if employee X clocks in for employee Y?

12
Threats the Payroll System Can Address

• Inaccurate payroll processing
• Theft or fraudulent distribution of paychecks

13
Threats the Payroll System Can Address

• Loss or unauthorized disclosure of data

14
Outsourcing Payroll Processing

• Many companies use an outside service bureau for
  payroll
• Benefits?
• Risks?

15
Accounting for Human Resources
16
Example of HRM SystemSource http//www.harmony-s
olutions.com.au/overview2.htm
17
Core HRM System

• Biographical data
• Name, address, employee id.
• Service history.
• Competencies.
• Establishment (Position) Data
• Position title.
• Requirements.
• Position occupancy
• History

18
Recruitment Module

• Administer advertising of vacant positions
• Generate advices to applicants
• Archive unsuccessful applicant records
• Administer EEO incident claims

19
Competency Management

• Assemble and analyze corporate training needs
• Identify corporate and individuals' skills
  deficits
• Match competencies to position, project, and
  workforce requirements
• Identify training strategies which impact on
  employee performance

20
Performance Appraisal

• Administer employee performance plans and
  appraisals
• Ensure that performance appraisals and plans are
  conducted on schedule
• Record performance assessments and decisions
  concerning employee performance
• Record employee comments concerning their
  performance assessments