Internal control#1: Split duties between the person doing the monthly processing and the person doing the salary payments
If someone can adjust the salaries to benefit themselves, or pay incorrect amounts into their personal bank accounts and commit fraud, you
then have an internal weakness.
You should split the payroll function and payment function in two, and ensure that these two people don't work together to commit fraud.
Internal control#2: Bring about processes for change and adjustment to payroll systems
It's important to note that every change leaves a paper trail, so save all changes electronically on your hard drive as well as your backup drive.
Also, introduce templates to use for any changes to the payroll system.
Internal control#3: Implement checks and cross-checks to ensure the calculations are done correctly
Review and sign off the staff variance report which shows the variances between staff members from month to month.
Most payroll systems have reports you can print and check on a monthly basis. Do this for every month starting now.
Internal control#4: Reconcile actual bank account payments to the payroll system on a monthly basis
Always do a salary account reconciliation. To do this, check your control against what you've paid out.
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