solution

When staff arrive, they collect a paper daily timesheet from a tray outside the pack house managers office. Short term staff record the time they arrived and the time they finished for the day, as well as any unpaid breaks taken during the day on the daily timesheet.

When staff leave, they are required to hand the daily timesheet to the Pack House Manager. The employee is required to sign the timesheet to indicate it is an honest record of the hours worked and to confirm they were at work that day – this prevents staff submitting a timesheet for someone else. The paper timesheets are filed in a temporary file in the Pack House Manager’s office.

On Monday each week, the wages administrator collates the daily timesheets, calculates the total hours worked by each staff member for the previous week and completes the calculation of each employee’s pay. Payroll software is used to complete the calculations and electronically records details of hours worked, pay rate, total gross pay, PAYE deductions, any other deductions including KiwiSaver, and the net pay for each employee.

Once calculations are completed two copies of the wages list is printed and is given to the HR manager who reviews the planned payments and approves the payments and returns the approved wages list to the Wages Administrator. The Wages Administrator files the approved wages lists, completing Inland Revenue Pay Day Filing processes. The Wages Administrator then exports the wages list to the online banking system to set up the wage payments in the online banking system and authorises the payments in the online banking system. All staff are then emailed a payslip. The CEO logs on to the online banking system and authorises the wage payments. The approved wages list is then filed with the original copy of the wages list.

Each Wednesday the wages administrator reviews the wages payments made and lists any differences or errors on an exception report which is filed with the Approved Wages list.

Note: SPL’s online banking system is set up to require payments to be authorised by two signatories before being processed.

Task:

Using the narrative description, evaluate Southern Packing Ltd’s (SPL) Payroll and human resources subsystem. In your evaluation you must:

1. Identify five deficiencies in SPL’s Payroll and human resources subsystem. Ensure you explain the potential impact of each deficiency identified.

2. For each deficiency, you identified in Task 1, suggest a control to mitigate the weakness. Ensure you explain how the control mitigates the weakness.