FDPP 1226 Denise Brown

Topics: Auditing, Audit, Financial audit Pages: 12 (2756 words) Published: August 14, 2015


Denise Brown M02076442
Gillian Clarke
Foundation Degree in Payroll Management (September 2014)
FDPP 1226 Provision of Effective and Efficient Administration 9Th February 2015

Contents Page

Introduction3
Main Report3
Pay Methods and Procedures3
Appropriateness of methods and procedures against
Audit requirements5
Design and distribution of payroll outputs7
Application of quality standards to the payroll function8
Conclusion10
Recommendations10
References12

Introduction
The purpose of this report is to discuss the effectiveness of the internal procedures used to administrate the payroll function and provide information to other stakeholders within the payroll team at EC Harris. EC Harris has recently acquired three companies which have led to the payroll numbers increasing and changes to the procedures and reports produced.

The report will go on to assess the pay methods and procedures, the appropriateness of methods and procedures against audit requirements, design and distribution of payroll reports and the application of quality standards to the payroll function. This will be based within the payroll team within EC Harris. “EC Harris is the leading global natural and built asset design and consultancy firm, helping clients make the most of their investment and expenditure in built assets” (E C Harris LLP, 2014). The payroll team is based within the financial processing team, the payroll team comprises of two payroll specialists, a senior payroll specialist and they sit under the financial processing managing.

Main Report
Pay Methods and Procedures
The main aim of any payroll department but particularly the payroll department within EC Harris is to pay employees accurately and on time. The contract of employment for an employee states their pay method and this must be provided to the employee within two months of their start date. The contract of employment was not always what governed pay method. The Trucks Acts 1831-1940, supplemented by the Payment of Wages Act 1960, “gave all manual workers the right to insist on wages being paid in cash” (Worcester College of Technology, no date). However, the Wages Act 1986 moved towards cashless payments and was then consolidated into the Employment Rights Act 1996.

There are many types of pay methods including cash, cheques, automated credit transfers otherwise known as BACS, faster payments, CHAPS and international payments. Within EC Harris BACS, CHAPS and international payments are used.
EC Harris does not pay any employees by cash as their employees are spread all over the country and this would become a big security risk for them with the large amounts of cash that would be involved. The majority of EC Harris’ employees are paid by BACS, which stands for Bankers Automated Clearing Services. This was a company set up by the UK’s leading banks and some building societies. In 2012 it was reported that “around 90% of the UK workforce was paid their wages and salaries directly into their bank accounts through the BACS system” (Worcester College of Technology, no date) . In order to use the BACS system employers must be able to transmit data and use highly secure codes that can only be sent by BACS Ltd, this is to prevent fraud. Making this method of payment one of the most secure. The timescale for a BACS payment is 36.5 hours which is an important consideration to make when planning pay schedules.

Quite often within EC Harris if someone’s salary is wrong i.e. they have had overtime missed or a bonus missed from their wages, an advance has to be processed for them. For this to happen the payroll department require the signed off paperwork from the employees line manager or the business unit controller. Once the payroll department have this they recalculate what the employee should have received...

References: E C Harris LLP. (2014). www.echarris.com/who_we_are/arcadis.aspx. Retrieved February 2nd, 2015, from www.echarris.com: http://www.ecahrris.com/who_we_are/acradis.aspx
Worcester College of Technology. (no date). Provision of Effective and Efficient Adminstration. Retrieved February 2nd, 2015, from Moodle CIPP: http://cipp.wortech.ac.uk/course/view.php?id=161
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