Finally, a “go-to” resource for Payroll Auditing.

Written by Phil Vivirito
Bond Beebe   
P: 301.272.6090  E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Some employers will customize a payroll report for you.  They may be able to provide it as a text file, and Excel file, or as a PDF.  It is important that you are clear and precise in what information you require in this report.  You as the auditor must tell the employer what should be in it.  I have seen instances where employers omit pay codes or individuals from these reports because they feel that those pay codes or individuals should not be reported.  The rule of thumb when using a custom report should be that all wages are included (even if you are auditing hours) for each employee.  Then request W-2s for some or all of the employees and reconcile the gross wages on the custom report to the W-2 for some employees.  If you cannot reconcile them, there may be pay codes omitted.

Written By Larry Beebe
Bond Beebe
P: 301.272.6025 E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

A U.S. District Court in Northern Indiana rejected claims by Carpenter’s Employee Benefit Funds to hold the President of a bankrupt company liable for unpaid contributions.

The court explained that the Funds were required to show that “the corporate form was so ignored, controlled or manipulated that…the misuse of the corporate form would constitute fraud or promote injustice.”
In considering whether to impose individual liability, the BNA Pension and Benefits Reporter in its June 22, 2010 issue stated that “courts consider factors including undercapitalization, lack of corporate records, shareholders’ fraudulent representations, use of the corporation to promote illegal activities of fraud, the payment of individual debts, commingling of assets and the failure to observe corporate formalities.

The court concluded that there was no evidence in this case that the employer should have been personally responsible.

Written By Phil Vivirito
Bond Beebe
P: 301.272.6090 E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Usually receiving payroll records in a PDF format has the same flexibility as having a hard copy.  I have seen auditors print out the PDF records and simply use the hard copy!

As a useful measure, request that the employer make the PDF file searchable.  You can use the search function to navigate around the file.  You may also inquire if the employer can change the sort order of the records to make it easier for your use.  For example if the payroll is in clock number order, ask for it to be resorted to alpha order.  Lastly, become familiar with using a PDF and understand its capabilities, such as highlighting, adding text and adding tick marks.