Written By Kurt Needles
Needles & Associates
P: 303.430.4225 E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

I was thinking of a couple different payroll audit situations recently, and what can make this process better, or at least less distressing, for all involved.

Stepping Into the Electronic Age

We do payroll audits for a national fund that involves multiple “locals,” and various contracts within those locals.  In previous years, we only received photocopies of the remittance reports on the multiple files from the fund office.  We then had to manually key the hours into our workpapers files, which was very labor intensive in order to get them in a manageable form.  We realized, through experience, that when we went into the field we would be missing reports, or had misinterpreted the handwritten reports.

After one particularly horrendous audit with thousands of hours of discrepancies, we recognized that some reports were never sent to us, and the employer sent us back information saying he had paid many of the hours on our audit.  We contacted the fund office and begged them for some kind of electronic report.  They brought in a programmer and produced the reports in an Excel file.  This particular payroll audit with all the corrections then dropped the discrepancies by 11,000 hours.

If we had to testify on this audit without the corrections, we would have been in trouble!

Now when we set up audits, electronic files cut down our set up time by 60 to 70%.  By nudging our client into the modern era, we can audit more accurately and for less cost.

Payroll Auditing on the Bayou

One recent payroll audit took us to the doorstep of one of our southern clients, in this instance to the residence of the company accountant.  Every payroll auditor detests auditing in someone’s home – it is just uncomfortable.  On this particular day I had to ring the bell several times before the door was answered.  Apparently the accountant had forgotten about the audit appointment because he was still in his pajamas. 

After throwing on a robe, the client led me back to his office.  I found one spot to sit on that was not covered with stacks of papers and other piles of junk and managed to find an outlet to plug in my laptop.  As I was going through the payroll, the accountant insisted on talking to me as I worked, and a Chihuahua was constantly walking around my feet.  The accountant told me all about his John Wayne movie collection, his pirated satellite signal, and showed me his collection of LARGE bowie knives.  Needless to say, I was glad when that audit was over!

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