FRAUD DETECTION AND CONTROL IN THE PAYROLL DEPARTMENT
ABSTRACT
This research article examines the detection and control of payroll fraud. The purpose of this research is to look at the causes of the increasing prevalence of fraud and its control in our various ministries’ payrolls.
Identify the impacts and propose possible solutions to eliminate payroll fraud in our organization. In other words, the study’s goal is to identify, examine, and highlight the causes of payroll department and organization-wide fraud. How can it be discovered, checked, and regulated?
Following a study and data analysis, the following issues were discovered. Using inept employees to perform payroll tasks, a lack of adequate internal control and internal checks, the use of dishonest employees or cooks in the payroll division, and a lack of employee motivation
Furthermore, the Enugu state government’s employment of ghost labor in ministries and departments encouraged me to conduct this inquiry into how fraud might be regulated or at least reduced to the bare minimum, but in this case, the adoption of variation control is one of the checks.
Finally, provide solutions to difficulties and make recommendations for payroll departments’ future possibilities. Based on the questionnaire and oral interview analysis, the following recommendation should be made.
CONTENTS TABLE
PAGE TITLE II
PAGE III OF APPROVAL
IV. DEDICATION
V ACKNOWLEDGEMENT
VII. ABSTRACT
IX. TABLE OF CONTENTS
CHAPITRE ONE
1.0 General Introduction
1.1 The Study’s Background 1
1.2 Problem Statement 3
1.3 Research Objective 5
6th Research Question
7th Research Hypothesis 1.5
1.6 Importance of the study 9
1.7 Scope of the investigation and its limitations 10
1.8 Term Definitions 11
CHAPITRE TWO
2.0 REVIEW OF RELATED WORKS
2.1 Payroll Department Fraud Definition 16
2.2 Payroll Department Fraud Types 17
2.3 Payroll Department Fraud Causes 21
2.4 Fraud detection in the payroll department 28
2.5 Fraud prevention 34
37th Reference
CHAPITRE THREE
3.0 DESIGN AND METHODOLOGY OF RESEARCH
3.1 Research Plan 38
3.2 Research Area 38
3.3 Study Participants 38
39.3.4 Sample Method
3.5 Research equipment 40
3.6 Research instrument validity and reliability 40
3.7 Data sources 41
3.8 Analytical Methods 42
CHAPITRE FOUR
DATA PRESENTATION AND ANALYSIS
4.1 Data analysis 43
4.2 Hypothesis testing 53
CHAPITRE FIVE
4.0 FINDINGS SUMMARY, CONCLUSION, AND RECOMMENDATION
5.1 Findings Summary 58
5.2 Final Thoughts 60
60 Recommendation 5.3
BIBLIOGRAPHY
APPENDIX
CHAPITRE ONE
INTRODUCTION
1.1 THE STUDY’S BACKGROUND
Fraud in ministries has recently dominated the front pages of our newspapers, radio and television bulletins. This is undeniable in the minds of readers, listeners, and observers. These stories of deception should be of greater concern to a patriot deserving of the title.
The deeper investigation and more analytical approach to ghost workers had resulted in a rising realization of the frauds and control in the ministries and autonomous departments, as well as the effect on the success or other desires of the Nigerian government.
According to the research, the impact of fraud on government revenue, large organizations, banks, ministries, and so on prompted the creation of this topic.
Furthermore, the use of ghost labor by the Enugu state government in ministries and autonomous departments in 1995, as well as the implementation of various controls, prompted the conduct of this survey and investigation into how fraud might be minimized to the bare minimum.
The Oxford Advanced Learners Dictionary of Current English defines fraud as “criminal deception.”
The definition provided by Hamlyn Encyclopedia world dictionary may provide a more detailed meaning and explanation. According to this vast master dictionary, the term fraud refers to deception, trickery, sharp behavior, or breach of confidence in order to acquire unfair or dishonest advantages over others.
In other words, under these definitions, an act of fraud is never performed until the perpetrator’s intention was present at the moment the doubtful plan was executed. As a result, any claimed fraud that does not meet this requirement must be interpreted and treated as aiding and enabling fraud.
The Random House college dictionary defines fraud as “a deception, trackery, or breach of confidence used by one individual to gain an unfair and dishonest advantage over another.”
These two definitions are more acceptable and adequate for this project since they incorporate the essential elements of fraud, which include the following:
1. There must be decency, deception, or a breach of trust.
2. There must be an unfair and dishonest benefit based on the idea that one man’s loss is another man’s gain.
1.2 THE PROBLEM’S STATEMENT
To say the least, the lately revealed waves of fraud in the ministries are quite unpleasant. No doubt, frauds are being perpetuated in numerous sub-sectors of the economy, but those committed in government organizations, based on prior and recent allegations, are particularly concerning.
A situation like the one we’re in now, where constant reports of payroll fraud in the ministries are being publicized, might damage our future economy. Fraud has caused enormous hardship to our people, both collectively and individually. To capture all fraud has greatly contributed to what is happening in Enugu state’s ministries and departments failures.
The following types of payroll fraud may be discovered:
i. Salary deception.
ii. Salary sheet overestimation.
iii. Figure inflation
iv. Fake names or non-existent expenses
v. Making supplemental vouchers.
As a result of the challenges caused by payroll fraud in practically every Nigerian firm, the researcher was inspired to conduct research to investigate and discover the rationale for these payroll thefts. They are identified, verified, and controlled in this manner.
In light of the foregoing facts, the sort of fraud committed, and other potential consequences of payroll system fraud.
The researcher also intends to give valuable comments and proposals that will help to entirely eliminate payroll fraud in ministries.
THE USEFULNESS OF COMPUTER USE IN THE BANKING INDUSTRY
1.3 THE RESEARCH’S OBJECTIVE
Payroll system fraud is rather common in most Nigerian organizations, which has hampered certain organizations’ growth and development. The study’s major goal is to determine the causes of payroll fraud, as well as how it is recognized, checked, and regulated.
1. To identify the many types of payroll fraud.
2. To identify the sources of payroll fraud.
3. Determine the steps that can be implemented to eliminate payroll fraud.
4. Determine the type of employee who is committing payroll fraud.
5. Make recommendations based on the study’s findings.
6. Determine the nature and scope of payroll fraud, i.e. if it is basic or material.
7. Finally, provide recommendations for future prospects and suggest solutions to difficulties.
1.4 QUESTIONS FOR RESEARCH
1. What kinds of fraud are performed in the payroll department?
2. What are the root reasons of payroll system fraud?
3. What actions will be done to eliminate fraud in the payroll department?
4. Is there any fraud in the payroll department?
5. Does fraud have a negative impact on an organization’s and a country’s economic progress?
6. Does low employee motivation in ministries contribute to fraud?
1.5 HYPOTHESIS OF RESEARCH
In science, a hypothesis is a statement put up as a basis for reasoning; it is a conjecture generated from proven evidence and provided as a temporary explanation of occurrence in order to establish a foundation for future investigation.
It is described as “a conjectural statement of the relationship between two or more variables” by Uzoaga, W.O.
The following hypothesis is proposed to examine the effects of fraud detection and control in payroll departments and Nigerian ministries.
I. HYPOTHESIS
Ho: There is no evidence of fraudulent activity.
Hello: Fraudulent activity have been observed.
HYPOTHESIS NO. 2
Ho: the advancement of an organization is not influenced by dishonest actions.
Hello, the progress of an organization is being influenced by fraudulent actions.
3RD HYPOTHESIS
Ho: there is no fraud in the payroll department.
Hello, there is fraud in the payroll department.
1.6 THE STUDY’S SIGNIFICANCE
The study is intended to assist payroll systems in detecting fraud because the interests of both the government and the workers are jeopardized if not protected. The study would also benefit any other organization that may require assistance in detecting fraud, as fraud and other malpractices are not restricted to ministries alone.
It is hoped that the study’s recommendations and suggestions will aid in the growth and development of government ministries as well as corporate organizations, and that most of their poor internal control checks will be replaced with more effective and possibly less risky ones.
The reduction of the payroll would restore the ministry’s corporate image.
Finally, the study would be extremely beneficial to anyone who want to conduct additional research on fraud in the ministry’s payroll or in any other comparable sector.
1.7 STUDY SCOPE AND LIMITATIONS
Due to time constraints and proximity, the scope of the study has been limited to the payroll system in Enugu state.
Second, due to the sensitive nature of the subject, most pay-rollers are generally unwilling to assist for the simple reason that the researcher may have been dispatched by the payroll system’s internal auditors.
It took time to persuade the personnel to join the corporation, which was made possible since the researcher was able to demonstrate that he was a student at the Institute of Management and Technology (IMT).
Third, because most payroll systems use the similar techniques of operation, it is expected that the researcher’s needs will be addressed by the examination of Enugu state samples.
1.8 TERM DEFINITION
1. Corporate Image: This relates to a company’s goodwill and public image. It could be as a result of producing high-quality goods, providing efficient services, and keeping a contented workforce.
2. Internal Control: An organization’s plan and all the co-ordinate methods and means used within a corporation to secure assets, check data accuracy, enhance operational efficiency, and encourage adherence to established managerial rules.
3. Liquidation: The closure of a business is frequently due to a lack of money.
4. Forgery: Forgery is the act of making or receiving a fraudulent writing with the intent of doing harm to another person. A forgery is any change of a writing done with the purpose to defraud. For example, consider the fabrication of a staff signature.
5. Dummy Names: This sort of fraud involves adding non-existent names on wage sheets.
6. Account Falsification: This sort of fraud is typically committed by payrollers who are behaving ignorantly, naively, or with proven criminal intent.
7. Faked Cheque: Forged cheques with forged signatures are still one of the most popular types of fraud. In this scenario, cheque books are stolen, customers’ signatures are perfectly forged, and many people successfully withdraw money from the bank.
The concepts described and explained above were chosen to be charitable.
FRAUDS AND IRRUPTIONS
According to Onovo (2002), the terms fraud and irregularity can be referred to as errors, and the term error is used to refer to an unintended mistake in financial accounts, whether of a mathematical or clerical character, caused by oversight or misinterpretation of essential information.
Irregularities: According to the research, the term refers to purposeful manipulations of financial accounts for whatever reason, as well as asset misappropriation.
Frauds are one sort of irregularity in this context. This term refers to irregularities including the use of criminal fraud to gain an unfair or illegal advantage.
Management is ultimately responsible for the prevention and discovery of errors and anomalies. This task may be discharged through the implementation of an acceptable internal control system. The management’s responsibility in this regard is
considerably greater where assets are managed in a fiduciary position on behalf of the public in a third party, as is the case with banks and insurance firms. Furthermore, the directors of a business are legally recognized as acting in a stewardship position with relation to the property under their control.
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FRAUD DETECTION AND CONTROL IN THE PAYROLL DEPARTMENT
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