In a startling revelation, a local council has been found to have erroneously disbursed over £800,000 to former employees due to payroll inaccuracies. This oversight resulted in a total of 602 overpayments being made to 593 ex-workers, cumulatively amounting to £863,000. The largest single overpayment recorded was a staggering £57,067 in gross pay, equating to £42,272 after deductions. This incident has prompted a thorough examination of the council’s payroll and leaver processes, highlighting significant operational flaws.
The Highland Council, in an audit report for the fiscal year 2022/23, acknowledged the mishap and attributed the error to complications in how departures were logged and processed within the organization’s systems. The auditors’ findings pointed to a “lack of oversight and timely housekeeping” concerning the notification and handling of staff exits, underscoring a systemic failure to maintain accurate payroll records.
Further compounding the issue, auditors discovered through National Fraud Initiative (NFI) matches that the existing controls to prevent such errors were inadequate. The audit underscored an alarming absence of verification checks to confirm the presence of council staff, alongside delays by departments in communicating crucial information about leavers to the HR and payroll teams. Such lapses facilitated the continuation of payments to individuals no longer employed by the council.
In response to these findings, the Highland Council has taken concrete steps towards rectification and prevention of future occurrences. The council is actively working on recovering the overpaid funds, adhering to its established policy for such situations. To bolster the integrity of its payroll system, the council has introduced enhanced controls, additional training for staff, and is in the process of integrating new procedures and processes.
Moreover, the auditors recommended the implementation of an annual establishment check across the council. This measure is intended to confirm the accuracy of the payroll roster, ensuring that only current employees are compensated. Such checks are aimed at instituting a robust layer of verification to prevent the recurrence of overpayments which caused immense stress at work.
As the council moves forward, it has committed to reinforcing reporting procedures and guidelines for managing leavers. These initiatives are part of a broader effort to fortify payroll administration uncertainty and safeguard against financial discrepancies. The anticipated recommendations from an internal audit are expected to further refine practices, ensuring the council’s payroll system is both accurate and reliable.
The incident serves as a cautionary tale for other organizations, underscoring the critical importance of diligent payroll management and the need for continuous oversight and verification to prevent costly errors.
The Workers Union Says…
“The situation faced by the Highland Council serves as a stark reminder of the complexities and challenges inherent in payroll management. It underscores the importance of robust systems, regular audits, and continuous improvement to safeguard against workers overpayments. For organizations across the spectrum, this incident highlights the need for vigilance and proactive measures to ensure financial integrity and accountability.”