What Security Procedures Can Be Used to Ensure Confidentiality of Payroll Information - Assignment Example

Manage payroll Formative assessments Activity 1 1 What security procedures can be used to ensure confidentiality of payroll information? Discuss in 110 words. Logging off of the system when not in use to prevent random access by people, setting passwords that only authorized persons have access to, this prevents those unauthorized from accessing it. Positioning the computer screen so that unauthorized people cannot view the display, setting up the payroll system in a controlled room where only authorized people can gain access, not discussing and details of an employee to avoid leakage of important financial information, ensuring that only authorized people are given information regarding employees pay details and lastly ensuring that the payroll data is used only for the intended purpose so that it is not accessible for use in a wrong way. 2. George is the new manager of the payroll area. He is tasked with examining the security arrangements for the payroll area to ensure they are sufficient. What areas should he focus on to start his examination? Discuss in 110 words. The accessibility of the computers used where they should have passwords to prevent unauthorized access, the physical location of the payroll system whereby it should be in a safe room where only authorized people can enter. Positioning of the computer screen whereby it should be tilted to prevent it from displaying the screen except to the operator, another area is the use of employee’s information whereby details of an employee should be used only for the required purpose to avoid misuse or leakage. Handling where the information should be handled by one person for discretion. The backup aspect where the information should be backed up in an online system such as cloud since the system may have problems and result in loss of the data. Activity 2 Explain the standard process used by payroll management to ensure employee allowance claims are substantiated. Discuss in 110 words. Allowance claims are compensations provided to employees for the problems, hardships or expense they incur in the process of attaining organization goals. They may include house allowance, transport allowance and hardship allowance. Organization use a variety of ways to ensure the allowances are substantiated as follows: Organization provide housing and transport facilities to their employees, they provide favorable working conditions that are not hazardous to employees, They offer services such as medical services within the organization, they offer meals at workplaces to reduce the expenses on the employee’s salary and they encourage employees to pool resources together in order to manage the salaries well and also offer small loans to that employees do not depend on their salary and this is a measure compliments giving them allowances Activity 3 Read the two scenarios and recommend one of the internal control measures for each. Explain why the recommended measure might stop the issue from recurring. 1. Timesheets from the call center department have gone through without management authorization. Discuss in 30 to 50 words. Assigning the duty of ensuring the assessment of timesheets to a particular high level employee. He/she will have the responsibility of ensuring that the time sheets have been authorized and will be liable for the inconveniences and effects if they are not 2. A payroll staff member has authorized all the payroll areas overtime payments including their own. Discuss in 30 to 50 words. Delegation of the duties to different employees and having them being followed up by an independent managerial level employee. This will ensure the process is free from biasness and provide checking of errors Activity 4 Research and provide answers to the following: 1. List five types of record an employer should keep under fair work legislation.  Tax record of the tax remitted for the employee Details records such as the name, address, date of birth and sex Insurance records of the insurance paid for the employee Health records of the health details and history of an employee Education and work experience records of the education background and work history of an employee 2. If a Fair Work Inspector issues an organization with an infringement notice for failing to meet their recordkeeping obligations, how long does the organization have to pay the penalty? If organizations are found not to fulfill record keeping obligations the management people can be imprisoned for 12 months and be fined between 1000 and 2500 dollars. Activity 5 Provide a description for each of the ten minimum standards under current employment standards. Hours of work for employee - Employees should have normal working hours between 7am and 7m otherwise they should be paid overtime. Maximum weekly hours - Employees should work for a maximum of 38 hours a week which can be part time or fulltime. Flexible working arrangements - where employees can request for flexible work periods and conditions if they are parents of a young child, a child with disability, if they are experiencing domestic violence or they provide care to a family member who requires support. Parental leave - is entitled to employees when they give birth or adopt young children. They are entitled to get back to their old jobs after the unpaid leave. Sick leave - which is provided due to personal illness or family emergencies that involve a family member. Annual leave - which is provided for all employees except casual ones and they allow employees to be paid while having time off from work Public holidays – employees are entitled not to work on public holidays such as Christmas and Easter holidays Notice of termination –employers have to give a written notice to employees of their last day of employment Personal career leave – employees are entitled to take time off and deal with personal illness caring responsibilities and family emergencies. Community service leave – employees can take community service leave for activities such as jury duty. Except jury duty, others are unpaid Activity 6 Calculate the net pay for a person earning $850.00 per week paying $202.00 tax, and a child support payment of $115.00 using a PEA of $329.55. Gross weekly pay 850.00 Tax withheld 202.00 Weekly PEA 329.55 Pay remaining 318.45 Deducted child support (this amount to be remitted to CSA) 115.00 Pay remaining 203.45 Plus PEA 329.55 Net pay to employee 533 Activity 7 1. What components make up the preparation of payroll data? Discuss in 120 to 150 words. For payroll to be effective and comply with the regulations regarding payroll systems, various data must be used. Some of the data include: employee information such as medical insurance, social security number and salaries information, classification of employees which designates which employees are full time and part time , timesheets of the number of hours worked which show the payments to employees who are paid based on the working hours, allowances given to employees so that they should be added to the basic salary, applicable taxes such as individual taxes and deductions such as pensions, union fees and garnishments that the employer should pay to the relevant authorities. Any manual payments made to employees due to error adjustment for the period. 2. Where might current data be found regarding designated timelines for the payment summaries and/or the superannuation guarantee? Discuss in 85 words. Information regarding the times lines for payment summaries and the superannuation guarantee are found in the fair work Ombudsman legislation in the fair work act 2009 and the fair work regulations 2009 which provide working arrangements that enable fairness at work and prevent discrimination against employees. Others include: the fair work transitional and consequential amendments act 2009, fair work sate referral and consequential and other amendments act 2009 and the fair work state referrals and other measures act 2009. Activity 1. How is payroll checked? Discuss in 90 words Payroll is checked by generation of various reports by the payroll system to help in checking the accuracy of the transactions. There are various payroll reports that can be generated by payroll systems to assist in checking accuracy of data and records they include; payroll register report which shows the list of all employees that are paid, payroll audit report which checks the salaries paid against the money provided for paying employees and lastly payroll over payment or underpayment report which checks for any overpayments or underpayments paid to employees 2. What are the repercussions if an organization fails to check payroll data? Discuss in 90 words. If organizations fail to check payroll data properly, employees pay not is paid what they are owed. There may be underpayment or overpayment of employees leading to loss of organization income. They may lead to inaccurate and late tax payments which may be subject to penalties and fines. There will be disorganization of work and valuable time will be lost. Employees may not be paid on time if proper payroll data is not maintained. There may be occurrence of fraud transactions due to poor payroll data and the government may impose fines and penalties due to inaccurate maintenance of the payroll data as all organizations are required to ensure the data is correct. Activity 9 1. Why is reconciliation of payroll important? Discuss in 30 to 50 words Reconciliation of payroll is important to ensure accurate payment of salaries, to detect errors and omissions, and ensure accuracy of deductions to statutory and voluntary deductions and to correct any inefficiencies that any have occurred 2. What type of activities does payroll reconciliation include? Discuss in 90 words Payroll reconciliation includes activities such as: verifying the payments due to employees, checking for errors and correcting them before paying employees, confirmation of the taxes upheld for payment and paid to appropriate entities by the employer, evaluation and confirmation of the number of hours worked and the rates of pay applicable, it also includes Ensuring that all the payroll expenses incurred by the company for the provision of services to employees are considered. 3. What is the process to reconcile payroll? Discuss in at least 150 words Payroll reconciliation involves; Confirmation of the period of hours worked by an employee. This is by matching the time cards if available with the entries filled and submitted by the supervisor, or looking at the time sheets for reporting and departure of employees from the company. This is followed by confirmation of the rates of hourly payment. This will include assessing any sick, overtime or vacation rates. Then there is calculation and confirmation of the wages owed to the employees. After confirmation of the pay, there is verification of the voluntary and involuntary deductions for the employees. Then there is Printing a payroll register that summarizes each employee’s wages and deductions for the period. The payroll expenses for the period are then verified to find out if they are scheduled to be debited in the correct accounts. Lastly the pending expenses are verified for accuracy by matching entries in the software or program used and the physical payments to be issued. The process is then complete and the payments can be paid to employees and creditors. Activity 10 1. An employee has called payroll with a query regarding the penalty rates paid in their last salary payment. What should be considered both before and during the handling of this enquiry? Discuss in at least 120 words. Before handling of this query the total amounts due to the employee which includes the basic salary, overtime pay, bonuses, commissions and paid vacation or sick pay should be considered together with the payroll information recorded regarding the employees .They should be examined for accuracy and ascertained before any response is made. The deductions necessary should also be considered and ascertained to show if they were valid. If the information in the payroll is verified, during the query the policies for payment of the deductions and the liabilities or rates for penalties should be considered. Once the total amounts due to an employee and the total deductions are checked, then payments made and the time period should be considered to see if the penalty rates were supposed to be imposed on the employee. Activity 11 1. What are the ATO requirements regarding employees claiming the tax-free threshold if employed at more than one workplace? Discuss in 85 words. If an employee is paid by more than one payer, he/she can only claim for tax free threshold form his primary source of income that is, form the employer who usually pays the highest payments. If the payments are the same, you are required to claim for tax free threshold from your first employer or payer. If you have more than one employer but your total income for the year is less than $ 18,200, you can claim tax free threshold from both of the employers. Activity 12 1. What can payroll deductions include? Discuss in 85 words. Payroll deductions are amounts deducted from an employee’s gross pay. Voluntary Payroll deductions include: health insurance premiums which vary depending on the plan an employee is covered with, retirement contribution funds which are contributed to funding schemes, life insurance premiums which covers the life insurance of employees where in the event of their death, the insurance provides the beneficiaries with the payments saved. Union association fees paid by professionals who are members of a union. The statutory deductions include individual income tax, state and local taxes, social security and Medicare taxes. 2. Who and what is a creditor? Discuss in 30 to 50 words A creditor is an individual, supplier or bank that has provided has provided credit to a company. It is a party that has delivered a product or service on loan and therefore is owed money by a debtor. 3. James has decided that he would like to have $130 per month deducted from his pay and paid directly to his health fund. How would he do this? What would payroll need to do? Discuss in at least 80 words He would need to contact the relevant authorities or service providers. Then he would apply for the health fund scheme where he is advised on the classes available for the amount he wishes to contribute. He will then apply for the company to deduct the payments. The company will also engage in communication with the relevant funding entity .After completion of the process the payments are deducted on his monthly pay. His information is changed in the payroll system and the deductions are implemented. Activity 13 1. Research and report an organisation’s obligations if they do not meet their superannuation obligations. Discuss in a least 150 words. If an organization does not meet its superannuation obligations, it may be liable for a number of penalty charges. First there is choice liability penalty for not giving the necessary employees a choice of super fund, for not giving the a choice within the stipulated time frame, paying the annuities to a complying fund but not of their choice and for charging them any fees regarding the obligations that is not required. The director is also slapped with director penalties if the organization fails to meet the obligations. If the company pays fewer payments that it should by providing false misleading statements, an administrative penalty can be imposed on the company. Failing to keep proper records will attract administrative penalty. While Failing to provide statements or providing them late than required attracts a penalty of 200% of the amount that was charged. 2. Explain why a log book might be used, and how it would be completed. Discuss in 120 to 150 words. A logbook might be used when the number of hours worked can be measured by the distance driven. A logbook will show the time periods when the driver started driving when he stopped and the total number of kilometers a car travelled during a specific period. It might also be used when there is need to calculate the expenses such as fuel, oil and repairs incurred by driver employees if he/she is entitled to claim reimbursements for the expenses he/she incurred in travelling.it would be completed by recording the details of the journey such as the start point and condition of the vehicle, the stop points, the destination and its distance, the costs incurred along the way and the such as loading and offloading expenses, maintenance and cleaning of the vehicles. Activity 14 1. What is BAS? Discuss in 30 to 50 words. BAS refers to business activity statement which is a tax reporting requirement for business issued on monthly basis. The reporting is for paying goods and services tax pay as you go and withholding tax obligations. 2. What methods of payment will the ATO accept for PAYG payments from organisations? Discuss in 30 to 50 words. The methods of payment will be the installment amount where a predetermined amount is calculated using the business and investment income form the most recent tax returns and the installment rate where PAYG is calculated based on actual income and multiplied by a provided rate. 3. Calculate the total tax if amount for FBT purposes is $187,000 and FBT rate is 46.5%. $86,955 0.465*187000 = $86996 Activity 15 1. What are the important dates that employers should abide by when issuing PAYG Payment Summaries? Discuss in at least 50 words. Important dates for employers who issue the payment summaries are 14th July which is the day by which all workers need to file their tax returns and they need the summaries. The other date is 31st October which is the day by which all employers are required to have lodged a PAYG withholding summary report for the year with The ATO showing the amount paid to employees and withheld. 2. What does payroll reconciliation involve? Discuss in at least 80 words. Payroll reconciliation involves the process of checking and verifying the salary payments due to employees at the end of the period, checking and ensuring accuracy in the figures and correcting any errors before paying employees, confirmation of the taxes that have been charged from the salaries for payment to appropriate entities by the employer, evaluation and confirmation of the number of hours worked and the rates of pay applicable. 3. What is the purpose of the PAYG payment summary statement? Discuss in at least 50 words PAYG summary statement is given to employees by their employers and they are important because they show the total of the payments an employee has received and the total amounts withheld for the year. They serve the purpose breaking down the transactions so the employee can understand and for tax and loan acquiring. Read More