USA Possible Payroll Fraud

[MidnightJulliett]

Hello friends.
I own a small restaurant in the USA, we are an LLC. The employee that does my weekly payroll has a BS in Accounting. Lately I have become increasingly concerned that this employee is stealing from me in ways I may not understand completely. Hence the reason I ask for your assistance and all suggestions are welcome.

Recently one of my waitstaff came to me and expressed her frustrations that she lost some of her state benefits due to innacurate gross pay calculations on behalf of my payroll clerk.

The waitstaff told me that the payroll clerk has persistently instructed the waitstaff to do the following nightly at cash out:

For those of you that are not familiar with the process, at the close of each shift when the waitstaff go to clock out, the system prompts them to declare their cash tips. Their credit card tips are already accounted for by the system. She was demanding that the waitstaff declare their cash tips to be the same exact number that reflected in the credit card tips, regardless of accuracy. So if they made 150 in credit card tips they had to claim 150 cash tips. This caused their paychecks to be innacurate and when DHHS went to calculate their earnings at a recertification appointment they were denied assistance because their income was too high.

I may be grasping at straws but when I confronted the employee she became defensive and stated there was a glich in our software and if the declared tips and credit card tips were the same amount it would cancel and balance itself out correctly? This is absolute nonsense. I know that for sure. Our system is brand new and there is no way that is correct. I am also convinced with her majoring in accounting and previous experience in this business she knows much better. I felt she was lying and appeared guilty.

Our sales system and payroll system are the same program. Harbortech. Any idea what this employee could be up to? Ive noticed since i have been more proactive in payroll she has seemingly developed financial problems. Thank you so much

 

[Drmdcpa]

The tip thing does not make sense to me either.

As for malfeasance, separation of duties are designed to prevent this. In other words, the person that creates the paychecks does not have signatory authority and does not reconcile the bank account.

So if a fraudulent check is created, the signer or the person reconciling the account will have a better chance of catching it. As opposed to the person creating, signing and reconciling the checks.

 

[bklynboy]

Agree that this is a fishy answer and I would audit the books right away to see what is going on. I would also take her off the payroll right away. You cant make up tip amounts. Her being defensive is a big red flag by the way since this implies she is hiding something - she should be more cooperative as an employee.