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It's About Payroll artwork

True Payroll Crime Stories: Shady Business in the Sunshine State

It's About Payroll · 2026-07-01 · 41 min

0:00--:--

Key moments - from our scoring

Substance score

38 / 100

Five dimensions, 20 points each

Insight Density9 / 20
Originality6 / 20
Guest Caliber4 / 20
Specificity & Evidence12 / 20
Conversational Craft7 / 20

This episode dissects a real Florida case where a Miami orthopedic practice's payroll manager allegedly stole over $1.5 million over 28 months by increasing her own salary by $1,700 per pay period, issuing herself unauthorized bonuses up to $25,000, and racking up $400,000+ in personal charges on company credit cards - all undetected until a new payroll manager joined in 2024. Speakers Brian and Walt break down how the fraud succeeded: the employee misrepresented herself as the practice owner when setting up the payroll vendor account, giving herself unrestricted administrative access, sole approval authority over her own compensation, and control over all system permissions. The case exemplifies catastrophic failures in segregation of duties, lack of independent payroll review, absent compensation authorization workflows, and no oversight of system access. The hosts then walk through six practical control scenarios - requiring authorized third-party approval for any payroll staff compensation changes, obtaining written authorization before processing material bonuses, having owners independently review payroll registers and bank activity monthly, assigning proper role-based access to vendor accounts, flagging unusual pay increases for audit before processing, and comparing month-to-month payroll changes. Critical for small-business owners, CFOs, accounting teams, and payroll professionals implementing fraud prevention controls.

Key takeaways

  • →A single payroll person with unrestricted access to change their own compensation, approve payments, and control all system permissions creates massive fraud risk regardless of company size.
  • →Independent oversight is more critical than access levels; payroll professionals should never be the sole person able to change their own salary, bonuses, or direct deposit information without another authorized party's approval.
  • →Owners and CFOs must personally review payroll registers, change reports, and bank withdrawals monthly rather than assuming processed payroll is accurate, especially in small organizations without segregation of duties.
  • →Fraud in this case went undetected for over two years because there was no routine audit, no monthly expense review comparing period-to-period changes, and no independent verification of payroll data.
  • →Account ownership in payroll systems must be held by actual company owners or officers with verified identity, never by payroll staff acting as account administrator, and staff should have role-based access rather than unrestricted permissions.

In this episode

  1. 1CPT Certified Payroll Technician Course Updates and Community Shoutouts
  2. 2Payroll Dashboard Tools and Metrics for Performance Monitoring
  3. 3True Payroll Crime: Miami Doctor's Office Theft Case Overview
  4. 4Failed Controls and System Access Violations in the Case
  5. 5Segregation of Duties and Independent Review Best Practices
  6. 6Payroll Crime Prevention Scenarios and Multiple Choice Assessment

Mentioned

It's About PayrollMiami Back and Neck SpecialistNerd OutfittersWork Defined NetworkCareer LearningCollege RecruiterTotally Rewarding ChatsSalary.comNovo InsightsTabitha Brown

Topics in this episode

Payroll system access controlsSegregation of duties in payrollFraud prevention controlsCompensating controls for small businessesPayroll dashboards and metricsPayroll register reviewsSystem administrator access governanceAccount ownership verificationDirect deposit audit requirementsExpense reimbursement controls

Questions this episode answers

How did the payroll manager in the Miami doctor's office fraud case gain unrestricted system access?

She misrepresented herself as the company owner when setting up the payroll vendor account, which gave her full administrative and supervisory access to manage salaries, create bonuses, approve payments, and control account-level permissions without the actual owner's knowledge.

How long did the $1.5 million payroll fraud go undetected in the Miami orthopedic practice?

The fraud continued for over 28 months, from approximately September 2021 through January 2024, and was only discovered when a new payroll manager joined the organization in 2024 and noticed suspicious activity in old records.

What are the key internal controls needed to prevent payroll managers from stealing like the Florida case?

Payroll staff should never have sole authority over their own compensation - require another authorized employee to approve salary changes, bonuses, and compensation adjustments using written documentation; owners must independently review payroll registers, change reports, and bank activity every pay period; and vendor accounts should be registered to actual company owners or officers, not payroll employees.

What should a CFO do if a payroll manager claims verbal approval for a large bonus?

Remove or hold the payment until written authorization is independently confirmed directly from an authorized leader; bonuses should never be processed based solely on verbal approval, especially from the person receiving the payment.

What is the safest compensating control for small businesses with only one payroll employee?

The owner, CFO, accountant, or outside advisor should perform independent, documented reviews of payroll registers, change reports, and bank withdrawals at least monthly, rather than giving unrestricted access to a single employee.

What our scoring noted

Our reviewer’s read on each dimension, with quotes from the episode.

Insight Density

9 / 20

The episode covers legitimate payroll control concepts (segregation of duties, access governance, independent review) through a real fraud case, but roughly half the runtime is banter, shoutouts, ad breaks, and filler that dilute the substantive content. The payroll dashboard tip and the quiz scenarios add some practical density, but the underlying principles are standard audit/compliance textbook material.

overtime by location. What it reveals is scheduling inefficiency, meal penalties by location. It reveals compliance and staffing issues. Retro pay volume. It reveals late HR or manager changes
No employee should have sole control over changes affecting their own compensation. There is even some systems will limit the. It'll give an administrator full access except to their own info.

Originality

6 / 20

The episode recycles foundational internal-controls concepts - segregation of duties, trust-but-verify, owner oversight - that are universally taught in accounting and audit curricula. There are no contrarian or first-principles arguments; the closest thing to a fresh angle is framing controls as protective for honest payroll staff, not just employers.

Controls protect the organization, but they also protect honest payroll professionals from false accusations.
Good controls. They don't come from accused people of being dishonest. Good controls make honesty measurable, reviewable, and defensible.

Guest Caliber

4 / 20

There is no external guest - just two co-hosts who are payroll consultants/practitioners conversing with each other. The hosts show field experience but the episode is essentially a two-person discussion with several inserted promotional ads for unrelated podcasts, further diluting the practitioner value.

What's up, Walt? What's going on, man?
Shout out to nerd Outfitters, uh, our good friend, colleague Troy Marcuson out there.

Specificity & Evidence

12 / 20

The episode earns credit for grounding its lessons in a real, named case with concrete figures: a $1.5M fraud, a $1,700 biweekly salary increase, $25,000 bonuses, $400,000 in credit card abuse, and a specific September 2021 - January 2024 timeframe at a named Miami medical practice. Broader lessons, however, remain abstract and unsupported by studies, benchmarks, or additional case data.

from Approximately September of 2021 through January of 2024, she altered her own payroll information without the doctor's knowledge or, uh, authorization. She allegedly increased her biopy salary by approximately $1,700 and issued herself unauthorized bonuses, some reportedly as large as 25k
She is also accused of making approximately over $400,000 in unauthorized personal purchases using the company credit card. Together, the allegations exceed 1.5 million.

Conversational Craft

7 / 20

The hosts engage each other with structured quiz scenarios that create a useful pedagogical format, and they do pose follow-up questions like 'How did she get this to work?' However, as a two-host conversation with no external guest, there is no real challenge or productive disagreement - both hosts consistently validate each other, and meaningful pushback is absent throughout.

So, Brian, the. What's the first thing that jumps out to you? The first thing that jumps out to me is that fraud was not discovered by a routine audit
So how do you think this worked? How did it. How did she get this to work, Man.

Conversation analysis

Computed from the transcript - who did the talking, and the words that came up most.

Share of words spoken

  • Speaker A62%
  • Speaker B33%
  • Speaker C3%
  • Speaker D2%

Most-used words

payroll105owner27access20review19change18employee17account17true16manager16process13compensation13system12control12administrator12crime11trust11

Episode notes

What happens when the person processing your payroll is the fraudster? In this episode of It's About Payroll, Brian and Walt break down a jaw-dropping real case out of Miami - a payroll manager at an orthopedic practice who allegedly stole over $1.5 million by increasing her own salary, issuing herself unauthorized bonuses as large as $25K, and racking up $400K+ in personal charges on the company credit card. Oh, and it went undetected for more than two years. This isn't just a crime story. It's a masterclass in what happens when internal controls don't exist. In this episode: How she allegedly set herself up as the account owner - giving herself God-mode access The control failures that made $1.5M disappear without anyone noticing A NEW segment: Payroll Crime Prevention Scenarios (multiple choice - test yourself!) Brian's Payroll Fitness Tip: How to build a payroll dashboard that catches anomalies before they become felonies Lessons for employers, small business owners, and payroll service providers The real takeaway: No honest payroll professional should be placed in a system where their work is never independently reviewed. Trust is not a control.

Full transcript

41 min

Transcribed and scored by The B2B Podcast Index.

Speaker A: Welcome back, folks. Another episode of. It's about payrolls. We are somewhere in the early 200s. We will get count. I think this is 208. We'll get count again at some point. What's up, Walt? What's going on, man?

Speaker B: Um, just grateful. Trying to live and operate in gratefulness, man. Just thankful for all the listeners. Thankful for the, uh, downloads. The downloads life, uh, just thankful for it, man. How about you, man?

Speaker A: Same here, bro. Same here, man. Just super excited. Having a lot of fun with the cohort with cpt. Our, uh, certified payroll technician course. First cohort is in week four now. Got two more weeks, man. It's just amazing, bro. It's so amazing, man. So excited for it. And the students are excited. Folks are excited. Shout out to nerd Outfitters, uh, our good friend, colleague Troy Marcuson out there. Shout out to all the other influence out there. Work defined network and career learning. I saw everyone had given us the support and it was courageous and bold enough to go on this journey with us. You know what I mean?

Speaker C: Yeah.

Speaker B: Yeah. All right. So do you have any payroll in the news?

Speaker A: I got.

Speaker B: All right.

Speaker A: I found another true crime thing I was like, waiting. Probably overkill to true crime on top of true crime. So I'll give a. I have a payroll fitness tip for our, uh, payrolls out there. And it's build a payroll dashboard, or dashboards, depending on what the metrics you need. Sometimes the systems will help you build this and they may have it already. I've seen systems that have the dashboards and nobody's looking at it either way. You gotta need clean data. If not, you could get an Excel. You could use AI to help build this as well. Because you don't need any PII to build to use the data. Right. Um, but some of the examples that I have is overtime by location. What it reveals is scheduling inefficiency, meal penalties by location. It reveals compliance and staffing issues. Retro pay volume. It reveals late HR or manager changes, manual checks and off cycles. We know how that goes. That reveals a process breakdown. Oh, my gosh. That is like giving me trigger that's triggering me right now. Payroll error rate. Another trigger which reveals training or system issues and then benefit arrears balances which could reveal some deduction setup problems. So there's little things there that can help a payroll pro add some value to their organization.

Speaker B: Yeah, man, I love that. That's great stuff, man. So, perfect segue into our true payroll crime story today. So you want to give us some intro into it?

Speaker A: Man, imagine discovering that someone entrusted your company's payroll had allegedly increased. Wait, let me start over. Imagine that you found out that someone that is entrusted with with processing your company's payroll had allegedly increased their own salary and issued themselves bonuses as large as $25,000 and used company credit card hundreds of thousand dollars racking, uh, up and personal expenses, not just business, not business expenses. So now imagine that this continued for more than two years. Ding, ding, ding. What's that magic number Walt found for us? Right. These things go on for about 18 to 18 to 24 months on average. So more than two years. Today, a true payroll crime story. We are discussing the case of a Florida payroll manager accused of stealing more than 1.5 million from a Miami doctor's office. But this is not simply a story about one employee who allegedly acted dishonest. It is a classic story about unrestricted system access, missing approvals, poor segregation duties, weak account verification, and payroll reports that apparently were not independently reviewed. We talk about that stuff over and over and over. It leads back to the theme controls, right? So, like, not to get too far over it, we don't have to wonder how to fix this. The right is foundational. Corrections is fundamental stuff that governs this that is just not in place. So, Walt, let me ask you this. When a single person can change their own salary, create their own bonus, approve their own payments, and control the payroll account, what could possibly go wrong?

Speaker B: Barely about 1.5 million worth of things can go wrong, bro.

Speaker A: And today we're going to break down what allegedly happened, identify some failed controls. Failed controls. And test ourselves with several payroll crime prevention scenarios. See how we do from there. But tell us. Yeah, yeah, tell us what we are covering, sir.

Speaker B: So, according to authorities, I'm not going to put the lady's name up there, but this employee was a payroll manager or payroll manager or paymaster for Miami back and neck specialist and orthopedic medical practice in Miami. So investigators allege that from Approximately September of 2021 through January of 2024, she altered her own payroll information without the doctor's knowledge or, uh, authorization. She allegedly increased her biopy salary by approximately $1,700 and issued herself unauthorized bonuses, some reportedly as large as 25k like Brian mentioned.

Speaker A: Wow.

Speaker B: Authorities claim that. Yeah, authorities claim that the unauthorized salary increases and bonuses total approximately a little over $1 million. She is also accused of making approximately over $400,000 in unauthorized personal purchases using the company credit card. Together, the allegations exceed 1.5 million. So look, the. It Was reportedly uncovered at the new payroll manager joined the organization in 2024 and noticed suspicious activity in the former payroll manager's records. The physician who owned the practice then filed a police report in June of 2024. So, Brian, the. What's the first thing that jumps out to you? The first thing that jumps out to me is that fraud was not discovered by a routine audit, but it was discovered by the new person who came in and started looking at old records.

Speaker A: Same. Uh, as soon as you said that it totaled a million over the time frame. Like, wait a minute, is there like, accountant not even asking. Like, hey, you went up a million dollars in expenses this past year. What happened? Even month to month, like, if you. If you're operating in the millions, you need outside third party or someone. I mean, it doesn't have to be outside someone. Looking at the numbers and, and comparing your numbers on a constant basis, month over month, check date over check date. What's going on? Hey, this went up. And don't ask the payroll person. Don't have them ask the owner. Right. Like the. The payroll. You can copy them in, but I would. Right. So that suggests a normal payroll review process either did not exist, was. Was not independent, or was not detailed enough to detect changes involving the payroll manager herself. I mean, I don't even, um, know. Oh my gosh. I got.

Speaker B: So, so how do you think this worked? How did it.

Speaker C: How.

Speaker B: How did she get this to work, Man.

Speaker A: So let's dig into that. The most alarming allegation may be how the payroll accountant. The payroll account was established. Investigators claim that Poor. Oh, that the person. It's. It's almost like a. It's, uh. All right, it's like, almost like a play on words because this person's last name was Poor. Claim that the, uh, descendant represented herself as the owner when setting up the company's account with its payroll process that allegedly gave her full administrative and supervisory access, including the ability to manage employee salaries, create bonuses, approve payments, and control account level permissions. By the way, you don't need that level owner like that right there. Out the gate is a red flag because if you set it up properly, the owner should have that access as well. And us as payroll professionals can make sure that that owner is granting us that access in addition to. So that, uh. Right, again, payroll pros have to be beyond reproach. Set it up. This. We do need all that access, especially in a small business like that, but we need oversight, and that's an easy way to make sure that you have oversight even if the owner is complaining like, oh, I don't want to get it. Oh, you got it, you got it. I'm like, hey. But you got to be like, hey, this is not our business. Not my business, Right, Yeah, you, this is your account. You got to do this. So in other words, she allegedly had access to change payroll data, change her own compensation, create bonus payments, approve payroll activity, manage system permissions, and control who else could see or challenge the activity. Again, access that we could and should have for the most part, but with oversight, this is not simply a payroll problem. It is an access governance failure as well. Like I'm, um, like I'm suggesting. So, well, what should a payroll manager do if they ever have full administrative access?

Speaker B: So look, they legitimately may need like, significant access like that to perform their, uh, job duties.

Speaker A: Right?

Speaker B: The, it's not necessarily the problem in itself is not necessarily the access. It's the access without, like you said, the independent oversight.

Speaker A: Right?

Speaker B: So the payroll person that should not be able to make a change to their own compensation, that's a system configuration thing, and then be the only person. And also they should never be the only person reviewing and approving that sort of change. Like, look, there's been, there's been, I've been in systems where I could change my own salary, of course, if I wanted to.

Speaker C: Yeah.

Speaker B: You know what I'm saying? And I've never, never done that. And it, there's a lot of different failures across the board. Right. I want to know where their accounting team was. Like you mentioned, what's their finance person doing? Like, it's. Was this payroll person in charge of that stuff too? Like, was it just, uh, were they doing payroll and were they also the bookkeeper, you know what I'm saying? So if they were, then of course, if they're working in a silo, they could do all those things, man. So it's a, it's definitely control failures all the way around, man. So, and that, and that, that goes into no segregate, no segregation of duties. So you have one person like allegedly who could have the ability to play God in the system and nobody to check that that's a problem. Right. So at a minimum you need compensation authorization, a, ah, workflow, you need to monitor the payroll data entry, payroll approvals, funding authorization, bank reconciliation system, security administration. Those are all different things that should be in question. Uh, especially like you said earlier, if you're, you're a high revenue on the millions, hundreds of thousands in revenue, you need to have Those things secure, like, like what do you always say? Trust but verify, right? That this person probably had a impeccable payroll processing record. They probably had never. Well, who knows now if this person did, had ever done this in other stops, right? So it's just like now, now whoever hired that person before is going to go probably look back and say like, if they get winded, this is a. Let me go check our books. Because this person had the same access. Because imagine this person was only there. This person had already left when the new payroll manager came in. This person was already gone. So this person was probably was trying to hightail it out of town and maybe moving on to the next gig.

Speaker A: Yep.

Speaker B: So like. Yeah, apparently. Yeah. So payroll professionals should be generally, in my opinion, be prevented from making unreviewed changes to their own salary, hourly rate, bonuses, maybe direct deposit. Not so much. Like, like, look, you have to have an audit in place for a direct deposit, right?

Speaker A: Right.

Speaker B: You should be able to change your own.

Speaker A: Right? Right.

Speaker B: Service and stuff like that. Expense reimbursements, that's. That needs to be checked. Right. You shouldn't be able to enter your own expense reimbursement into the system and pay yourself. Oh, you know what? I, I took my family out to eat on the weekend. I'm gonna say that it was a work thing so I can give myself a reimbursement and pay myself back. You shouldn't be able to do that. Right. You shouldn't be able to also change your employment status. So a system has to have the capability to limit these things or you need to have a policy or workflow that should require another authorized person to initiate those or approve them. Yeah. Same thing with the bonuses. Right? Those, those things fall into place.

Speaker C: Right.

Speaker B: And, and look, this also means like, who was reviewing the payroll registers, bro? Was anybody remember those things?

Speaker A: Or if it was just way late.

Speaker B: Yeah. Yeah, man. So, bro, let's. Let's get into some multiple choice questions here. This is the new segment I wanted to try out.

Speaker A: So could you stop the P roll crime? That's so.

Speaker B: Yeah.

Speaker A: Yes. That's interesting. Okay, so let's see.

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Speaker A: We will put out, uh, a scenario. Right. And then reveal the control that gives the organization the best chance for preventing that fraud. Okay, so I'll do the number. I'll do one. Well, how many we got? I'll do half. We got five. Or I'll do the first two or three.

Speaker B: We got six.

Speaker A: So we got half and half. I'll do first three. Okay, here we go. So let's see. A payroll administrator's raise. Your payroll administrator received a salary increase. The administrator normally enters all salary changes into the payroll system. What is the safest process? A let the administrator enter the increase because payroll already has access. B let the administrator enter it because. But ask them to email IHR afterward. Could be C. Require another authorized employee to enter or approve the administrator's compensation change using using written support. Or D wait until year end to confirm the amount on the employees. W2. So what do you. What do you think, bro?

Speaker B: Uh, it's. It's going to be for me like A, Uh, B was okay, but the best the safest process was practice is C. That's right.

Speaker A: Require another authorized employee to enter or approve the administrator's compensation change using written support explanation. No employee should have sole control over changes affecting their own compensation. There is even some systems will limit the. It'll give an administrator full access except to their own info. So that's a good feature if you can implement it. The increase should be supported by formal authorization entered or independently approved by someone else and included in a compensation change order report. Yes, sir. All right, number two. The unexpected $20,000 bonus. I like that. Um, during payroll review, a CFO notices a $20,000 bonus for the payroll manager. The payroll manager says the owner verbally approved it. Okay.

Speaker B: Brian said I could have it.

Speaker A: Right, Brian? Right, right, right. Walt said I can have 50k. Brian, what do you think I'm like what I mean? Uh, anywho, what should happen? A, process it because payroll deadlines are tight. B, process it and obtain the documentation later. No, thank you. C, remove or hold the payment until written authorization is independently confirmed. D, divide the bonus over two payrolls so it attracts less attention. Yeah, sure. Um, what do you think?

Speaker B: Well, bro, like so the. Oh, there's only one optimal Only one. Because the rest of those are, like, suspect.

Speaker A: Yes.

Speaker B: All the way around.

Speaker A: Yes.

Speaker B: It's semen.

Speaker A: If you're even Right. Remove or hold the payment until written authorization is independently confirmed. If your CFO agrees to anything else. He is also in cahoots with this scheme. Explanation is that the material bonus payments should not be processed, basically based solely on verbal authorization from the person receiving the payment. Written approval should come directly from an authorized leader and be retained with the payroll documentation. Absolutely. It shouldn't be on anybody's account. Yeah.

Speaker B: And like you were saying, like, the CFO may be in on it in that case. Or they. It may be somewhere new. Right. Someone new that's coming in doesn't know.

Speaker A: Oh, that's a good one. Yes. Oh, this is the way. Don't worry.

Speaker B: Yeah. When they're kind of taking advantage of. And so, like good CFOs, even if they're new, they would probably try to challenge that, but you never know.

Speaker A: Fair. Uh, all right, last one, and then, Walt, take it over. Full administrator access. A small business has only one payroll employee. That employee needs broad access to process payroll. What is the best compensating control? Give. A. Give the employee unrestricted access because the company is too small to separate responsibilities. Which could be true, but there's better ways. B, have the owner independently review the payroll register change reports and bank withdrawals every pay period. C, change the payroll password every six months. Uh, D, ask employees to report any concerns about their checks. What do you think, Walt?

Speaker B: B. Yeah.

Speaker A: Have the owner independently review payroll registry reports every pay period. Yes.

Speaker B: And look to your point, as a small business owner, you're going to want to have control over those things anyway. Yes. Because it's going to be vital to. For the longevity of your business.

Speaker A: Yeah, yeah, I get, uh. Look, as founders, we know it gets busy. You juggling multiple days. You got long days, long jobs, and you don't want to do everything right. And they'll teach you that if you learn about small business. Owner, entrepreneur. Like, you can't do everything, but this is one of the things that you have to maintain. Oh, my gosh. You know who I just thought of? Tabitha. When she came on and she told. Where she told her assistant, I love you, but I don't trust you. Or whoever the person was helping her with the. With her finances. She was like, I love you, but I don't trust you. And she. Right. Tabitha Brown. She. She maintained that she stays with governance over her finances. You could delegate a lot of things, but understanding your Fighter.

Speaker D: Remember?

Speaker A: You're thinking about it now. Right, exactly.

Speaker B: Because she said she could feel money leaving her account. Like, it works around her sleep. Like money just left m. My account. I want to be connected to money. Like that. Like what? Yes.

Speaker A: Oh, God. God bless us. Uh, yes, that was a good show to keep that show with Tabitha. She had us all laughing, but it was all true. Excuse me. And small organizations, you may not have enough staff to complete the segregation of duties, but in that situation, the owner, a cfo, an accountant, or an outside advisor should perform an independent and documented review of the finances. And even if the owner doesn't do it, like, even if you take that route, okay, I'm going to hire somebody else to do it. You still have to be diligent about the review of it, Right? Because if you don't read the review, like, it's still no point in it. Tabitha, she said once a month, or however frequency she said, they. She literally ticks and ties all the transactions out of her account with, uh, whoever else that she's working. You know what I mean? And her and her husband were very diligent about tracking finances out the gate all their. Their whole relationship. So stick to that. Like, yes, you got to delegate things, but if you're in the business to make money, then track it and pay attention to it. Um, well, while you read this, I'm just gonna refill my coffee. Go ahead. I'm here. I'm listening.

Speaker B: Go ahead.

Speaker A: I'm listening.

Speaker B: So look, Brian, you're a business owner, right? So your payroll manager set up a organization for a new vendor service, and they listed themselves as the account owner. What should you, as the owner, do? A, nothing, because the payroll manager will use the account most frequently. B, list an actual owner or, uh, authorized officer as a primary account owner and assign payroll staff role based access. C, allow the payroll manager to remain the owner, but share the password with the CEO. Or D, use one shared administrator account for everyone. What do you think?

Speaker A: B. B is the answer.

Speaker B: Yeah, absolutely. Because, look, the primary ownership relationship should be connected to a verified company owner or officer, right?

Speaker C: Yes.

Speaker B: One of the terms that recently learned. Responsible party, right?

Speaker A: Oh, yeah.

Speaker B: So yes, you just had a change in CEO and stuff like that, and you have to fill out tax form or form 8822.

Speaker A: Oh, yeah.

Speaker B: For the IRS.

Speaker A: Yeah.

Speaker B: To change the responsible part, dropping James on them.

Speaker D: Nice.

Speaker A: Yeah.

Speaker B: Party needs to be the owner or authorized officer, Right. Playroll Employees should receive individual accounts with permissions appropriate to their responsibilities, and password sharing should Be prohibited.

Speaker A: Absolutely.

Speaker B: All right, next question. All right, bro. One of your employees, one of your payroll employees pay just recently shot up, right? So you're comparing. You showed did a comparison report and shows that one of your payroll team employees gross Pay increased by 60% from the period the previous pay period. What's your best response? A assume it's correct because payroll processed it and you have to trust your payroll team. Right. B, review the employee's pay rate history, bonus details, approval documents and audit logs before releasing payroll. Ask the employee whether the payment is correct and then D process the payroll and uh, review the difference next quarter.

Speaker D: If you're looking to explore fresh perspectives, dive into compensation tech or uh, just enjoy a lively conversation and debates about the evolving world of total rewards, you're in the right place. Welcome to Totally Rewarding Chats where we discuss the future of compensation, benefits, talent and all things HR tech. I'm Sean Luchins, VP of product strategy at salary.com, bring years of product and development perspective. Joining me is the bow tie wearing comp tech loving, experienced guru Paul Ryman, founder and managing partner of Novo Insights. Together we'll be jamming with guests and sharing candidates unfiltered conversations about total reward strategy, compensation technology, talent trends and anything else we find interesting in the world of hr.

Speaker A: Review the employee's pay rate bonus approval audit log before releasing payroll. Come on. Absolutely.

Speaker B: Because the review has to rely on independent evidence, not simply an explanation from your payroll person on why they're receiving the money. Right. You should review all source documents, check that the system here history change logs who the approver is and, and, and during the payroll calculation review before you finalize payroll. So, last question, brother. A payroll manager has not taken a full week of vacation in three years and insists that no one else can process payroll. Applied West. What's the most appropriate response? A. A, you reward that employee's dedication. B. You require cross training and periodic time away while another qualified person performs and reviews the process. C. You allow the employee to work remotely during vacation.

Speaker A: For real?

Speaker B: D. You give the employee another administrator. Administrator. Uh, account as backup. What do you do, bro?

Speaker A: Undergo would be there require cross training, periodic time away while another while their backup can review and do the payroll.

Speaker C: Like why?

Speaker B: But yeah, exactly. Yeah, yeah. Because schemes often require that one person being in a silo who is committing payroll by themselves and uh, they want to continuously be involved so those irregularities are not discovered. Right. So you want to have full. You like, you want to say like keep everybody out and safeguard yourself from getting caught. Right?

Speaker A: Yes. A few things come to mind. Man 1, my, um, one of my first payroll boss taught me, if you're the only one that knows the job, not a, that's not a good thing.

Speaker B: Right.

Speaker A: That's not job security.

Speaker C: Right.

Speaker A: Because leadership, the, the company needs to understand what you for every role is doing in any, any role. Okay. That's one thing. Um, two, I've had this happen because we've both been involved in companies that do mergers and acquisitions, right? And, uh, now as independent consultants and fractional payroll professionals providing managed payroll services, I've heard both new managers that have come on and clients, former clients, current clients. You find out a lot in that discovery conversation about payroll review. Right? Uh, they know they're doing something wrong. And when you have that conversation, because payroll is so intimate, you will find that these folks have a hard time having the conversation if they have a hard time doing payroll review. That's the problem, right? There's no, uh, good sign there. If it's ignorance, hopefully they feel safe enough to just say, I've never known how to do this, I'm sorry if it's wrong, blah, blah, blah, uh, and they have. Then, hey, it's a legitimate. Don't worry this, it's. If you didn't, if you never knew what you never knew, no worries, you just took over. Hey, that happens especially in, when you acquire small businesses that mom and pop legacy are single owner for a long time and when they're small in numbers, they are very rarely payroll compliant. Okay. And the same is true when. And the same thing is true as an independent business owner now. And as I do consulting and we do services is like have that interview with the clients and you know, if they're avoidant and they, oh, well, no, we'll get to it. Don't worry, you'll figure it out. I don't.

Speaker D: Blah, blah.

Speaker A: And they don't want to tell you what they did. And it's like, why are you hiding the process here?

Speaker D: Why?

Speaker A: You know. Oh, no, no, no. You, you, you just, you just do what? I probably did it wrong. You, you should just do it how you want to do it. And it's like, well, it's not how I want to do it. I need to understand how it gets done. So I understand some of the nuances that I don't want to miss. Right. If you miss a nuance and somebody doesn't get paid properly. But then again, any. If they're avoidant like that, if they start getting defensive, then they Know good and well that some they're doing something wrong and they don't want to be discovered. So that's what that made me think of right there, man. All right, what else? As we wrap it up, good episode. So good story too, man. Holy cow. Yeah, bro.

Speaker B: So what lessons can be learned from this, in your opinion, bro?

Speaker A: Let's see. It's both. It's for employers and payroll service providers, right? So for the employers and as the payroll pros, that, uh, could be kind of synonymous, right? And also for a payroll service provider, if you're a payroll person that wants to, to your own service is not a control. It reminds me of an HR leader that said, hope is not a strategy. Okay? A long term employee may be trusted but still require oversight. Okay. Controls protect the organization, but they also protect honest payroll professionals from false accusations. I. That, oh my gosh, that is so true. Right? Because you don't want to. As a payroll pro, we don't have to rely on, oh, my word is my bond. And trust me and trust me and no, we don't. I don't have to do that because let's just look at the black and white. Let's look at the videotape, let's look at the records, let's look at the order controls. That is how I want to trust you, right? Because it shouldn't be about trust in a business that can be so well documented, right? I get in some businesses, yeah. Maybe it is trust. Maybe you got to trust your lawyer to. Because you can't, right? Because you can't really. I don't know how he's going to defend me in this case. And oh my God, you got to build that, ah, trust on the track record that he establishes for you. For a payroll person, no one thing like you can easily just point to the error and point to the root cause. Shout out to Tim o'. Shea. He's, he, he, he's, he's the first one that challenged me to, to ask five whys. I remember when he did it, I was like, isn't that overkill? And as I went through the process with them. And I, uh, get it because I can ask you why. You give me an answer. But I asked if I asked you why again, it's going to force you to keep digging, right? Oh, but why do you do that? And why do you do that and why do you do that? So you got to make sure that you get to the point where you're starting to repeat yourself in the answer because then you've gotten to the root cause. But if you give me a different why every time I ask why, then we got to keep digging. Right. So the owner must remain involved. That is a huge one. Even when payroll is outsourced, the employee, the employer, retains responsibility for reviewing payroll activity and maintaining proper authority over the account. Small businesses are not exempt from internal controls. I'm going to say it again. Small businesses are not exempt from internal controls. A, uh, smaller organization may use compensating controls, including owner review, outside accounting. A, uh, bank alert, dual authorizations, payroll variance reports, and periodic external audits period. Payroll staff compensation deserves heightened review. Okay. And changes involving employees with payroll system access should automatically route to the independent approver.

Speaker B: What about the lessons for the payroll providers?

Speaker A: The lessons for the payroll provider is you should consider safeguards such as review, um, verify the true owner or authorized officer. Right. And payroll providers even as consultants. Right. If we're setting things up for our clients. If you're getting contracts signed, are you an officer of the business that is signing the contract? Okay, great. Boom. So that's verify the true owner or officer of the business. Requiring additional authentication for ownership changes, sending alerts when administrative permissions change, alerting, uh, owners about unusual large compensation changes, require dual approval for high dollar bonuses, and maintain detailed and accessible audit logs. Meaning m. You should be delivering those logs to those owners. So, look, before I pass you, sir. Technology cannot eliminate dishonesty. But properly configured technology can make dishonest behavior harder to conceal. I love that. Yeah.

Speaker B: Uh, yes, sir. All right, so, final verdict. And for everything. Look, so, the criminal allegations in this case have yet to be proven at trial. The defendant has pled not guilty and has requested a jury trial.

Speaker A: So.

Speaker B: But regardless of the final legal outcome, the reported facts offer a powerful payroll control lesson. Right. One individual allegedly had the ability to alter compensation, create those bonuses, approve payroll activity, control, uh, account permissions. So that suspicious activity appears to have remained undiscovered until a new payroll manager reviewed the records. The takeaway is not that employers should distrust. Distrust payroll professionals. The takeaway is that no honest payroll professional should be placed in a system where their work is never independently reviewed. Um, so here's a quote about honesty and payroll. So, payroll runs on numbers, but it survives on honesty. Every payment must be supported, every change must be visible, and no person should be beyond.

Speaker A: Nope. Yep. Look, Good controls. They don't come from accused people of being dishonest. Good controls make honesty measurable, reviewable, and defensible.

Speaker C: Hi, there.

Speaker A: I'm Peter Zollman. I'M a co host of the Inside Job Boards and Recruitment Marketplaces podcast.

Speaker C: And I'm Stephen Rothberg, and I guess that makes me the other co host.

Speaker A: Every other week, we're joined by guests from the world's leading job site.

Speaker C: Together, we analyze news about general, niche and aggregator job board and recruitment marketplaces sites.

Speaker A: Make sure you sign up and subscribe today. Yep.

Speaker B: And like you said, you can't have that one person that can do everything. Enter it, approve it, fund it, and hide it.

Speaker A: That is not payroll control.

Speaker B: Ah, look, man, and so look, we're gonna invite you to continue to listen out for our future true payroll crime stories that we produce. And, uh, look, I thought that we were gonna run out of material for these things, but it looks like people are getting tempted all the time in payroll.

Speaker A: So, man, my gosh, I was thinking while we were running through this, like, remember once upon a time we thought, oh, we're gonna run out. We're only gonna be able to do a couple of stories. Well, I was like, oh, we're run out of stuff 200 episodes later. Plus, we're actually probably in almost in the 3002 with both of the shows. Not all of those are true crime, of course, but we've. You figure, like, every cuz episodes is a true crime for over four years or three or four years now. Like, and it doesn't stop. We could. I almost thought, oh, should we throw a little true crime in every episode to start? Like, tease it or whatever. But because it's so much. It's like, oh, my goodness.

Speaker B: And bro, thank God. Thank God. Knock on wood. Knock on wood. But like, thank God that nobody we know has been caught up in none of these things.

Speaker A: Oh, gosh. Yeah. Oh, my gosh. No, no, no, no. Oh, gosh, yeah. And I don't want to be. I don't. Yeah, yeah. But that, uh, hey, look, that's a testament to our, uh, network and, and, and everybody we know. And that's. That's what's up. But look, until the next time, subscribe, like, share. Tell a friend to tell a friend and keep coming back. Keep listening and tell us what you want to hear. Yo, if we can. I mean, I think we keep it pretty diverse, but if there's anything we're missing and we haven't done or folks you want to see on the show that haven't been on yet, let us know. Or back on the show, if you want to see Walt dancing the salsa and Cha Cha, let us know. We'll put post that. Oh, man. Let us know. Yeah. But until next time, we love you folks. Is.

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