Audit-l is sponsored by Audit Leverage (IAD Solutions, Inc.) www.auditleverage.com ***************************************
This may not be exactly what you looking for but I hope the methodology helps. I had an opportunity to audit overtime in a steel factory and we went thorough following steps to identify if the overtime system was abused. 1) Obtained a report of installed capacity, at normal hours and with overtime hours, and actual monthly capacity utilization in the last year to get a better understanding of operations. Monthly overtime budget was not used as the overtime was directly linked to capacity utilization. 2) Interviewed Production Supervisors, the Payroll Manger and the Controller to document the process of recording, controlling and monitoring overtime hours. 3) Obtained a monthly report of overtime for the last year to identify months in which highest overtime was recorded. Three months were selected based on the highest ratio of overtime to normal wages % divided by capacity utilization % for further scrutiny. 4) A sample of 20 employees who have recorded highest overtime in these three months were selected. 5) Time cards were verified along with all the overtime slips for these 20 employees in the selected months. Particular attention was give to those employees who have continuously worked in more than one shift on the same day. Overtime was also closely scrutinized with employees' vacation and other leave records in that month. 6) Sampled and other employees along with Production Supervisors were interviewed to discuss finding of the review and to get their feedback. We concluded that the overtime system was grossly abused with employees punching in time cards of other employees and this was either undetected or ignored by the Production Supervisors as many of them were active union workers. One employee had worked morning shift and had overtime shift in the afternoon and at night; and was also punched in for the next day morning shift!!! A continuous 32 hours worked when the monthly capacity utilization was below 60%!!! The procedure of always preparing overtime slips and approving it was reiterated with the Production Supervisors. The procedure of verifying overtime hours punched on the time card with the overtime slips was reiterated with the Payroll Dept. Also, the Payroll Dept. was asked to regularly spot check overtime of employees and seek assistance from Production Supervisors in case of any doubts or mistakes. The Controller was asked to analyze monthly overtime expense with capacity utilization and seek explanation from the Production Manager and the Payroll Manager in case of unusual data. Regards, Raj -----Original Message----- From: King, Cheryl [mailto:[EMAIL PROTECTED]] Sent: Thursday, September 05, 2002 10:33 AM To: '[EMAIL PROTECTED]' Subject: Overtime audit Audit-l is sponsored by Audit Leverage (IAD Solutions, Inc.) www.auditleverage.com *************************************** I was wondering if anyone had any suggestions for doing an audit of overtime usage and suspected abuse. It seems that some workers are able to work almost 2000 extra hours in a year in addition to their regular 2000. Any suggestions on where to begin would be appreciated. CAK Audit Leverage is a department management software package that integrates and automates the entire audit process. This comprehensive package includes risk assessment, audit planning, budgeting, staffing, scheduling, timekeeping, automated work papers, audit findings & recommendations, reporting and audit follow-up. Audit Leverage allows auditors in the field to work off-line and dial in to synchronize their work with the Audit Leverage database on the network, enabling managers to review the work papers instantly without being at the job site. Demo available at www.auditleverage.com If your organization would like to sponsor this discussion list send an e-mail to [EMAIL PROTECTED] for information. To unsubscribe to the Audit-l list send an e-mail to [EMAIL PROTECTED] Leave the subject line blank and include the following message in the body: Unsubscribe audit-l (yourname) Thanks, Jim Kaplan List Manager Audit Leverage is a department management software package that integrates and automates the entire audit process. This comprehensive package includes risk assessment, audit planning, budgeting, staffing, scheduling, timekeeping, automated work papers, audit findings & recommendations, reporting and audit follow-up. Audit Leverage allows auditors in the field to work off-line and dial in to synchronize their work with the Audit Leverage database on the network, enabling managers to review the work papers instantly without being at the job site. Demo available at www.auditleverage.com If your organization would like to sponsor this discussion list send an e-mail to [EMAIL PROTECTED] for information. To unsubscribe to the Audit-l list send an e-mail to [EMAIL PROTECTED] Leave the subject line blank and include the following message in the body: Unsubscribe audit-l (yourname) Thanks, Jim Kaplan List Manager
