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Practising payroll governance in higher education

by | May 12, 2023 | Payroll professionals, Audit, Risk & Compliance, Executives

What is governance?

Governance encompasses the system by which an organisation is controlled and operates, and the mechanisms by which it, and its people, are held to account. Ethics, risk management, compliance and administration are all elements of governance. 4 core elements to ensuring good governance include:

  • Transparency
  • Accountability
  • Stewardship
  • Integrity

Here’s a quick video by the Governance Institute of Australia with more info:

Why is payroll governance important?

Point blank, payroll is a high-risk function.

Some of the biggest risks involved with poor payroll governance include:

    • Non-compliance against payroll and workforce obligations
    • Under/over payments due to legislative challenges or configuration/interpretation
    • Key personnel dependencies and staffing challenges
    • No management oversight and visibility of operational issues
    • Poor controls and segregation of duties – perception of fraud
    • Lack of governance and best practice activities
    • Fragmented work practices, processes and tools particularly with remote working

Good payroll governance allows organisations to manage and minimise these risks within payroll. It also allows you to demonstrate and comply with all relevant legislation and workplace requirements, providing oversight, transparency and conformity to the whole of business governance, risk and compliance.

Key payroll challenges in Higher Education

After working alongside many major Australian universities, we’ve seen consistent challenges come up – the most common being:

    • Casuals’ compliance
    • Legislative deadlines/activities being missed
    • Integration issues between HCM and payroll system
    • Overpayments and underpayments as payroll lacked visibility of transactional changes
    • Increase in off-cycle payments as a result of mispayments
    • Increase in pay queries through ticketing system
    • Lack of transparency and accountability of payroll activities
    • Unplanned absences within the payroll team
    • Large team working remotely

A recent excerpt from the 2021-22 Fair Work Ombudsman Annual Report says it all:

Poor governance and management oversight have contributed to widespread underpayments by universities.

“We’re working to ensure that underpayments are quickly rectified, and… to ensure appropriate systems and governance processes are implemented to promote positive, forward-facing cultural change. We expect to be taking high-level enforcement action against a number of universities next financial year, and urge all to prioritise their compliance.”  said, Sandra Parker, PSM, FWO.

So with reference to payroll governance, it can be confusing to tie down exactly what systems and mechanisms will show that an organisation is practising good governance.

To help, we’ve come up with 8 essential items for payroll governance and we’ve developed the Paytools platform that lets you set up, manage and run a formal governance program.

Download our free Australian Payroll Governance Toolkit PDF to learn what’s involved with these 8 items, including best practice tips and useful examples to help get you started.

Australian payroll governance

How one sandstone university is tackling governance using tech

Watch our recent webinar to see the project steps involved in improving payroll governance for a major university in Australia. HINT: Skip to 13:40 to get straight into the case study.

Getting your team to practise good payroll governance in higher education

Keeping in mind the complex and every changing reality of Universities, there’s some quick wins that we can help you with.

We built Paytools to provide organisations with a formal framework to manage payroll operations and governance. Here’s some key features that will solve payroll governance in higher education for payroll teams and leadership.

Work schedule

The work schedule is a shared calendar purpose build specifically for payroll. It allows you map out all your recurring deadlines and key dates for payroll operations.

Different to a personal calendar, the work schedule allows you to define the what, when, who and how – so you can link to your processes or document these in the schedule itself.

As mentioned, transparency is a key part of a governance and having an artefact like the work schedule goes a long way to making sure everyone is on the same page.

Paytools

Operations dashboard

The payroll ops dashboard allows the payroll manager, or anyone accountable for payroll to see what’s going on (without having to get into the weeds with detail).

Gain the ability to define categories of work (e.g. super, payroll tax etc) that you might want to monitor.

The info is automatically fed from the work schedule and any other important activities happening across the payroll team.

Paytools dashboard

Reusable checklists

Paytools has checklist templates – which are workflows and checks that are attached to recurring events to ensure consistency and accuracy in your processes.

By using checklists and events, you can easily build up processes and checklists of how payroll operations are run, keeping knowledge in the organisation, not in people’s heads.

Payroll processing main checks

Proof of work

We recently spoke to a payroll manager of a large org 1000+ employee organisation who is currently going through an Enforceable Undertaking with FWO. Their checklists are all in Excel and they just type their name in a cell of the sheet to say they’ve done the action.

Not a verifiable way of working!

In Paytools, as you mark off checks as complete, you can also add comments and attachments against the check to show proof of work.

This creates a secure, unchangeable audit trial about who did what when.

Activity log

Risk and Issue Management

Maintaining a central and managed issue register is key to good payroll governance in higher education.

Often compliance issues are upstream of payroll, but payroll often get to see close up some of the risks from the front line.

Stewardship is a governance value, which means looking after a function or something well.

Part of good payroll governance is identifying risks and escalating them to the appropriate stakeholders. Paytools allows you to describe and classify risks with custom ratings, add mitigation steps and build response plans.

Payroll risk register

Reporting

For those organisations who have gone through an Enforceable Undertaking, payroll has definitely become a board level topic! Key stakeholders are now asking to set up a cadence of reporting. At the very least, payroll should be producing reports quarterly on risks and performance. Paytools provides your team with a way to demonstrate:
  • That payroll is on top of it’s game
  • How complex and busy payroll is – it’s not just a magic red button
Access multiple real-time reports, which can be easily shared via a link.
Risk rating

Built-in payroll best practice

Most payroll departments rely on expertise and experience of their people – which given there is a lot of knowledgeable payroll professionals is not a bad thing.

However, if those people happen to not be across something – you may be missing a critical process (legislative requirement or best practice).

At Paytools, our goal is not only to provide a governance and operations platform but also provide a foundational knowledge and know-how for payroll professionals.

We work with leading payroll consultants to build out a minimum of BAU, reviews and hygiene checks that any organisation should be doing.

To minimise the effort of getting started, we can provide you with onboarding process to quickly setup your work schedule. We’ve also populated the work schedule for a typical payroll department, so all you need to do is modify our default events and checklists to suit your needs.

Risk rating
See more features here. So, what’s the result of doing good governance and a platform to support it?

Payroll operations managed
– Work schedule gives early warning system of key deadlines or processes missed
– Never miss a key deadline, it’s visible and shows up as overdue

Risk management
– Identify and communicate risks so you can manage, plan for them and prevent it from happening or causing a big impact

Transparency/Accountability
– Build a culture of confidence and trust across the organisation, plus you can verify it too

Best practice governance
– The FWO report states to prioritise compliance and build governance systems, which is exactly what Paytools provides

Having a dedicated platform not only makes it easier to manage governance responsibilities, but also bring focus to governance within the team and key payroll stakeholders.

Book a quick demo today to learn more about how Paytools can help you create a fail-safe program, specific to payroll governance in higher education.

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