coins and computer


Control reports regarding payroll constitute a strong tool regarding control, verification of the reasonableness of salary payments, and identification of deviances in the payroll framework.

From a practical standpoint, the information already exists in your computer system. Our firm will help you generate that information from the system.

The services rendered by the payroll control department

Examining the salaries paid to employees of contractors

The department provides dozens of clients services regarding examination of salaries in accordance with the Law for the Strengthening of Enforcement of Labor Laws. Our client list includes Bank Hapoalim, Clalit Health Services, Maccabi Health Services, Ariel Properties, Shufersal, Mekorot, Tower Semiconductor, the Azrieli Group, etc. As part of this work, we check to see if salaries are paid according to the laws regarding employees of contractors who work for our clients. In the event of breaches in the law, we ensure that the contractor remedies the deficiencies.

In addition, we offer our contractor payroll clients on a regular basis, various services, at no extra cost:

  • Assistance in setting hourly work rates
  • Implementation of provisions of various expansion orders
  • Providing a response to specific issues that are relevant to this field.

Identification and prevention

Salary expenses are usually significant expenses in many organizations and notwithstanding this fact, the controls in place are often very limited, when compared with procurement for example in respect of which there are tighter controls even though the amounts are less.

The control of Management regarding the correctness of salaries is often limited to a comparison of the current month’s payroll to the previous month’s, under the assumption that the payroll controller performs tighter controls. Our experience shows that the controls of the payroll controller are often limited. The control is based on a manual check of a sampling of employees. Due to the complexity of the payroll and the volume of data, manual controls are usually inefficient because quite often, the sample is not representative.

The efficiency of the control

The data regarding payroll processing is located in the computers of the payroll system. Therefore, the organization can often utilize the report generator of the service bureau in order to perform “smart” payroll controls. The generator will generate periodic control reports that set out data that are deviant and such deviances can be checked and found to be deficient. These deficiencies will be handled accordingly.

Advantage of using a computer

Implementing computerized controls enables the organization to perform testing on all of the employee data and on all of the payment definitions. There is no longer a need to perform sample testing. The computerized testing is quicker than manual testing and is also less expensive.

Deviance reports

The control reports we will design for you include deviance reports, including: checking for duplicate payments of the same salary component, payment of salary components that contradict one another, payment of salaries to fictitious employees, payments of wage increases at unreasonable intervals, payment of a payroll component in an unreasonable amount, etc.

The work process

  1. On the basis of our understanding of your needs (together with you), we will perform a gap analysis between the controls that should be in place and the ones that are actually in place. You will select the control reports that you desire from the ones we offer.
  2. We will define the reports that you have selected and will compile them in the report generator of your service bureau.
  3. We will run the reports for the initial period in order to ensure that there are no errors. If necessary, we will make corrections to the reports.
  4. We will deliver a set of reports for you to use on a regular basis.

Checking payroll components at government companies

Every so often, payroll deviances are discovered in government companies and exposed in the public media. Many companies would like to know in advance that they are free from deviances in their company that could place them in a bad light. We are experts at conducting such examinations. We assist government companies in ensuring that their payroll payments are in line with the provisions of the Government Companies Authority and/or the guidelines of the Accountant General. At the conclusion of our examination, we make recommendations as to how to correct the deviances at minimum cost to the Company.

Compiling payroll processes

A proper payroll processing process which includes the appropriate controls, segregation of duties, etc., ensures correct payment of salaries and reduction of risks of embezzlement. Our department has amassed extensive experience in compiling effective payroll processes at various companies, commencing with the absorption of the employee into the system and culminating with the issuance of the pay slip and including the designing of controls that accompany the payroll process until the actual payment is made.

As part of this service, we take into consideration the size of the company, the organizational structure, the existing information systems in the organization, the different employment contracts, etc. The final product of this service is a proper payroll process, specifically tailored to the individual company.

Remuneration of senior officers

Amendment 20 to the Companies Law sets out the principles of a senior officer remuneration plan. We assist companies in determining their remuneration policy in respect of senior officers, in accordance with the principles set out in the Amendment. The work is broken down into a number of phases that are fully-tailored to the needs of the Company. The final product is a policy document that is ready for the approval of the remunerations committee, including benchmarking to similar companies.

Checking social benefits

Commencing from 2008, the law stipulates that all employees must be insured with pension insurance, in accordance with the percentages set out in the law.

Failure to withhold the necessary pension components is a violation of the law, in respect of which every senior officer of the Company bears personal liability. As part of our audit, we will verify the fairness of the provisions for social benefits and recommend improvements for the process so as to significantly reduce the liability of the Company and its senior officers.

Our added value

  • A department that is totally dedicated to this issue.
  • Service based on professionalism and the involvement of senior staff.
  • Assistance of the firm’s technical department in the fields of accounting, taxation and economic consultancy.
  • The performance of projects around the world, utilizing the services of local experts at the member firms of the Grant Thornton International network of which we are the Israeli member firm. 
יוסי גינוסר
Partner, CEO, Fahn Kanne Control Management Ltd.
Yossi Ginossar