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Payroll Abuses Found at California State Prison and Hospital

Payroll fraud is a serious issue, and it won’t go unnoticed. California state auditors recently discovered $230,000 worth of financial problems and incorrect payments, including payroll fraud and suspicious bonuses and holiday pay, at a state prison and psychiatric hospital, according to a LA Times article.

The Patton State Hospital in San Bernardino and the state prison in Sacramento near Folsom both revealed payroll issues. The state Controller discovered “rates of unauthorized or improper pay in as many 88 percent of the relatively small number of files examined, amounting to excess payments to state workers of nearly $230,000,” the article states.

Specifically, auditors said mental and medical health workers were given improper checks for vacation days and/or unused leave. Checks were made to look like overtime pay. Also, auditors found that 75 percent of extra pay for corrections officers was documented inadequately. Furthermore, prison workers were receiving holiday pay in months where holidays didn’t exist. There were also issues with bonus payments that appeared undeserved.

Auditors also found a lack of appropriate oversight at the psychiatric hospital, especially given that $900,000 in payroll fraud was reported by staff from 2007-’11. Five employees had claimed untruthful vacation time and work.

The last three years of payroll systems will now be reviewed fully by state agencies as a result of these recent findings.

Companies can avoid these issues by using payroll services like ATPP (Accounting Taxes Payroll Partners) in Los Angeles. Our accountants have over 20 years of experience combined. If you are looking for a detailed and reliable payroll partner, call 818-436-2775, or email us to request a quote.

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