Payroll fraud involves the manipulation of an organisation’s payroll system to divert funds for personal gain.
This type of fraud is particularly insidious because it often goes undetected for extended periods, leading to significant financial losses.
In South Africa, both public and private sectors have been affected, with cases ranging from ghost employees in government departments to falsified overtime claims in private companies.
In the South African context, payroll fraud is a growing concern due to widespread issues such as, weak internal controls, limited oversight in public sector entities, and some cases, collusion between payroll officers and other employees.
Both public and private sector organisations have reported significant financial losses as a result of payroll fraud.
The seriousness of this issue has prompted numerous investigations by the Auditor-General, forensic accountants, and law enforcement agencies such as the Hawks.