A. Exercise on input controls This exercise relates to The Building Supplies Trading Fund (BSTF).

Scenario The Building Supplies Trading Fund employs 4,131 staff as follows: Category 1 2 3 4 5 6 7 8 9 10 11 12 Description Manufacturing workers Manufacturing supervisors Factory managers Sales managers Salesmen Maintenance engineers Maintenance supervisors Maintenance manager Storemen Stores manager Other manual employees Admin. staff Number 3500 177 10 10 188 80 8 2 30 6 20 100

Employees in categories 1,2,6 and 7 are paid weekly in arrears, an their gross pay is dependent upon an aggregate of four hourly rates, i.e: 1. The basic rate, applicable to all hours worked; 2. The full rate, which is applicable to all hours over 20 per week; 3. The overtime rate, applicable to all hours worked in excess of 39 per week.; 4. The efficiency rate, payable on all working hours and based upon the efficiency of each work section in the previous ten weeks. The rate is reviewed every four weeks. Employees in categories 3, 4, 8 and 12 receive an annual salary paid monthly. Categories 3, 4 and 8 receive an additional bonus as a percentage addition, which is based upon production efficiency for each works section or sales section over the previous quarter, and applying quarterly in arrears.

Employees in category 5 are paid a monthly basic salary plus a commission, based upon an employees seniority and sales. The commission rates are reviewed every 6 months. Employees in categories 9, 10 and 11 are paid a basic hourly rate, paid weekly in arrears. Staff in categories 1, 2, 6, 7, 9 and 10 complete weekly clock card which show time on and time off. At the end of each week clerical staff complete the cards by entering the hours worked each day and the total for the week. Staff in category 11 complete weekly time sheets which record time on and off and other hours claimed. These are checked by clerical staff and certified by the supervisor. Staff in categories 3, 4, 5, 8, and 12 keep register of attendance, absence and other pay items. For category 5 staff the register is completed in arrears as daily sales reports are received from salesmen. Four weeks before the end of each month each section office completes a return (Variance return) which shows, for each member of staff, departures from standard pay. Any corrections for the last four days appear in the next moths return. Productivity data is transferred by disk each week in arrears from information generated by the Works department. The data is logged into the pay system and used to calculate productivity rates and bonuses. Sales data (for the quarterly efficiency review) is produced before the end of each quarter by the Sales team. These are passed to the pay section who enter them to calculate the productivity of the sales section and the bonus payments to sales managers. Twice a year the pay section produces a printout for each salesman, showing seniority , sales analysis, commission record. A space is left for new commission rates to be entered as authorised. The new rates on this printout are manually approved and entered into the payroll system. Weekly paid employees receive their pay by cash or cheque. Monthly paid employees are paid by cheque or direct transfer to their bank accounts via the Bankers Automated Clearing System (BACS). BSTF sends a tape to the bank each month. Data input is via a keyboard terminal in the personnel section. You are required to: 1. Identify the various types of input relating to pay and the data to be entered (exclude pay rate changes and deductions e.g. taxation); 2. Specify how BSTF might batch input data (from 1 above) for processing and the data that would be used as batch totals; 3. Specify how the data could be checked at the data preparation stage, immediately prior to keying in; 4. Provide examples of the type of data validation that could be applied on data entry.

B. Exercise on processing controls Please refer back to the BSTF case study. Required: Determine ways in which the client could ensure that the processing of payroll data is complete and accurate.

Answers to BSTF Questions

1. Main inputs and data to the system are: Clock cards Payroll number Department Week number Name Hours worked

2. Batching of data input and batch fields Clock cards Batches <50 Batch header showing Job code input type code week number total number of records total hours worked

3. Validation of data at the data preparation stage Clock cards Payroll number check digit Week number range (1-53) Hours worked range checked Record format check Record completeness check
(Above is a sample. Do the same for the following: Timesheets, Variance returns, Commission rates, Batch header records)

4. Computer input validation controls

Clock cards Payroll number check to department records Department appears in valid table Section appears in valid table Week no is this week or earlier Record count = batch header count Total hours = batch hours total (Above is a sample. Do the same for the following computer input: Timesheets, Variance returns, Productivity report, Sales efficiency file, Half yearly commission)