Highland Council mistakenly overpaid more than £800,000 to former members of staff after they had left the local authority.
Auditors found there were issues with how leavers were being recorded on the organisation’s systems, which led to the payroll error.
A total of 602 overpayments were made to 593 ex-workers, totalling £863,000.
The highest amount paid to one individual was £57,067 in gross pay, or £42,272 net.
Highland Council said it is in the process of recovering the funds.
The overpayments were highlighted in the council’s annual audit report for 2022/23.
The auditors reported: “We found there were issues with leavers and how these were being notified and subsequently recorded on the council’s systems.
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“In general, there was a lack of oversight and timely housekeeping regarding the notification and processing of leavers.”
‘Control not working’
National Fraud Initiative (NFI) matches also confirmed that the “current control was not working as intended”.
The auditors added: “There are currently no checks being done within the council to confirm the existence of its staff.
“There was a failure by departments to provide timely information to HR/payroll regarding leavers and as a result, individuals were overpaid.”
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The auditors have since noted that further controls and training had been put in place by the council, and new procedures and processes are being built into the system.
They also recommended there should be an establishment check for the whole council, performed by employing departments at least once a year, “to verify the existence of staff on the council’s payroll”.
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Money being recovered
Highland Council said anticipated recommendations from an internal audit will be implemented to prevent or mitigate the risk of future overpayments.
A spokesperson said: “These overpayments were identified in tax year 2022/23 and, in line with council policy, recovery of the overpayments is taking place.
“Reporting procedures and guidance for leavers has been reinforced to managers and will be reviewed and reported to the audit committee during 2023/24.
“Furthermore, it is anticipated that internal audit will make recommendations which will be implemented to improve practices and prevent or mitigate the risk overpayments in the future.”
