Uncovering a Payroll Fraud in an Outsourced Manpower Audit

Kashish picked up this audit at EY India as a standalone workstream, responsible for the process from data gathering through to final escalation. The subject was outsourced manpower at an automotive manufacturer's factory: a category where the company disbursed salary to an agency, which then paid individual workers.

He started by building a tracker of every data point he needed to cover the audit end to end, listing potential gaps upfront so nothing would be missed. Once the data was in hand, he ran a series of checks: comparing employee attendance records against salary disbursements, and then sampling directly with employees to confirm whether they had actually received what the records showed.

The checks surfaced a discrepancy. The agency representative was drawing more salary than the amounts owed to workers, a clear case of misappropriation. Kashish documented the instances and prepared the evidence before raising it with anyone.

He escalated in stages. He first presented the findings to the payroll department, walking them through the specific sample cases and the evidence behind each one, and secured their acknowledgment. With that buy-in, he took the same package to the CFO: the issue, the sample evidence, and the responses already gathered from the agency and the internal department.

The company acted promptly. The agency representative was removed, and the company put harder controls in place over the outsourced manpower process. The matter was also referred to the courts.