PT the Auditor
Ghosts in the Garage
Ghosts in the garage? Sounds like something our editor JVH would write about in his “Death by Parking” series. But ghosts can be a problem – ghost employees, that is.
It works like this. Let’s say your operator has 10 employees in your garage. One employee goes to the manager and resigns; she is moving to Colorado. Fair enough. Except that the manager neglects to mention to his company that the employee has left. Each pay period the manager receives the check for the employee and simply cashes it in the daily cash receipts and keeps the money.
A few months ago, I was called in to audit a facility where there were 10 on-site employees but 13 on the payroll. I gather the operator discovered the problem when an ex-employee received her W-2 and there was considerably more money on it than she actually was paid. Of course, this affected the former employee’s tax liability, and she wanted it straightened out.
This little scam works best in larger operations where there is turnover. It is difficult to notice when a person quits and another is added. The numbers do change all the time.
Imagine the operator’s surprise when they checked and found that the employee was still receiving paychecks even though she had been gone from the company for almost a year.
The operator immediately ‘fessed up to the problem; however, the owner was concerned that if there was a problem with the manager in this area, there might be problems in other areas as well.
A decade or so ago, I took over a large urban garage in a large southwestern city. This place had 7,500 spaces, 10 exit lanes and 40 employees. I decided that I would meet each employee and talk about their duties and responsibilities.
I checked the time cards and knew who was on duty. I called a supervisor and asked that cashier Susie come to my office. After 15 minutes, I decided that she didn’t get the message. I knew she worked in lane five, so I walked out to the lane and was told it was closed and she was in the restroom. I got a call I needed to take, so I returned to my office. Thirty minutes later, I went back out to the lane and was told she was on break.
I opened the lane and collected money and tickets for about 45 minutes until Susie came running up, breathless. It didn’t take too much interrogation to discover the story.
She and the supervisor were having a “relationship.” The supervisor told her that on certain days she didn’t have to come to work, but that he would log her in and out and cover for her. The “restroom, break” story fed to me was to give her time to come in after a panic call from her “friend.”
Needless to say, we had two new employees at that location.
Ghost employees cost a lot more than just their salaries. You have to assume that all their benefits, taxes and the like are still being paid. If a person is making $12 an hour, the actual cost to the operator, and hence the owner, is probably closer to $18 an hour. And who knows, if the manager is fast enough on his feet, they could receive overtime, too.
This is not a difficult problem to solve. When I was city manager for a major operator, I would hand-carry paychecks to a number of garages each payday and personally hand out the checks, checking IDs as I went. If there were any left over, I knew I had a problem.
Payroll audits must be included in all reviews of a garage’s operations. Unfortunately, some operators might not be as careful in maintaining their payroll operations as they should be, since it’s not their money but the owner’s money that is being stolen.
Operators should have strict policies on hiring in their locations. Approval must be given for new hires, and records kept of just how many people are authorized to be hired at each garage. Keep one thing in mind: A location may be authorized to have 20 employees but can run well on 18. Just because you are sending out 20 paychecks and 20 people are authorized to work there doesn’t necessarily mean that 20 people are actually working on the site.
I also recommend that time clocks are rigged to work only when the employee inserts their access card. Although this won’t stop all cheating, it will make it more difficult. When you audit time cards, check to see if cashiers are signed on to their cashier terminal and whether there is activity in the lane for the time that the person is clocked in.
Nothing, however, beats the person-to-person touch. Walk down to your garage and tell the manager you want to meet all the on-duty staff. Tell the manager you would like a list of all who clocked in so you won’t miss anyone. Then go with the manager to each workstation, introduce yourself and chat a bit with the parking operator’s employees.
You will quickly discover whether or not you have a problem. And who knows, you might meet some really nice people.
Article Abstract from November, 2008