Provider Loses $920,004 in Timesheet Fraud, 41 Employees Arrested

In January 2019, 41 individuals were charged in a nearly $1 million overtime kickback scheme that carried on for 21 months before external accountants spotted a potential massive payroll leak. Four supervisors were detained in prison on bail. 

The supervisors manually altered timesheets to inflate hours at group homes that were not worked, resulting in overtime payments to employees, who in return, provided kickbacks to the supervisors (including a used BMW). Individual employees received overpayments up to $22,117 during the period of the scam. 

The problems appear to result from lack of attention or ability to track hours worked vs. budget on a pay-period-to-pay-period basis by group home or other cost center and the percentage of edits.

The provider was using a general purpose time and attendance system from its payroll provider. Typically these systems do not provide the controls and ease of auditing features Agency Workforce Management provides to agencies. 

For more information on key metrics providers should check download this eBook, 9 Operational Metrics Agencies Should Monitor.