Centium was recently engaged by a large NSW
Government agency to assist with the review and re-calculation of their motor
vehicle employee salary package reconciliations over the past two years. These
vehicles are packaged on a business/private usage basis rather than as novated
leases.
We found that:
- Spreadsheets used by the agency were developed
in-house rather than applying available NSW Government templates for this task
- In-house spreadsheets had extensive formula errors,
and a number of the standard factors that apply to the annual vehicle cost calculations
were incorrect
- There were numerous instances of incorrect data
entry when compared to source documents (e.g. vehicle base value, lease costs,
and relevant package dates
- Vehicle business usage percentages were not
supported by employee maintained running sheets, in contravention of NSW
Government guidelines.
- Inadequate fleet records had been maintained to
verify employee advice of the return of the packaged vehicle to the agency
fleet for short leave periods
- FBT liabilities were incorrectly calculated.
Over 100 individual vehicle salary package
reconciliations were performed resulting in an increase in employee payroll
payments. Fortunately for the agency concerned, there was minimal requirement
to recover overpaid moneys.
Agencies
need to:
- Introduce systems and put processes in place to
check / double check motor vehicle calculations to minimise the impact on
employees
- Ensure that motor vehicle salary package tools and
methodologies are consistent with NSW Government guidelines
- Implement systems and processes to ensure that
employees with motor vehicles are completing “running sheets” in accordance
with NSW Government and ATO requirements
- Maintain accurate and complete records regarding
motor vehicle package arrangements.
How
we can help
Centium’s recent recommendations will enhance the
efficiency and robustness of the agency’s reconciliation process in future.
Accordingly, we can offer our services to provide advice, lend a “fresh set of
eyes” and assist with undertaking motor vehicle and/or specialist taxation
reconciliations.
For more information, please contact Penny Corkill, Director. Penny is an experienced HR & OD professional and qualified internal auditor.
