How to spot and prevent fraud in your HR department - Krowme


How to spot and prevent fraud in your HR department

You may have come across this Straits Times article: Former HR exec jailed 4 years for cheating firm of S$454,000 using ex-employees’ payroll details, where a HR executive, tasked with maintaining her employer’s payroll system, exploited a loophole where she discovered that workers’ data would still remain in the system even after they have resigned. She transferred almost S$500,000 to her own bank accounts over a span of one-and-a-half years.

There were some issues that we could identify with the company’s HR and Payroll processes that could have prevented the crime committed by the HR executive.

Issue 1: Too much access was given to the employee

“She had joined the firm in April 2018 and her duties included handling the payrolls of employees and construction workers and being solely responsible for maintaining the company payroll system, which was linked to the firm’s account with United Overseas Bank.

For the employees’ payroll, Fu was involved in recording salaries and transferring money from them back to the company for certain expenditures that were not covered by the company.

The finance department would tell Fu about the amounts to be clawed back from staff members.

Except from Former HR exec jailed 4 years for cheating firm of S$454,000 using ex-employees’ payroll details

It seems that the employees are using the company credit card to make various payments, after which, the HR personnel will need to do a check to see which expenses should be covered by the company. She will need to then reach out to the employees to claw back the expenditure.

This leads to time wasted and high chances for human error and loopholes, eg. the HR personnel could have gotten the expenditure back but failed to report this and kept the money for herself instead.

To prevent such issues from happening, instead of employees using the company credit card (after which a HR personnel needs to double check to ensure that expenses are valid and then chase employees to return the cash), we recommend that employees always make payment first through a Claims platform like OpensoftHR eClaims, and then submit claims for the payments made.

This ensures that all claims are being tracked in a system and all the HR personnel needs to do is check that all the claims are valid and only do payroll for claims that are valid.

Issue 2: Employee took advantage of the loopholes of a poor payroll system

“As for the construction workers’ payroll, she was involved in salary payments to those from Formwork’s subcontractor, Yong Tai Construction, whenever Formwork needed extra manpower.

Formwork did not pay these workers directly but would issue a cheque to Yong Tai for their salaries.

Fu soon realised that the names and addresses of some employees remained in the system even after they had resigned.

She then modified these employees’ payrolls, such as by keying in certain amounts to be transferred to them. Shve also keyed in money to be transferred to Yong Tai’s workers for their salaries, even though Formwork would issue a separate cheque for the salaries.

Except from Former HR exec jailed 4 years for cheating firm of S$454,000 using ex-employees’ payroll details


In today’s day and age with higher standards of living, we should not simply just rely on an individual that we trust based on gut feeling to handle Payroll Matters manually. 

It also takes a lot of work to manually ensure that employee data is always up to date as the HR personnel will need to take note of:

  1. All the no pay leaves (or worse, the no pay time off which is calculated in hours instead of days)
  2. Overdue claims
  3. Ensuring that resigned staff are removed from the system.

All of the above points can add up and may lead to loopholes in the system. Handling payroll matters manually also increases the risks of human error. We should take all precautions to ensure utmost security when it comes to Payroll. Also, why put in all the time and effort when an automated software can easily take that load off you, so you can focus on more important stuff you have on hand.


How does using a well-designed HRMS/Payroll Software help prevent unwanted issues like leaking of information, human errors in money management or money theft from occurring?

Security is held to the utmost standard

At OpensoftHR, we have a team that does constant checks and upgrades to ensure that the system is kept secure. This prevents loopholes and hackers from accessing the system.

Payroll and Human Resource/Self Service Systems are on 2 separate platforms:

To further prevent loopholes and hacking, the OpensoftHR Human Resource System and Payroll System are on two different hosting platforms. This means that anyone who only has access to the Human Resource System (this is where the employee submits claims, leaves etc) will not be able to have any form of access to the Payroll system. The Payroll system can only be accessed by the Administrator and the staff who is in charge or Payroll.

Any updates on the HRMS can be automatically synced to the Payroll system:

Whenever an employee has resigned, applies for leave, or has an approved claim: ALL updates can be linked & updated to the Payroll system. This greatly reduces any manual updates or any room for human error, which ensures a much cleaner and streamlined process where the employee data is always up to date.

We hope that this article helps you understand why it is important in this day and age to have a good HRMS and Payroll System in place.

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