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Accounting error sees worker overpaid $500k

Adam Zuchetti
Adam Zuchetti
29 August 2018 1 minute readShare
cash, money in a pocket

The overpayment of a public servant by almost half a million dollars has served as a warning to all employers and payroll masters to double check the value of outgoings being made.

The situation was revealed in the August 2018 Report to the Legislative Assembly by the Auditor-General for the Northern Territory, as part of a bi-annual audit of government expenditure.

According to the report, a simple administrative error with an erroneous decimal point led one public servant to be overpaid by a staggering $487,254.

“A Senior Payroll Officer at DCIS checked the message within the Transaction Message Report however the payment was processed with the employee subsequently being paid $492,176.00, instead of $4,921.76,” it stated.

That payment was made on 21 September 2017. But there was a delay of almost one month in the funds being returned, as authorisation to do so was required in a bank branch, and the remote employee could only do so when they were able to attend their nearest branch.

“The overpayment was returned in full on 16 October 2017.”

Had the error been replicated for an entire year, that would equate to just over $5.9 million, instead of an after-tax salary of $59,061.

It appears that wage overpayments are a fairly common occurrence in the Top End, with an entire section of the report devoted to salary overpayments.

This does not include instances were the monies are quickly reimbursed, with the report noting that, “Salary overpayments recouped within the fortnight, or where there has been an immediate undertaking by the payee to return the money, are classed as ‘salary adjustments’ not ‘overpayments’”.

The Auditor-General cautioned that more vigilance is needed in regards to the payment of salaries and other outgoings.

“My review of the data related to salary overpayments highlights the necessity for the entity to be vigilant at all times, the report said.

“As the overpayment affects the entity, the entity has a responsibility to ensure financial los[s]es are recovered in [a] timely manner.”


Accounting error sees worker overpaid $500k
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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