Kelli W. Vito

Internal auditors are beginning to recognize that there are major organizational risks and costs associated with administering compensation and benefits programs, and are adjusting their efforts according. Inappropriate management of salary and benefits costs, which often make up a large portion of the overall budget, can have a significant financial impact on an organization. Additionally, the numerous laws governing compensation and benefits administration make compliance a key concern.

Human resource (HR) management covers a broad spectrum of workforce activities. Despite its integral role, HR is often considered a soft area and management may not understand the inherent risks involved with this function, including employment law issues, compensation and benefit plan design, recordkeeping, and potential fraud issues.

There are clear risks in administering employee management programs. Numerous laws govern human resources HR administration, making compliance a key concern. However, there is also a vital strategic component of employee management. In today s environment, key issues include training employees in a struggling economy, increases in fraud incidents, management/union relationship strains, and the baby boomer exodus.