Salary Discrepancy During EPF Inspection: How Can We Reconcile the Differences?

Respected seniors, good afternoon to all. Our company had an inspection of EPF held on the date of 16/01/2012. We prepared all the documents needed for that inspection, such as Form 9, 5A, 2, 5, 10, 12A, 6A, 11, challans, wages, and salary register, etc.

However, we encountered a problem when comparing the wages and salary on the balance sheet with the actual amounts. In the balance sheet, the salary is listed as 6200000 lakhs, whereas in the registers, it shows 2200000 lakhs.

Request for Suggestions on Salary Reconciliation

Seniors, we seek your suggestions on how to reconcile or match the salary amount with the balance sheet. Please help me. I am waiting for your suggestions.

Dear Dheeraj, Me believe there is a problem with the accounts department regarding the entry in the accounts books. You need to check with the accounts team regarding the entries made by them.

Please verify whether you are referring to CTC, Gross, or Net, and then cross-check with the accounts department about their entries.

I recommend hiring a local consultant to resolve this issue, as the P.F. may impose a penalty if the entries do not match.

Regards, Kamesh

Please verify the figures from the Accounts Department. In the balance sheet, the figures have been shown after adjusting for tax deductions, etc.

Regards,
A.S. Patil

Respected sir, I am sharing some information regarding the problems. We have two contractors who have worked, but in actuality, both are not covered under the contractor act, meaning they do not have a license. The main issue is that both contractors receive a significant amount annually, but the entire sum is recorded under only one contractor's name. How should we divide this amount in the registers?

I am awaiting your sincere response because we need to finalize the date of the audit by coordinating with the PF officers. Thank you.

First of all, tell me how the balance sheet was prepared. As far as my knowledge is concerned, the salary and wages defined in the salary register can only be taken in the balance sheet. But if the booked amount is higher than the registered amount, then it seems that all the miscellaneous expenses and other expenses were booked in the salary and wages option. Ask your accounts department to define the difference in the amount. If they are unable to explain the same, then you are hereby requested to call me. I will definitely help you with the little knowledge I have.

Thanks and Regards,

Sumit Kumar Saxena

[Phone Number Removed For Privacy Reasons], [Phone Number Removed For Privacy Reasons]

1) Sit with the Accounts Officer and discuss the issue with him frankly to understand how the balance sheet is prepared. 2) Call the contractor to assist you with the issue and obtain details about the actual payments he received. You have the right to call him, and it is his responsibility to help you resolve the issue. 3) Ensure the entries in the Accounts Department are correct and cross-check them for each individual month with the salary/wages registers maintained by HR.

Regards, Kishore

Dear Dheeraj, maybe there is a problem with the accounts department. Please check the books of accounts to see how they are being maintained on a monthly basis.

Please check the salary against the balance sheets to confirm if it is based on CTC or not.

Additionally, please verify the payments made to contractors, whether they are on an NMR or MR basis.

Lastly, ensure that if your employees are appointed from an outsourced agency, all liabilities will be handled by the accounts department.

Regards,
Ramakant Sharma

Action Required: Statement of Challan and Salary Verification

Please prepare the statement of the challan deposited and verify the salary and wages with the accounts department. Segregate the balance amount and check how much is left for non-compliance. Then, discuss this problem with your management.

Thank you.

Dear Dheeraj,

In response to your query, significant differences are observed in the salary account. It is important to note that the account includes all perks in the salary heads, but the PF effect applies only to the Basic and VDA parts. Therefore, I recommend comparing the monthly data from the salary register and the account details.

With regards,

Umesh Rai
Noida