Handling Employee Money Transfer Mistakes: How Do You Balance Accountability and Support?

Handling Employee Errors in Financial Transactions

In the situation where an employee transfers money to the wrong account due to an oversight, it is essential to address this issue promptly and appropriately. Firstly, the employee should be notified of the error and asked to provide an explanation for the mistake. Depending on the circumstances and the employee's track record, disciplinary action may be necessary. This could range from additional training on financial transactions to more severe consequences if the error is deemed to be a result of negligence or misconduct.

Furthermore, it is crucial to review and potentially improve internal processes to minimize the risk of such errors occurring in the future. By analyzing what led to the incorrect transfer and implementing preventive measures, the organization can mitigate similar incidents going forward and ensure compliance with financial protocols.

Overall, handling such situations with a mix of understanding, accountability, and process improvement can help maintain trust and integrity within the workplace.

Thank you.

Dear Sandhya Prajwal,

While raising the query, not providing adequate information is often an issue on this forum, and you seem to have followed that trend. Please confirm the following details:

a) Who was the employee in question? What is their designation? Was the transfer of funds part of their duty?

b) The account to which they transferred the funds incorrectly, was it your company's account, the employee's, or someone else's? What was the value?

c) Who discovered the incorrect transfer of funds, and how was it discovered? After how long was it discovered?

d) Has the fund transfer been reversed? How many days or weeks did it take for the reversal of the funds?

e) Did the employee in question commit the same lapse earlier?

f) Did the incorrect transfer create an embarrassing situation for the company? Was there any customer dissatisfaction?

g) In the fund transfer activity for the company, two employees are usually involved. How come only one employee was involved in this case?

h) Do you have sufficient proof to say that it was done out of oversight?

We, the members of this forum, are outsiders. Unless we get a complete idea of what has happened in your company, we cannot provide our opinions. Nevertheless, you may issue a show-cause notice to the employee. Based on the employee's reply and the answers to these questions, your management may take suitable disciplinary action.

Thanks,

Dinesh Divekar

Hi Dinesh, thank you for the response. This is the first incident. It happened at the time of salary transfer. The HR executive was supposed to provide the correct account number of the new joiner, but it was incorrect by just one digit. It was a typo error; hence, I said it was an oversight.

When the employee returned after a week, saying he hadn't received the salary yet, we noticed the incorrect account number mentioned, and the person to whom it was transferred is unknown. They immediately withdrew the funds (Rs. 12,500).

We discussed the incident with the bank. The bank has blocked that account, but the amount is still not reversed.

The new employee was upset, so I had to apologize to him. This creates a wrong impression, and he may lose confidence in the company and HR.

As an action against the HR executive for ignorance, written feedback is given.

I wanted to understand what actions others take during such situations when HR themselves make errors.

Dear Ms. Sandhya Prajwal,

If the fund transfer took place to a wrong account, though inadvertently, you mentioned that you have "discussed" the matter with the bank authorities. However, in such cases, for the reversal of the funds, a letter from the MD on the company letterhead is required to be sent to the bank authorities. If sufficient funds are held in the recipient's account, then the bank authorities reverse the fund transfer immediately.

Anyway, now the bank has blocked the bank account. However, you should send an official letter to them asking them to send an official letter to the recipient of the funds. He must refund the amount. Mere blocking of the account is not sufficient. The action has to be backed by official correspondence.

If the new employee has not received the salary because of the diversion of the funds to the wrong account, then your company should have paid him the salary anyway. Because of someone's wrongdoing, disbursement of salary to him cannot be held to ransom. If the salary is not disbursed, then do it immediately.

Initiating Disciplinary Action Against HR Executive

Your main query was on initiating disciplinary action against the HR Executive for doing the wrong fund transfer. However, here there appears to be a system's failure more than the person's failure. The cause of the incident is the lack of accuracy checks on two counts. Firstly, whenever a new employee joins, and whenever the account details are uploaded to the bank account, why was the accuracy check not done? Secondly, for the disbursement of the salary, when the salary rolls were sent to the bank, why was the accuracy check of the new account holder not done?

This is an HR department's failure. For convenience, you cannot make the HR Executive a scapegoat and cover up the matter. At the senior level, someone must take moral responsibility for what has happened.

Thanks,

Dinesh Divekar

There is no harm in issuing an advisory letter to the concerned employee citing this incident, advising them to be more vigilant in the future. Moreover, you should devise a system to ensure that this does not happen again, as it maligns the image of the company before a newcomer.