Falsifying attendance records
In a construction project of a commercial complex valued over $500 million, the main contractor employed ten foremen to monitor the work of sub-contractors. A site engineer of the company, who took charge of the foremen, was responsible for the overall supervision of the project.
The salaries of the foremen and other workers were calculated on a daily basis. Each of them was required to punch an attendance card when reporting on and off duty every day. The attendance cards and the punching machine were placed in the engineer’s office so that when the foremen and other staff reported on or off duty, they had to punch the cards in the engineer’s office. The engineer was responsible for ascertaining that his subordinates personally punched the cards. At the beginning of each month, the engineer was responsible for calculating the salaries of his subordinates based on their individual attendance records for the previous month. His calculations and the punched cards were then sent to the Accounts Department of the company for processing salary payment.
As the family of one of the foremen, CHAN, was in the Chinese Mainland, CHAN would seek every opportunity to travel there to visit his family. One day, CHAN went to see the engineer and requested for three days’ off. CHAN, however, requested the engineer not to record his leave but instead punched the attendance card for him so as to show that he was working on the three days. In return, CHAN offered the engineer $500 for assisting him in punching the attendance card and turning a blind eye to his absence.
The engineer turned down the offer and reported the matter to the ICAC. Eventually, CHAN was convicted for offering a bribe to the engineer, contrary to Section 9 of the Prevention of Bribery Ordinance (POBO) and was sentenced to imprisonment.
Case Analysis
The foreman, CHAN, offered an advantage to the engineer (i.e. an employee and hence agent of the construction company) as a reward for assisting him to falsify attendance records, contrary to Section 9(2) of the Prevention of Bribery Ordinance (Cap.201) (POBO). Irrespective of whether the engineer accepts or rejects the bribe, the act of offering (by CHAN) already constitutes a criminal offence. Should the engineer have accepted the bribe, the engineer would have committed a corruption offence and be charged under Section 9(1) of the POBO. In addition, regardless of whether the engineer accepted the bribe, if he assists CHAN in falsifying the attendance record, this would amount to an offence under Section 9(3) of the POBO. This provision stipulates that it is an offence for an employee to use any false document, receipt or account to deceive his employer. Improper ethical behaviour may also lead to the revocation or suspension of a professional registration with a professional body and as a result the engineer would be restricted/prohibited from practice.
Case in Perspective
The lack of supervisory control and reliance on a manual tracking system over localised staff attendance create opportunities for personnel to abuse delegated authority, engage in unauthorised absences, commit payroll fraud, or offer bribes to secure the collusion of checking officers. To address this problem, the main contractor should establish a system to strengthen attendance tracking and staff administration by implementing the following control measures –
(a) Eliminate susceptible manual systems and implement a digital attendance management system (e.g. fingerprint or facial recognition);
(b) In the interim, supplement manual systems with CCTV to authenticate staff presence, deter impersonation and provide verifiable records of attendance; and
(c) Conduct surprise on-site spot checks and physical headcounts to verify real-time worker presence by supervisors and/or independent units.
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