Staffline is conducting an investigation into its recruitment unit after ‘concerns’ regards invoicing and payroll practices.
According to a statement from the firm, the Board became aware of the issue on Wednesday morning and said it would launch an investigation alongside auditors PwC.
The news comes one day after shares at the firm crashed by 33%. The result of the company delaying its annual results after senior management learned of the payroll allegations. A company statement added:
“Given the nature of the allegations, the preliminary [annual] results will not be published until the matters have been fully investigated.”
Although Staffline reported early this year that they expected revenues to top the £1billion mark, they also expect to report a net debt of circa £63million.
It is also only several weeks since the company posted news that it had been awarded £100m in contracts to oversee prison education.
However, according to Telegraph reporting, the division of Staffline that had been awarded this contract had experienced historical difficulties relating to both its debt levels and fraudulent staff.
PeoplePlus, which prior to being purchased by Staffline was known as A4E, had subsumed costly losses after Government programme restructuring resulted in lost revenue for the division.
Furthermore, before its acquisition by Staffline, several A4E staff were jailed for fraud after pocketing hundreds of thousands of pounds taxpayer cash on the back of false claims they had helped people into work.
Recruitment Grapevine has always followed poor payroll practice closely. Last year, it was discovered that outsourcing payroll to an umbrella firm meant workers at one agency were left out of pocket.
The news garnered national attention with big questions asked of the firms involved.
Staffline recruits for roles for firms such as Tesco, M&S and Hotel Chocolat.
If allegations about malpractice are found to true the company expect that they “could have a material impact on the group and its profitability,” according to the statement released to press.