Payroll Fraud Detection in Synthetic HR/ERP Graphs: An Inductive Comparison of Rules, Path Features, and Graph Neural Networks
Organizations: University of Massachusetts Amherst · Accentrust · Georgia Institute of Technology · Duke University ·
Abstract
Payroll-fraud screening requires finding hidden employee--payee links while distinguishing suspicious relationships from legitimate ones. We formulate this problem as inductive link prediction and entity ranking on synthetic human-resources and enterprise resource planning (HR/ERP) graphs, with unseen organizations and a matched benign twin for every planted case. An original study on 24 held-out organizations and a prospectively frozen extension compare analyst rules, explicit path features and graph neural networks (GNNs). A tuned gradient-boosted model on chained-join features achieved the highest overall link average precision (AP; 0.823), above the GraIL-style GNN (0.663); its 4-hop AP was 0.646 versus 0.272. Thus, the observed multi-hop gain is not specific to GNNs. On a new synthetic cohort with 2.0% positive entities, chained-join boosting again led (AP 0.798); the relational entity GNN also exceeded record-aware rules (0.707 versus 0.504). At a 2% review budget, their precision was 0.695 versus 0.602. Under 40% failed identifier joins, the entity GNN ranked above chained-join boosting (AP 0.712 versus 0.683, descriptively). Structure-only auditing exposed a shortcut in the initial generator; matched twins reduced the audited twin-pool AUROC to 0.493--0.514. These results separate multi-hop candidate discovery, record-based discrimination and review prioritization within an explicit synthetic evaluation design. Code and data are available from the authors on request.
Figures & tables
| pattern | audit test (control checked) | entity | hops | planted evidence chain |
| ghost employee | ghost-employee test (activity vs pay) | new hire | 1, 3 | paid in runs with no activity, reports to ; h1: is also the hiring approver; h3: pay account held by ’s EC |
| shared payroll account | shared-account test (account uniqueness) | new hire | 2, 3, 4 | h2: same account as ; h3: account holder is ’s EC; h4: holder lives at ’s address |
| employee–vendor account | employee–vendor test (conflict-of-interest declaration) | new vendor | 2, 3, 4 | h2: vendor account equals ’s; h3: holder is ’s EC; h4: holder shares ’s phone |
| employee–vendor contact | employee–vendor test (conflict-of-interest declaration) | new vendor | 2, 3, 4 | h2: vendor address or phone equals ’s; h3: representative lives at ’s address; h4: representative shares a phone with ’s EC |
| approver link | approver–payee test (four-eyes approval) | new hire | 2, 3 | hired by ; h2: shares ’s address or account; h3: a person at the hire’s address is ’s EC |
| account change before run | bank-change test (call-back verification) | hire or vendor | 2, 3 | bank details changed at most 3 days before a run; h2: to ’s account; h3: to an account held by ’s EC |
| stage | data and prior visibility | role | selection and inference |
| Original | hrgraph-004; no prior test output | 24 held-out organizations | Dev-fixed models; five recorded tests |
| Diagnostics | Original written scores and truth | Seed, twin, prevalence and SoD analyses | Exploratory, no training |
| Extension A | hrgraph-004; original results visible | Multi-hop/non-GNN and generic-rule comparisons | Dev-selected GBDT; reused test |
| Extension B | New hrgraph-005; no prior cohort output | 2.0% positive-rate ranking and review budget | New cohort, same generator; retraining |
| Extension C | hrgraph-004; original results visible | Failed joins and missing records | Clean-dev training; reused test organizations |
| id | dev difference (point) | dev direction | test difference [95% CI] | test outcome |
| H1-h2 | 0.034 | no | 0.208 [ 0.262, 0.150] | not supported |
| H1-h3 | +0.405 | yes | +0.420 [0.375, 0.469] | supported |
| H1-h4 | +0.286 | yes | +0.272 [0.219, 0.337] | supported |
| H2 | 0.061 | no | 0.122 [ 0.151, 0.094] | not supported |
| H3 | +0.087 | yes | +0.053 [0.025, 0.086] | supported |
Appendix figures & tables1 asset
Supplementary material from the paper’s appendix.
Appendix
| pattern | hop | entity | link |
| account change before run | 2 | 48 | 48 |
| account change before run | 3 | 48 | 48 |
| approver link | 2 | 48 | 48 |
| approver link | 3 | 48 | 48 |
| employee–vendor account | 2 | 32 | 32 |
| employee–vendor account | 3 | 32 | 32 |
Financial Fraud Detection
Financial fraud detection identifies suspicious transactions, accounts, claims, and behavior to prevent losses and guide investigation.
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