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Fraud in your practice

Yesterday, Yvette and I attended the annual Women in Business Spring breakfast here in Wagga Wagga and I was a little shocked at a statistic shared by the guest speaker, the Honorable Michael McCormack, Minister for Small Business. In his address on small business across Australia, he stated that 15% of employees will steal from their workplace – either money, or products; 15% never will, and the remaining 70% might. They are higher fraud statistics than I ever thought.

No one likes to think that a staff member will commit fraud in the workplace, and I know that I always like to assume the best in people.

The definition of fraud is when someone dishonestly obtains a benefit by deception or other means. Examples can include theft of money paid to the practice for services (often a little over time so it is not noticeable); theft of products that you might stock to on-sell to clients; theft of stationery; faking time sheets; using the practice credit card for personal use; or use of company property for personal benefit that has not been authorised. So, how can we prevent this from happening in our workplaces?

There are three parts to managing the risk of fraud in your workplace.
a) Prevention
b) Detection
c) Response

Talking specifically about prevention, here are some strategies that you might like to think about in your practice:

1. Taking a zero-tolerance approach is a good start, and communicating this to your team. A policy the outlines acceptable and nonacceptable behaviour is important, as well as detailing the consequences that might occur should fraud be committed.

2. Ensure you lead by example and adhere yourself to the policies and procedures you have set for your team. Creating a positive work environment that encourages employees to act in the best interests of the practice is important – and this can include having clear visions, organisation structure (who reports to who), clear job expectations, fair employment, and good open channels for communication.

3. Assessing the current risk of fraud occurring in your practice. In an allied health practice, one person often wears many hats. This can make it difficult to mitigate the risk of fraud, when the same person collects the mail, completes the banking and handles payments. In this instance, try to set up a system where the person who collects the mail and processes payments, is a different person who checks the banking if possible. This may include stock control measures to ensure your products aren’t going missing, or ensuring that any staff that has access to money or bank accounts, are well-trained and there are processes in place to mitigate removal of money (for example, dual signatures on cheques, and dual security for bank transfers). Any employee handling finance should be closely supervised.

4. Perform regular accounting practices to reconcile your books (I would suggest at least monthly) and ensure that the person performing the reconciliation is different from the person performing the banking.

Even with these checks in place, fraud can still happen of course, but by thinking about it and implementing preventative measures you are decreasing the risk.

Tags: Staffing, Procedures, prevention, fraud