Yesterday, as part of CRT’s ongoing Business Continuity Plan, I was looking for an alternate vendor for a product we use. When I found one, I googled their name and the town in which they are located. What a surprise!
The first item on the list was a news article about an arrest made at that company for embezzlement. I read further and found that four employees were arrested. The ringleader seemed to be the bookkeeper that had worked there for ten years, embezzling from the start, and was she crafty!
Her electricity provider was the same as the company’s, so she combined the bills, paying hers with company money. She did that for numerous bills; paying for a lawn service, cabinets that were built for a company her husband owned, and soon she was benevolently paying the bills of other employees. The company was doing well, and the bookkeeper was a trusted long-term employee, so no one looked very closely.
The article didn’t divulge how the crime was discovered, but four employees were arrested and jailed. The exact amount stolen had not been determined, but was considered to be substantial. I would imagine so, since 10 years had went by with access to the money, and no one ever really examined or questioned the books.
With that in mind, the following steps are included in our Business Continuity Plan:
Make sure your bookkeeper takes a vacation EVERY YEAR and you do the work during that time.
At least once a year, YOU print out the full list of payments made and randomly check them against bills.
Hire an outside firm to send your monthly reports.
Maintain access to the company’s online banking, and check it at least once a month for unusual names or payments. The checkbook register is not adequate for this because anything can be written in the register, but the bank will post the true and correct payee and numbers.
Oversee the payroll records each quarter to detect any unauthorized bonuses or pay increases.
When you are presented with a stack of checks to sign, read each one, ask questions, and ask to see the actual bill once in a while.
We conduct background checks before every hire, and you might consider that as well. Also consider having employees who handle the money bonded, and think about special insurance coverage for employee criminal activity. Be thorough! We trust the people we hire, otherwise we wouldn’t hire them.
Perhaps you have a similar experience, or other steps you take to insure money is handled properly. If so, please leave your stories below.
Patricia Burkhart is the executive director of Controlled Release Technologies, Inc., a research, development and manufacturing firm based in Shelby, North Carolina. CRT is an IFMA CSP, EnergyStar Partner and manufacturer of independently-certified Green products for HVAC maintenance. Since 1986, CRT has been creating leading edge HVAC maintenance products that have become industry standards, used in thousands of commercial buildings world-wide. CRT employees are members of BOMA, ASHRAE, ASHE and the American Chemical Society. www.cleanac.com (800) 766-9057.