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Employers
must guard against worker theft
Published 08/13/04
Worker theft accounts for a substantial
portion of employer loss due to crime and employers' need to take
precautions to minimize the loss.
Embezzlement of funds
by a worker with access to the company bank account can go on for
years undetected and can be quite costly to an employer.
The most basic example
of this is when someone with check writing authority on the company
account writes checks to themselves then also having first access
to the bank account statements when they come in, destroys the processed
check(s) payable to themselves that are enclosed with those statements,
and enters a false payee into the company's records so that those
payments appear to be to legitimate suppliers or vendors of the
company.
A simple procedure to
minimize this type of theft is to direct the company’s bank
to send all bank statements directly to the house of a trusted officer
in the company who does not have check-signing authority and who
does not enter the accounts payable into the company's records.
The officer upon receiving those bank statements will review them
for any irregularities, and once reviewed will turn them over to
the company’s accounting department for processing and recording
in the ordinary course.
Another source of worker
theft is in equipment and supplies. Sporadic, unannounced, internal
inventory audits of equipment and supplies usually turn up any irregularities
that then can be investigated further as necessary. As for expenses,
it is appropriate to require receipts and expense reports for expenses
over a particular dollar amount to be prepared by workers prior
to reimbursement. It would again be prudent to conduct sporadic,
unannounced internal audits of an employee’s expense reports
to confirm that receipts submitted for reimbursement on expenses
incurred on a business trip coincide with the date and location
of such an actual trip.
All of these protective
measures not only may catch a dishonest worker before he has an
opportunity to further damage the company, but also act as a deterrent
for those who may be so tempted to consider stealing from the company.
Employers should understand that not all worker embezzlement matters
are criminally prosecuted and several are handled with private and
confidential restitution agreements between the employer and the
worker. These agreements do not become public so long as the worker
complies with the payment schedule of the restitution agreement
with the victim; the employer.
Since many owners of a
company, after terminating a dishonest worker, are more interested
in restitution than the retribution, such agreements often make
sense. However, this highlights the fact that such thefts, while
in no manner commonplace, are more prevalent than as published in
the media.
Employers should take
heed that they are not immune of being victim of such thefts and
should govern themselves accordingly.
J.
Daniel Marr is a director and shareholder
at Hamblett & Kerrigan, P.A. His legal practice includes counseling
businesses and business persons on a variety of legal issues, including
employment, and advocating on their behalf. You can reach Attorney
Marr by e-mail at: dmarr@hamker.com
This information is general
information and may not reflect the most current legal developments,
verdicts or settlements. The information provided should not
be relied upon as an indication of the actual state of the
law or of future developments. The information contained on
the Hamblett & Kerrigan website is for informational purposes
only and does not constitute legal advice. If the information
referenced may be of legal importance to you, you should consult
with an attorney to provide you with legal guidance and opinion
as the the effect of the current law upon your situation. |
