In our last blog, we spoke fraudulent payroll schemes. So, what’s an employer to do?
Start by removing the opportunity. This is particularly important for small business as they are typically not prepared to prosecute for reasons as varied as wanting to avoid any “bad press” or having no expectation of being able to recoup losses.
Five Tips to Help Prevent Fraud
With the foregoing as our frame of reference, here are the top 5 tips to help prevent fraud.
- Perform pre-hire background checks that include criminal history, civil history and driver license violations. Additionally, verify education, past employment, references and the applicant’s written consent to a credit check.
- Internal controls can include:
· A stated zero tolerance policy for theft no matter how minor
· Bank statement reconciliation by the owner/senior manager
· Be alert to missing check numbers or other “out of sequence” forms.
- Tips are the most common fraud detection method. Set up a hotline and publicize to all employees that suspicions of fraud may be registered anonymously and without reprisal.
- Conduct post-hire background checks at regular intervals.
- Click here to access the full ACEF 2016 Global Fraud Study. Then take a look at page 88 for an 11 point Fraud Prevention Checklist that outlines the most effective ways to limit fraud losses from occurring. The Checklist is also a “wake-up call” to help you test the effectiveness of your fraud prevention measures.