As HR professionals we work with businesses across New Zealand and Australia. In the past year we have experienced an increase in clients affected by theft and fraud, equating to thousands of dollars.
So what exactly is fraud and what is theft? The difference is: fraud is hidden and theft is easily known. An example of fraud is internet fraud or a promise of making money through an investment and this not eventuating. Theft, on the other hand, is unlawfully and intentionally taking the property of someone else. An example is taking money and office supplies and falsifying time records.
In all cases we dealt with, the business owners trusted their employees and only when alerted to a specific anomaly in their accounts did they realise the extent of the problem. There are many sectors across a business that provide the opportunity for a person to steal. It is widely reported that a high percentage hold senior positions, have been with a company a long time and therefore know how to circumvent company procedures. And those in the accounting and finance sector are the most frequent offenders.
It generally starts small and undetected escalates over time.
I would like to reference the Horton Media v Tither case as the best example of action an employer can take against an employee for what is effectively theft. Significant remedies were awarded in this case.
Prevention is better than the cure. Here are some key indicators that can alert an employer to potential theft:
- Employees that don’t take leave for fear of being found out.
- Employees with personal financial issues.
- Employees suffering an addiction to alcohol, drugs or gambling.
How can we prevent this sort of behaviour?
- Complete pre-employment references.
- Police and credit checks for anyone dealing with accounts.
- Cheques and invoices authorised by two people.
- The CEO or GM complete regular spot checks on their accounts.
- Employ the services of the company accountant or independent accountant to conduct regular unannounced audits.
- Minimise company credit card use and if using personal credit cards, require receipts prior to reimbursement.
- Develop a theft and fraud policy and document in the company policy handbook.
- Outsource accounts and payroll.
Taking these measures may prevent the time, stress and cost of handling a theft or fraud in your business.
HR Executive Solutions 0275 913 912 www.hrexec.co.nz