Employee Theft and Delegation of Duties

There is one recurring theme seems to be present in almost every employee theft investigation that I have been involved in, and that is that the employee was inadequately supervised or had too much autonomous control over an area of the business.

I was having dinner with a friend who works in bank administration, and we were discussing the problems of internal theft (not great dinner conversation, I’ll grant you.)  She remarked that at the bank where she was employed, every employee who handled cash and certain other financial transactions was required to take two straight weeks off each year, so that another employee had to take over responsibility for the person’s job for that period of time.  This was done to avoid internal theft.

Then I thought of all the employee theft investigation that I have reviewed over the years, and how many of the thefts were discovered or suspected when the employee had to take extended time off for illness or other unforeseen reason.

These cases of internal theft were more often than not met with disbelief by management and co-workers who admired the person because he was so dedicated that “she never took vacation” or “he never wanted anyone to help him with his work”.  Only later do they discover the reason why the person was so dedicated, and that was because it is much easier to cover one’s tracks when no one is checking up or adequately supervising one’s work.

One of the best and most efficient methods to avoid prolonged periods of internal theft is to institute a policy requiring periodic audits of every employee who has access to company assets, particularly in the accounting arena.  Allowing the same employee to control payables, receivables, and payroll is too often asking for employee theft to happen.  Delegating parts of the process will frequently avoid taking advantage of this situation. The employee theft investigation sometimes comes too late to recover all that’s been stolen.

But don’t overlook employees in shipping and receiving who handle merchandise and take out the trash.  Is your merchandise in the trash to be picked up later.  Many companies wisely conduct trash audits to avoid theft opportunities.

Every business owner needs to consider if their “best employee” is really that or are they covering up their own employee theft.

For more information on employee theft , employee theft investigation ,  or internal theft , contact us or call 1.770.426.0547 – Atlanta Georgia