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It is so devastating that you wake up one day only to realise your most trusted employee has been stealing from your business.
Employee fraud and theft, at times referred to as occupational fraud, workplace fraud, corporate fraud, employee embezzlement, and or inside job is so rampant in workplaces.
This type of crime is not only a problem in Zimbabwe, but a global challenge.
Globally, big scandals involving employees swindling funds from their employers or workplace are on record.
According to the CNBC, workplace crime was estimated to cost businesses in the United States US$50 billion a year.
But perhaps it is prudent to look also at employee theft and fraud in terms of its impact.
Embezzlement, employee fraud and theft can be catastrophic to both small and big companies but more severe on small enterprises.
The theft or fraud affects the balance sheet of the company resulting in challenges such failure to meet organisational goals, negative impact on corporate social responsibility and quality of products.
Commercial crimes division is seized with the investigation of many cases of employee fraud and theft, (in addition to examples given in the previous article) that has been committed by eployees in any of following ways;
Faking vendor payments.
Stealing office supplies.
Initiating and approving a fraudulent payment, and money is transferred to fraudulent accounts for personal benefit.
Starting own business using company resources.
Generating fraudulent receipts for received company money.
Converting to personal use company funds supposed to be banked in company account.
Hacking company accounts (email and social media accounts), accesses privileged information and steals from the company.
Cloning company credit/debit card and then swipes company money using a cloned card.
Receiving kickbacks from company clients.
In one case, an accounting clerk responsible for initiating payments, allocation of resources and monitoring cash flow of the company decided to steal from his employer.
Pursuant to his plan, he logged into the company’s nostro account and initiated payments.
He would further approve the transactions he initiated and then transfer company money to various fraudulent accounts he had created.
As a result, the employer was prejudiced over US$200 000 while the culprit spent the loot on luxurious life.
Employers should consider a number of preventive measures to minimise employee theft and fraud.
But first and foremost, employers must think security and think like a criminal. That helps in identifying weaknesses in the system that may be exploited by the errant staffers. The following are some of additional basic preventive measures;
Segregate duties. No single employee should be given too much authority to both initiate and approve a transaction.
Take legal action for criminal activities. While companies at times try to avoid bad publicity by not reporting the crime committed against it, it is even more beneficial to report thieving employees as this will act as a deterrent to would be errant staffers.
Know your customers (KYC).
Upgrade their security and information systems.
Do periodic job rotation; this can help unearth the rot among staff.
For feedback, WhatsApp line: 0772 764 043, or e-mail:[email protected]. Tom Muleya is a Detective Assistant Inspector working under CID Commercial Crime Division (Northern Region), Harare. He is also a member of the National Cyber Security Taskforce, Zimbabwe.
Online Reporter