Partner corner: Preventing Employee Theft

By: Michelle Evans

Incorporating a few safeguards during the hiring process can curb future theft.

Challenge: In a down economy, the frequency of employee theft increases. How can we curb employee theft?

Solution: The best way to prevent employee fraud is to conduct a background check, especially of any employee with access to cash, checks, credit-card numbers, or any other items that are easily stolen.

Surprisingly few employers call references that candidates provide. And people incorrectly assume that a former supervisor or coworker will provide a good reference. Before hiring an employee, obtain consent of the candidate and check as many of the following as possible: past employment verification, criminal conviction, reference checks, drug screening, education, and certification.

Every organization should have some mechanism to educate executive-level staff, finance-department staff, and other employees about fraud. This can be done as a part of employee orientation or training. Emphasize that illegal conduct in any form costs everyone in the organization in lost productivity, adverse publicity, and decreased morale.

Developing audits that focus on high-risk areas for fraud is highly effective for an antifraud program. Some areas good for fraud audits are expense reports, payroll, sales, accounts receivable, cash, and suspense accounts. 

The likelihood of employee theft can be greatly reduced if associations institute background checks, basic audit procedures, and a culture of accountability.

Michelle Evans is assistant vice president of Aon Association Services, a division of Affinity Insurance Services, Inc., which provides the ASAE-Endorsed Association Office Package Insurance (business insurance) programs to associations. Email: [email protected]