June 19, 2018
In R v Falvey, heard at Swansea Crown Court, a trusted employee of a family-run property business was found guilty on 19 charges of theft and false accounting and sentenced to 28 months in prison.
The employee in question, who worked as a manager at the letting agency, was able to orchestrate payments totalling over £30,000 from landlords and tenants into her own bank account, and then create false invoices and credit notes to cover what she was doing.
It was only when she went on holiday and another manager had to cover for her that her activities began to be discovered. The company was then left in serious difficulty due to the substantial cost of instructing forensic experts to unravel the thefts and rebuild the company’s corrupted records.
So how can you safeguard your company from the theft of assets and revenue by employees?
1. Employee screening and monitoring – when recruiting new staff, make sure you check their references and qualifications. In some cases, you may be entitled to run a DBS check to warn you of any unspent convictions. Ensure that you monitor staff closely during their probationary period and review their work to ensure adequate performance.
2. The right policies – it goes without saying that staff should not steal, but there should also be policies in place to clarify more ambiguous situations, such as an IT policy covering misuse of company systems, and an expenses policy dealing with the proper authorisation of expenses.
3. Surveillance – privacy is a hot topic right now, but if you have communicated the fact that you will monitor computer use or place CCTV surveillance in areas of your business through clear policies, then you are entitled to monitor your staff’s activities.
4. Alternating duties – in higher-risk areas which involve handling money, ensure that there are adequate control measures in place. Consider training more than one member of staff to do the same role so that there is less opportunity for the misappropriation of money or assets, or institute controls so that a second signatory is required for any company spend or receipt of moneys.
5. Audits and reporting – if your employees know that you regularly and thoroughly audit workplace activity, there will be less scope for staff to offend in this way.
6. Investigations – If you suspect that a member of staff is stealing from the business, you may be within your rights to suspend them from work while you investigate. However, be careful to ensure that you follow proper procedures (including the ACAS Code of Practice) as you move through a disciplinary process.
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