SMALL THEFTS ADD UP

“I am very honest and dependable employee, integrity is one of my best qualities.” The interviewee says. Let’s call her Mary.

You have had a series of interviews and Mary’s resume stood out. You are impressed by how well she articulates herself and her experience is appealing. She is the right fit for your company, you hire her. She is the Head of Business Development and 3 months in, she is doing amazing work. Confident in her abilities, you decide to expand her responsibilities and send her to meet clients out of town. To make sure she has all the support she needs, you ensure that her daily per diem is sufficient. You want her to stay in the most comfortable hotels and have some stipend to entertain the clients bringing in the big bucks.

A year later, as it happens annually, you have external auditors come in. They call you in for a meeting, they have found something is amiss, something does not add up. They present you a booklet of receipts, “all these receipts are fake! This is close to Ksh 500,000 that your finance team cannot account for” they say in an accusatory tone. You launch an investigation. All the receipts were brought in by Mary, your heart sinks.

This story may seem far- fetched to some and it may be right on the money for others. Any business has to face  the FACT that employee theft is an unfortunate reality. This is just but one employee, in a situation where you have many employees, even if each from a group of 30 is stealing seemingly small amounts here and there, they eventually add up and heavily cost companies. No employer sets out with the intention of fraud occurring in their business, however this is an occurrence that will happen more often than not.

One can employ measures such as background checks where in countries like America, having an employees’ social security number can give you access to their past activities and any case of fraud may be previously recorded. While in Kenya this may not be that simple. Employers, not many, may ask for a certificate of good conduct but this does not necessarily mean anything with regards to the employee integrity. Not even a zero-tolerance policy can stop an employee who thinks they can get away with stealing, by the time the company realizes a fraud situation, its already too late.

There are many reasons employees may commit fraud. Some employees are malicious and actively seek out opportunities to steal money from their employer. Some may have unprecedented needs or are struggling to keep up with their financial obligations and may see this as a last resort. However, most employees commit fraud because there is an opportunity to do so. There is a lax in financial control and they may rationalize it and either think they deserve it or they can get away with it because others are also doing the same.

Companies have to look for ways to help their employees maintain a high level of integrity because if they are not honest with you, this may seep in to dishonesty with your clients as well. It can cost you a lot more that petty cash. Measures like using Business Pass is helping companies ensure that they eliminate fictitious receipts while helping in automating reconciliations and expense reports.

While you believe that you have hired honest and accountable employees, it is ultimately your responsibility to ensure that you put in measures to maintain that culture of integrity.

By Margaret Kemunto.