Keep Embezzlement From Happening to You

Gina Espenschied, RN, BSN, CNOR, survived an embezzlement nightmare that shook the surgical facility she used to manage to its knees, nearly knocking it out of business and rattling the confidence of surgeons and staff alike. While the business manager who slowly siphoned away nearly $300,000 still sits behind bars, Ms. Espenschied was at OR Excellence sharing the warning signs she wished she knew to look for a few years ago when he robbed her blind.

First, she said, an embezzler can be almost anyone: administrator, business manager, front desk worker, collections agent, materials manager, nurse, housekeeper.

Embezzlement can take almost any shape as well, she said. Co-pays or deductibles wind up in someone's pocket instead of on a deposit slip. Fictitious patients are "refunded" and deposit monies end up in a personal account. Vendors are overpaid and refund checks are signed over to a staffer. Personal bills are paid out of the facility's account. Staff members sign checks received from patients over to themselves. Fictitious companies are invented for payment of supplies or supplies are stolen and sold for profit. Backroom deals are made with vendors who use more expensive products in exchange for dinners and tickets.

You can't grow eyes in the back of your head, said Ms. Espenschied, but there are steps you can take to be vigilant against theft.

• The person cutting checks never signs checks.
• Create W-9 forms for every new vendor and validate their Employer Identification Number.
• Double sign off for petty cash and collect daily receipts and signatures of employees given cash for supplies.
• Have 2 people check and sign off on deposits.
• Place deposits in a locked bag for delivery to the bank.
• Have someone other than the person handling the books perform monthly reconciliation of bank and credit card statements.
• Cap the amount that can be charged to the company credit card.
• Have an outside accountant perform monthly audits and generate quarterly statements.
• Insist on mandatory week-long vacations for all staff handling money.

— Dan O'Connor