How to deal with staff fraud


According to a recent report from accountancy firm RSM, employee fraud cost UK businesses £40m last year. With reported crimes including payment fraud, client record fraud and thefts from the workplace, this figure is thought to be the “tip of the iceberg” according to Akhlaq Ahmed, RSM’s forensic partner.

Fraud can be classified in three ways, deception or misrepresentation, omission or abuse of position and can be tricky to prove. All instances of fraud in the workplace must be dealt with swiftly, but in all cases, prevention would have been better than cure. And the best prevention is a clear communication of expectations and an open company culture.

Ensure all staff are fully aware of company policy regarding fraud from the moment of hire. Give new employees a company handbook outlining their responsibilities and make reading and understanding it a contractual obligation. Give continuing staff regular reminders of current company policy.

If there is a suspicion of fraud in the workplace it is imperative that intent is proven. In some cases, the staff member involved may not realise they are doing anything wrong, for instance by taking company property home for remote working or claiming for expenses which are not covered by their contract.

In cases where full intent is clear, ensure you have the evidence to back up your claim. Inform staff of instances of fraud, ensuring Data Protection procedures are followed, which will send the message that fraud will not be tolerated.

Encouraging a culture of honesty within the company will help staff feel comfortable in coming to you should they suspect their co-workers. Ahmed recommends that organisations have up to date whistleblowing procedures which encourage employees to be confident in reporting their concerns.

Avoiding employee fraud is an ongoing battle but ultimately can be prevented for the most part by incorporating the right company culture from the start.