The Sunday Mail
IT is unquestionable that the dollarisation era has afforded many workers a reprieve as their wages and salaries can now meaningfully contribute towards their sustenance.
Disposable incomes, however, remain weak.
Some researchers often argue that there is a direct correlation between the amount of wages that workers receive to incidences of fraud and theft workplaces.
There are also experts who have devoted time to study the nature of fraud and theft at companies, including would-be perpetrators.
Left unchecked, theft can bring a business to its knees.
For some time, shrinkage, which usually describes the pilfering of goods, was a major challenge for retailer OK Zimbabwe.
For example, in 2010 the supermarket chain indicated that shrinkage at one time was between 2,5 percent and three percent of revenues. To put it in perspective, the grocer had lost more than US$3 million.
This obviously makes it paramount for companies to have either internal or external control measures to minimise fraud and theft.
Auditors usually come in handy in pointing out inherent weaknesses and risks in organisations.
According to a Association of Certified Fraud Examiners report, 54 percent of fraudsters are often between the ages of 31 and 45, and older workers who steal tend to take much more than their younger counterparts.
Managers and executives are the usual culprits in the worst cases of fraud.
It’s typically not the new-kid-on-the-block, but the long-term and trusted employee who ends up being the company crook. More often than not, it is someone who’s been with a company for more than three years.
Employees at private companies cause more losses than those at public or non-profit establishments.
Market watchers say most employees who steal from work are honest in other areas.
But for most there is a sense of entitlement and they don’t think they are hurting anyone. Many feel angry and entitled to steal from work because of perceived feelings of being victimised or not being appreciated, the report says.
It is the nature of the working relationship that can provoke some employees to take advantage.
You are much more likely to see this behaviour where trust has broken down completely and people feel they are not being treated fairly. From an employee’s perspective, they will justify it by saying ‘I work extremely hard, yet get paid less than my peers’.
So, observably, low wages and salaries can sometimes turn some employees into real monsters.
A mindset of entitlement can drive an employee to do anything.
Locally, most employees are going for months without getting salaries. One is obviously tempted to ask how such workers are surviving.
Side deals and pilferage cannot be ruled out, and such cases have become almost a daily read in local newspapers.
Non-payment of salaries, poor remuneration and general under-appreciation are some of the challenges blamed for increased fraud and theft incidences.
However, for senior management, the thinking is very different as they normally take advantage of poor corporate governance frameworks to swindle the company.
Theft and fraud can be particularly damaging for small businesses as most lack basic accounting controls and have a greater degree of misplaced trust.
Strong internal controls can minimise the risks of theft and fraud.
The first step to prevent employee theft is to screen job applicants thoroughly before they are hired.
Background checks should be performed and should include a check on criminal history, civil history, drivers license violations, as well as verification of education, past employment (including reasons for leaving), and references.
Although most companies are now very relaxed on doing these thorough checks, they are very necessary in eliminating potential criminals from joining the company.
It is also very important for all the employees to be handed a company policy stating that there is zero tolerance to theft or fraud.
Having CCTV at a company can be very useful.
The more the employees feel they will be caught, the less they think of stealing.
Some organisations, especially smaller companies, only consider auditors when they need audited financial statements.
Hiring auditors shouldn’t be out of obligation, but should be considered as necessary to the health of a business.
So, hiring auditors regularly can also be a good control measure.
Separation of duties for employees is also good for internal controls. Zimbabweans now opt to multi-task in order to cut costs but that can be damaging in the long run.
Separation of duties is critical, and no employee should be responsible for both recording and processing transactions.
It is really absurd to expect the same person who sends out bills to collect the mail and prepare bank deposits.
Random checks should be part of the lifeblood of a business. It is important to conduct surprise audits or surprise inspections at any given time.
Also, insist that your bookkeeper or any employee who has access to money takes a yearly vacation so you can examine their records.
Such an action should not be considered as a lack of trust to the one entrusted with the portfolio but as a purely business decision designed to safeguard the company’s interests.
Checks and balances are really important for business.
If this is not done regularly, then a lot of fraud and theft can go undetected and the company can suffer severe financial loss.
Companies must do everything in their power to foster a positive work environment.
It can help deter employee theft and fraud.
Open lines of communication, positive employee recognition and fair employment practices will assist in the reduction of occupational fraud.
Taurai Changwa is an articled accountant with vast experience on tax, accounting, audit and corporate governance issues. He is MD of SAFIC Consultancy and writes in his personal capacity. Feedback: [email protected], Facebook page SAFIC Consultancy, and WhatsApp +263772374784.
