Inside job prevention

Any organization—be it a business, non-government organization (NGO), charitable or religious institution, government agency, or the government itself—can fall victim to an inside job where the very people entrusted to look after its best interests victimize it.

- DR. GEORGE S. CHUA

While fraud by insiders isn’t always well-publicized, it happens quite a bit, with alarming and increasing frequency and magnitude. You should be made well aware that there are a number of ways to identify and, hopefully, prevent these things from happening.

While many things can be done to track down, control, and prevent fraud, five easily come to mind: lifestyle checks, documentary and physical records, breach of policy and procedures, misallocation of resources, and the institutionalization of a whistleblower program.

A lifestyle check on a suspected individual is performed when there’s a mismatch between their source of income and their expenditures and assets. Typically, this is done when the salary or income of an employee, executive, or official cannot justify their and their family’s spending habits, vehicles, and home. How could a clerk have a brand-new Mercedes in the company parking lot? How could a government official afford a house in Forbes Park? An investigation into where the money came from should be conducted immediately.