I met with a potential client this past week. It was a referral from a current client that knows I can help this business with their many in-house “issues.” The manager of the business said that he suspected an employee of stealing and perhaps bringing drugs into the workplace. When I asked, “What makes you say that?” He related that the employee in question frequently changes addresses, moving from friend to friend. One of those former roommates told him that his employee frequently brought home unpaid merchandise from the store for them all to share. There were also several large unexplained cash shortages on the community cash register during the shifts the employee was working.

The manager also mentioned that the employee lied about getting a driver’s license restored within a few weeks. Several months later and no restored license, he went on line with the local police department website and found a criminal record of three DUI convictions and several drug possession and one conviction for drug sales for the employee in question. Seeing an easy way to dismiss the employee for falsifying the application, I was informed that there was no pre-employment application process. The employee was hired with no personal information obtained other than a social security number for payroll purposes; literally, hired right off the street.

I asked the manager who else could be involved in theft or other inappropriate behavior. The manager stated that he “knows” the other employees and they wouldn’t steal or do anything inappropriate at work. Again, “What makes you say that?” There were no background checks, no applications, no prescreening of any kind, and he only knew them for several months. He replied that he can “size up” people and that he “knows” that this one employee is the problem. I asked him how then was this suspect and troublemaker hired; and there was no response.

The manager also informed me of a former employee of his location who was promoted to manager of another location near a local casino. The manager had been suspicious of the employee prior to the transfer. Since the transfer, the new manager’s cash drawer has been perfect for months at the new location – an improbability in this mostly cash business. It’s highly suspected that the cash drawer is being balanced to the POS sales readings. Speaking of POS readings, there are no exception or reconciliation reports available - or just not reviewed.

There were also three separate incidences at other locations of burglaries that were committed by employees with safe codes. The businesses were entered, staged to look like a burglary. The safe was entered via combination, and the cash stolen. The camera system was turned off during the burglary and turned back on afterwards. The safe combinations had never been changed.

This organization can certainly be helped in establishing controls that will mitigate if not eliminate some of their problems, upgrade the quality of their employees, and improve profitability. In this case, it seems to me they don’t know what they don’t know. Basic structures in hiring, training, cash handling, policy and procedures, and general employee accountability are absent for all 11 of their locations.

In a previous article I wrote about suspects in an investigation. “If it looks like a duck, and it quacks like a duck, it usually isn’t anything else. It’s a matter of which duck.” From what I’ve been informed about this organization’s hiring practices, cash handling procedures, and the lack of controls, there may be lots of ducks swimming in this pond.

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