A marketing director for Castle & Cooke, a mortgage firm, is believed to have stolen almost $200K from her employer in less than a year of employment — until she was caught and charged with fraud.

While the case does not involve a medical practice or healthcare organization, it does offer some reminders about protecting a small office from internal theft. The employee allegedly ran up large false expense reimbursements and forged company checks — both possible in any small business with inadequate controls, including medical practices.

Practices can learn from this incident.  Check stock should be protected, and managed by a physician owner.  No one should be allowed to sign checks except a physician owner — no signature stamps!  And owners should reconcile the bank statement monthly, so that any unauthorized checks could be spotted.

Unauthorized expense reimbursements or charges are common routes to embezzlement in medical practices.  Be cautious about allowing employees — even a manager — unsupervised control of a credit card or an expense account with a vendor.  Review purchases “for the office” carefully — make sure that everything on the Costco or Amazon bill can be accounted for in the office.

Remember, not allowing temptation is the best way to prevent embezzlement — and the best way to maintain a relaxed, family like atmosphere in your office, because you have less need to be suspicious of anyone.  Internal controls are a gift to your practice — they protect against profitability loss while also helping to support trust and morale.

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