Public Employees, Private Crooks: Part 2

By Tom McIntyre

May 21, 2013 Updated Nov 22, 2013 at 10:21 AM CDT

It has been a topic of interest since the story broke about Rita Crundwell's multi-million dollar embezzlement. How do you keep hands out of the municipal piggy bank?

When State Representative Don Moffitt heard the news that Dixon, Illinois Comptroller Rita Crundwell was charged with stealing millions of dollars from the city over 20 years, his reaction was pretty much typical.

" I was shocked, not only by the amount, but secondly, how long it could go on," Moffitt said.

Unlike most people, Moffitt has the power to try and do something about it. He backed Illinois House Bill 1562, a bill which would require every municipality in Illinois to have a financial oversight committee inspect the financial records of the financial officer or the Treasurer.

"On top of that, they can review bank accounts to see if bank accounts match up with records," said Moffitt. "If we do that, it gives the tools to local government that we hope we can avoid a situation like this in the future."

The folks who produce Fraud Magazine, the Association of Certified Fraud Examiners, say there is more to preventing workplace theft than just an additional set of eyes looking over the books.

At Bradley University, accounting students are taught that preventing workplace theft begins at the top.

"Leadership of the organization has established policies and guidelines for what is acceptable behavior," said Simon Petravick, Chair of Bradley Accounting Department. "There's a right way to do the business and this is what we're going to do. And, you don't leave it shrink wrapped. They take the time to education the employees on those."

Another recommendation, something not done in Dixon, is separating the people who receive money from those who spend it. Two signatures on checks is also a good idea.

"You remove the opportunity, it's going to be very difficult for someone to do some fraud," Petravick said.

There has to be monitoring of the money-financial reports sent to a supervisor.

"It's just good business sense for everybody's protection to have checks and balances," said Petravick.

There is also starting a fraud hot line for employees. That is how most workplace thefts are discovered, suspicious co-workers.

Why all the fuss? Aren't municipal crooks like Rita Crundwell an aberration? Maybe, but, the Association of Certified Fraud Examiners says organizational theft is big business.

On average, a business would lose five to six percent of its revenues to fraud. It's billions and billions of dollars.

If you are looking for the best way to sum up fraud prevention, in three little words, you can't do much better than Ronald Reagan talking about dealing with the Soviet Union "Dorei, nyet provei. Trust....but verify".

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