Causes And Cures

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Who steals, how they steal, and how to stop it.

September 01, 2004



Additional Information

Stop, Thief!
How to Protect Business
Checklists That Expose Thieves
Warning Signs That Something is Amiss
Close The Loopholes

Who steals:

  • Regional and division presidents
  • Construction supers
  • Purchasing agents
  • Accountants, bookkeepers
  • Sales agents
  • Land and development executives

How they steal:

  • Strong-arm trades for kickbacks
  • Build houses on the side
  • Create dummy vendors
  • Myriad accounting fraud techniques
  • Use of company materials for own purposes
  • Misappropriate and resell delivered products and materials
  • Strong-arm Realtors and land brokers for kickbacks

How to stop it:

  • Do not allow supers to negotiate trade contracts
  • Separate purchasing, authorization and paying functions
  • Bid competitively
  • Tighten purchase order and variance controls
  • Maintain cross-departmental accountability (no fiefdoms)
  • Cross-train managers, and provide:
  • Written scopes of work
  • Open-book management
  • Checks and balances - have multiple executives sign off on trade contracts, funds allocations, disbursements
  • Distributed P&L responsibility (such as a project manager form of organization)
  • Annual internal audits

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