Causes And Cures

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

By Bill Lurz, Senior Editor | August 31, 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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