THE MAJORITY of employee thefts are occurring in organizations with 500 employees or less and the median loss is $357,650, according to a report by Hiscox, a specialty insurer.
The main types of crime are outright theft of cash and check fraud, with rogue employees writing checks to acquaintances and trying to cover their tracks in the firm’s accounting system.
According to the Hiscox Embezzlement Watchlist:
- 79% of cases included more than one perpetrator. The average number of people involved was three.
- 85% of cases were perpetrated by a manager or executive.
- 70% of cases lasted more than a year.
- 31% of crimes went on for three years or longer.
- 33% of perpetrators worked in accounting or finance.
- Only 39% of embezzled funds were recovered on average, through settlements, restitution or insurance.
- Nearly 75% of total losses included direct theft of cash or misuse of bank deposits or transfers.
Prime suspects
You have to be proactive in your fraud detection efforts, Doug Karpp, national underwriting leader for Crime & Fidelity at Hiscox, says.
For small business owners, Hiscox recommends:
- Sending bank statements directly to your home for a review
to ensure they can’t be falsified prior to reconciling accounts; - Periodically reviewing payroll reports to look for anomalies; and
- Signing all of the checks yourself
For all organizations, Hiscox recommends:
- Establishing best practices in accounting. Businesses should mandate dual signatures or dual review on disbursements. It is also important to create separation in key business processes.
For instance, separate the money from record-keeping so that no single employee can control a process from beginning to end, and don’t let the accounts payable person reconcile bank accounts. - Bringing fraud deterrence into the light. Provide a short training session for all employees to illustrate the damaging impact of fraud and abuse and provide practical advice on how to spot fraud.
- Setting the tone at the top. Have everyone from management, audit and the leadership team talk about fraud prevention. Be sure employees are aware of internal controls and ask them
if they know of any weaknesses in the controls and how to improve them. - Setting up a hotline. These are an excellent way to promote reporting of misconduct and reflect a culture of integrity.
- Conducting comprehensive audits that specifically look for fraud. Surprise audits are particularly effective because
fraudsters will not have time to alter, destroy or misplace records and other evidence.
What to do
- 20% of COVID-19 medical claims had an inpatient stay.
Of those claimants with an inpatient stay, 19% were in an ICU for some portion of their time in hospital. - The average length of inpatient stays for COVD-19 medical claims was 7.5 days.
- The average cost per day was $5,400, totaling on average $38,500 per inpatient stay.
- COVID-19 medical claims requiring an ICU visit tended to incur longer and more expensive inpatient stays, at 11.5 days and $67,300 per inpatient stay, respectively.
Source: National Council on Compensation Insurance
Get a Quote
If you’re looking for a team of specialists who can help your cannabis business navigate state laws and regulations like this, contact Cannabis Connect today for a free quote.
Our Partnerships
