Embezzlement in our governmental services across the state is getting more prevalent than ever before. It seems like every month or couple weeks we hear of an outlandish story of theft from within a city or stand alone fire service. Every year I meet with hundreds of departments all across the state. I often get the same story about how the treasurer or board members are long time members and that they would know if ever a dime was missing. Yet every couple weeks the same people or departments pop up with an allegation of embezzlement.
I was going to go into a list of ways to embezzle and what all is considered embezzlement. But I have decided to get straight to the point. What is the number one way departments are being taken advantage of? "Manufactured or Prepared Financial Documents and Spreadsheets". You absolutely cannot solely use documents that have been retyped or prepared by a treasurer, clerk or chief. The numbers can be altered for years and know one would ever know, at least for a very long time. It gets even worse when the only person seeing actual bank statements is the person preparing the documents. A recent case involved the board member and the treasurer both conspiring over many years to embezzle an obscene amount of money. They got away with it for so long because these are the only two at this entity that looked at the actual bank statement. When I say bank statement I mean the "bank generated/printed statement".
I believe more than 75% of all embezzlement in the state would cease immediately or bring itself to light if every department adopt the very ease simple guidelines.
1. At all board meetings, a current bank generated statement should be presented. If you use a spread sheet or other prepared document. You should also have an attached bank statement to it makes the numbers on the prepared document relevant to reality.
2. One person not authorized to deposit or withdrawal conduct a quick simple monthly audit of the finances. This person should be not directly supervised or connected to the treasurer or clerk.
3. Have two members present anytime cash is changing hands and have two members present when preparing bank deposits involving cash.
4. Two signers an all checks.
The presence of actual bank statements in our meetings would be revolutionary. Now this is just one element when it comes to embezzlement. The link below is to a great article on the Firehouse website by Bill Jeneway that has many case studies and additional information on embezzlement and finances in the fire service.
10 Steps for Theft Management in Fire DepartmentsBY WILLIAM JENAWAY ON JUL 8, 2015
Jerrad Van Coots
Jerrad Van Coots is VFIS of Oklahoma lead specialist. Spending 100% of his time with ESO in Oklahoma.