Embezzlement is essentially the personal use of public funds by someone or persons that the funds were entrusted to. It’s a form of employee theft that tends to center more on small businesses simply because there are not sufficient checks and balances in place to track funding. Anytime large amounts of money are present there is a temptation which creates a risk factor to the body the funds were supposed to go to. In schools, fee payments that are not monitored closely can become the target of school embezzlement fraudsters. However, there are many school payment solutions to prevent this from happening. Here are 5 strategies to prevent embezzlement from occurring in your school:
1– Look At This As A Real Possibility
Sure, you may have the most trustworthy people working around you. However, what really puts the whole risk into perspective is that when someone is caught embezzling, the majority of times it happens to be someone who held a high position of trust within an organization. This simply happens because we become too trusting of the people in positions that typically require trustworthiness. By implementing a school payment solution to collect online school fees does not mean you don’t trust those in the positions who would ordinarily handle school fee collection.
It actually should make the job of your bookkeeper much easier when a program is used that assists with collection of fees and can provide regular reports for tracking purposes. Plus, having such a program in place gives you some control so that you can monitor what is going on at all times. It doesn’t mean you are paranoid or don’t trust someone. If anything, it means you are protecting everyone involved so that public funds go where they should.
2– Use A Checking Account For All Activity
This should be a no-brainer. When you use a bank checking account for deposits and withdrawals one very interesting thing takes place. You create a record of all activity that goes in or comes out of that account.
The record is generated by the bank and therefore cannot be altered or edited in some way before you get your hands on it. Bookkeepers can ‘fudge’ financial statement entries but can’t do anything to checking account statements because they provide an actual day-to-day record of what goes on with your bank account.
3– Steps Of Protocol
Another way to prevent embezzlement in any situation that involves public funds is to split up the duties related to cash flow activity. In other words, it is not a good idea for the same person on staff to set up a vendor, approve payments from that vendor and then write checks to that vendor. The same situation can happen if the same staff member sets up an employee payroll account and issues pay checks to that employee.
Things run smother – well, at least don’t look suspicious – when two or more people are involved in the chain. This essentially keeps each person honest in that no one can make decisions on their own without another employee seeing what is taking place. It’s just harder to hide certain moves when there are witnesses involved.
4– Take A Review of Statements
When was the last time you actually reviewed your banking statements? How about your credit card or payroll company statements? When you choose to trust everyone and never bother to just look at the statements to confirm everything appears to be functioning correctly, you set yourself up for embezzlement.
If you don’t look at statements, you won’t notice that sudden spike or gradual decline in revenues that are funneling out of your company bank account for some reason. When you check your statements you become tuned into the natural rhythm of cash flow and will spot something that doesn’t look right when you first notice it. This can save you a huge headache later.
5– Have Your Books Audited
One of the most obvious and strongest check and balance that you can put in place with the bookkeeping of your organization is with an annual audit. This is done with a third party and the audit can be as detailed or as general as you require or can afford. An audit can tip you off to embezzlement and the early warning can save you thousands or even more which makes the investment in regular audits worthwhile.
How A School Payment Solution Can Prevent Embezzlement
By using the best school payment solutions to pay school fees, you remove the temptation from staff because they will not come in contact with any money. By using a digital online school pay system, parents pay fees with their credit or debit cards. There are no checks written and no cash changing hands. When digital solutions are used in this manner it eliminates the weaknesses that can lead to embezzlement.
All transactions are recorded through the online school pay system as well as through bank accounting statements. Reports can be generated on a regular basis to show cash flow and other data. With this kind of system in place to pay for school meals and other costs, it becomes harder and harder for a dishonest person somewhere along the chain to take some liberties with the volume of public funds.
For more information on how a school payment solution will clean up your books and remove all fear of embezzlement, call us today at 844-438-7566. You’ll discover that switching from traditional pay systems to a digital online and mobile school payment solution will save both time and money. It will also protect that money from going anywhere other than where it is supposed to go. Feel free to share your stories and tips with us via hashtag #K12ElephantInTheRoom that is dedicated to making sure not a single cent is stolen from K-12 schools. Check out our blog page to see video stories about schools embezzlement and school fraudsters, www.skookii.com/blog.