Embezzlement? Fraud? If you think these tragedies could not take place at your practice, think again! But there are ways to minimize unnecessary exposure and risk.

I recently lectured at the 2019 NCVMA Veterinary Practice Management Seminar and some of the attendees unfortunately shared their experiences related to fraudulent situations that their practices had endured.

The stories I heard that day recalled a truly shocking situation I remembered from several years ago… A practice had leveraged a receptionist to oversee Payroll and Accounts Payable. This was not a bad idea. But internal controls were not put in place to monitor these tasks. With no checks or balances, this receptionist used her position to inflate her wages and pay her personal bills.

And she did this for nearly 10 years to the tune of $1,000,000! This reinforces how imperative it is that ownership and management keep a finger on the pulse of ongoing responsibilities and never become comfortable or complacent with employees in these positions.

The good news is that there are ways to help prevent either from taking place. The following are tips to assist you and your practice in minimizing unnecessary exposure and risk. Here are three areas of focus that I encourage you to review as it relates to your practice:

  1. Internal controls
  2. Theft Prevention Policy
  3. Reviewing your practice management system’s fraud prevention guidelines

Internal Controls

Gary Glassman, of Burzenski & Co, has written an excellent article and provided an internal control checklist to assist practices with understanding and implementing processes to protect their practice. In my opinion, this article and checklist bring an awareness that all industries, not just veterinary, can benefit from.

Here is Gary Glassman’s article:

And an Internal Controls Checklist

Theft Prevention Policy

It is recommended that you include the following in your policies and procedures handbook. It makes it difficult for an employee to claim that they did not know they were not allowed to remove something from the property without permission. Here is the example policy from SHRM for your reference.

Theft-Prevention Policy (Example): Internal theft is a serious problem for many businesses. Although taking small items of company property may seem inconsequential, the cumulative effect can be very large. Stealing from ABC Veterinary Hospital, Inc., is like stealing from yourself. Losses from theft immediately affect our ability to increase wages and can jeopardize the profitability of ABC Veterinary Hospital, Inc. ABC Veterinary Hospital, Inc., will not tolerate property theft of any type. We consider property theft to include the unauthorized use of company services or facilities or the taking of any company property for personal use. Violators of this policy will be subjected to disciplinary action, up to and including possible discharge and prosecution.

Practice Management System Fraud Prevention Guidelines

The top three practice management software companies offer software specific fraud prevention guidelines. What I have found, more often than not, is that most managers and owners are not aware that this information is available at their fingertips. In addition to these guidelines, it is recommended that high level passwords not be used on a daily basis while working on the floor. It is recommended that you create a low-level password so that those watching will not oversee your typing and possibly use it to their advantage.

The following are links for your reference. If your PMS company is not listed, it is recommended that you contact your company’s technical support directly for their guidelines.

“ImproMed© recommends that clinics should contact Support and request a phone consultation if legal proceedings take place, as at any time there could be additional program updates (even in Beta testing) that could further assist an investigation. Experienced trainers in application-specific forensic accounting like Maggie Howes are available upon contracted request for both phone and onsite visits as necessary. This is also the case for other Covetrus© solutions such as AVImark© and eVetPractice©.”

In summary, it is important to do everything that you can to safeguard your practice, and these three steps will certainly better position your practice for the future. Remember that embezzlers are not born embezzlers, it is when the opportunities arise that unfortunate scenarios take place.

Monica Dixon Perry, CVPM
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