In my 20 plus years of practicing law, I have learned that employee fraud is an unfortunate reality of business and non-profit life. While most of us believe that our coworkers and employees can be trusted not to steal from the business, almost everyone knows of of someone who was caught with their "hand in the cookie jar."
The bottom line is that employee fraud can and does happen. Frequently acts of fraud are small and repeatable. An employee may be skimming petty cash, submitting false reimbursement claims, or abusing a company credit card. The person responsible for submitting weekly payroll may quietly give themselves a bump in pay. Over time, even small acts can add up to significant thefts.
Businesses and not-for profits should establish policies and procedures that are designed to limit the opportunity for fraud - what the accounting profession refers to as "Internal Controls". At their most basic, Internal Controls are procedures that, when followed, ensure that multiple individuals are involved in each financial transaction, and that an organization's books and records match reality.
The linked article from Accounting Today provides some practical steps you can take today to reduce the likelihood of fraud in your organization. And, as you head into year end, consider asking your accountant to add a review of your Internal Controls to their annual engagement. You may be surprised at what they find.
Typically, fraud is only perpetrated by one person alone, so if you have more people involved, the more you can deter fraud.