In doing research for another entry, I found an article detailing charges against a former Staples (SPLS) executive pertaining to over half a million dollars in fraud.
He was charged with misusing his corporate credit card as well as with creating, authorizing, and submitting hundreds of thousands of dollars worth of fraudulent vendor invoices and then receiving payment for them.
Could this happen in your Procurement Department?
What kind of checks and balances do you have in place to help avoid employees from scamming your corporate payment/reimbursement systems?
Here are a few things to think about:
- Sourcing employees should never be able to issue their own PO's for personal items they are purchasing from vendors to get corporate discounts. In fact, it is better that they order from the vendor the same as a regular customer using some sort of discount code.
- All requisitions should require at least three signatures. Original Requester, Approver, and Sourcing Employee. (Of course, no maverick spend should be allowed. All Purchasing must go through the Purchasing Department.)
- Accounts Payable should never pay an invoice unless there is a matching entry in the receiving/warehousing system for the items or a matching entry in a confirmation system for service based invoices.
What are you doing to prevent fraud in your Sourcing Department?
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