Originally posted on CUInsight.com.
Guest post written by Jay Slagel, President and CEO, Allied Solutions.
Allied Solutions is the NAFCU Services Preferred Partner for Insurance—Bond, Creditor Placed (CPI), Guaranteed Auto Protection (GAP), and Mechanical Breakdown (MBP); iSolutions; rateGenius.
It is not surprising that fraud in the workplace increases during an economic crisis or recession and small businesses (including large and small credit unions) may be vulnerable. Internal fraud typically occurs when someone has an incentive, such as a financial or economic hardship, plus the opportunity. National statistics show that it typically takes two years from the time fraud begins to the time of discovery. As a result, while some entities have already discovered fraud born of the recession, many more are likely to uncover problems in the coming years.
Management staff may be wearing multiple hats to keep up with more work, giving them less time to monitor employees, keep an eye on expenses and oversee their internal operation. During these periods, there might be the potential for a credit union to drop the ball in areas of oversight. Below are several ways to help fight fraud:
Establish fraud controls. Conduct a quick assessment of your fraud controls and determine who is responsible for fraud detection and reported misconduct. Credit unions should clearly establish this oversight which could be assigned to a senior manager, an internal auditor or the supervisory committee. Basically, this individual or group would perform periodic reviews of employee accounts and other areas where fraud might occur so as to detect and act early if a problem surfaces.
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