A COMMUNITY EARLY LEARNING AUSTRALIA SIMPLE GUIDE
Thinking the unthinkable...
It's hard to imagine that someone you trust is stealing from your organisation, perhaps directly from the families and children.
1 PAYROLL FRAUD
- 'ghost', employee is created, or ex-staff kept on payroll: salaries go to the fraudster's account. - superannuation or union payments shown on payslips but sent to another account 2 PURCHASE FRAUD
- purchase orders to fake suppliers, or fake orders to real suppliers: payments go to fraudster's account - the supplier invoices inflated amounts, kickbacks are paid to the fraudster
Yet every few months in Australia there's a court hearing for fraud in an early learning or school setting. The culprit might be a long-serving employee, a junior trainee, or a volunteer. They might be your boss, or someone in head office, or an external supplier. In one recent case, the accused had a medal for community service!
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We consulted the experts for ways to help you spot fraud in your education service and, most importantly, to prevent it happening. This Simple Guide shows you FOUR places you might find fraud in an education service, and EIGHT ways you can prevent it.
places to find fraud in an early or middle childhood education organisation
Adapted from Australian sources including this excellent material at CPA Australia http://bit.ly/CELAFraudGuide
3 PETTY GAINS
Inflate petty cash or travel claims. Fake time sheets for additional hours. Use office equipment to support a sidebusiness, like printing colour resource templates for sale. Keep charity donations. 4 THE OVER-ORDER
Excessive orders for play or craft equipment, food, nappies or cleaning supplies are made, the fraudster arranges 'returns' but keeps the goods for personal use or re-sale.
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ways to prevent fraud in an early or middle childhood education organisation
T hree main factors contribute to fraud: 1. personal pressures 2. opportunity Opportunity is 3. rationalisation. one factor every
organisation can reduce. GOOD FOUNDATIONS ARE THE KEY
Strong financial systems mean: - directors spend more time leading - educators spend more time educating - committee members spend more time on policy and philosophy - administrative staff spend more time improving life for everyone!
Need help? Call us on 1800 157 818 or check out our education-specific Finance Toolkit
1 LEAD BY EXAMPLE
2 BLACK AND WHITE
3 KEEP TO THE CODE
4 SEPARATE DUTIES
5 WHISTLEBLOWING
6 LOCK AND KEY
Don't take shortcuts with money that encourage a tone of acceptance, like buying your lunch with petty cash, even if you always pay it back. Have a strong code of conduct or ethics, and make it part of the everyday surroundings in the office with mini posters or similar small displays.
Have a clear policy on money handling and make sure everyone knows how to apply it. This also means knowing who is authorised to spend, and how much. It's good practice that no single person has sole handling of a transaction. This is often done by a requiring a second signature or an email approval
Australians don't like to 'dob' but it's healthy if staff feel safe to 'see something, say something'.
Keep credit cards, petty cash, vouchers and donation tins secure. Computers used for banking shouldn't be widely shared by staff (or children!)
7 DON'T...
8 DO...
Sign an incomplete purchase order. Ignore a billing complaint - even from a 'nuisance'. Allow one person to be the only person to reconcile the accounts.
Keep believing in people, but investigate your suspicions. If you believe something is wrong, seek support from your peers, your peak body, or the police.
Adapted from Australian sources including this excellent material at CPA Australia http://bit.ly/CELAFraudGuide
A COMMUNITY EARLY LEARNING AUSTRALIA SIMPLE GUIDE