The Minneapolis Star Tribune recently reported on an investigation it did into Minneapolis Public School employees’ use of district credit cards. The Star Tribune reviewed six months of school expense records including credit card purchases totaling $1.5 million dollars. The newspaper discovered many of the school district employees failed to follow proper expense reporting policies, including not providing receipts for purchases. Some even made personal purchases with the school district credit cards. The outgoing superintendent and current CEO have since repaid the school district for unauthorized purchases.
So, would this circumstance be considered employee fraud and theft? Arguably, any time an employee is making purchases in violation of a policy it could potentially be considered theft. The Minneapolis School District has indicated it has already made changes to its purchasing card system. It also acknowledged other changes need to be made, such as revising the reimbursement policy regarding the amount employees who are traveling can spend on meals. Depending on where an employee is traveling, the current amounts of $7 for breakfast, $11 for lunch and $23 for dinner may not be sufficient.
Employee fraud and theft is an important issue for all employers to be on the lookout. My firm has found by the time fraud or theft is discovered, it has typically been happening for some time. It is rare for an employer to discover fraud or theft on the first occurrence. For more information on what to do if you suspect an employee is stealing from your business check, out some of our previous blog posts here and here.