Issue link: http://viewer.e-digitaledition.com/i/759993
susceptible to misappropriation of assets. If business owners eliminate the opportunity for fraud to occur, no amount of pressure or rationa lization will ever override that. In a perfect world, owners would oversee a ll operations, verify each transaction and reconcile every penny. But when would they find time to acquire new patients, tackle strategic planning and perform a ll the other manageria l duties that ensure that their medical practices continue to grow? There are better, cheaper and more e¢cient ways for the physician owners to stay out of the details and still run with adequate controls. 1. Ensure that the person collecting cash and/or open- ing the mail with patient and insurance remittances ca nnot post to the accounts receivable sub-ledger. This might not guarantee that the money collector will not redirect customer receipts into his or her own pocket, but the patient account will show delinquent after severa l weeks of nonpayment and a simple phone ca ll to said patient will help track down the missing money and the culprit sooner. 2. Require each invoice that comes to the check signer's desk to have a purchase order attached with some sort of stamp of management approval. This helps ensure that phony invoices are not paid with company resources. There should also be a dollar threshold that requires certain checks to have two sig natures, i.e., checks written for more tha n $10,000 must have two signatures. 3. Compare current payroll runs to previous payrolls and investigate di‚erences. Owners should a lso review the payroll system master file to ensure any changes made a re accurately reflected. This could help deter employees from creating "ghost" employees who might cash out on two paychecks or from increasing hourly rates or overtime hours that did not occur or were not authorized. 4 . Impose ma ndator y extended vacations for key employees at least yearly. Employees who commit long-term fraud must have a more than faithful presence in order to have ultimate charge of the records they are manipulating and to circumvent any issues that come up that would expose their embezzlement. A two-week vacation is a common benchmark that assures enough time to uncover any abnorma lities. 5. R eview monthly bank statements and have the bank include all canceled checks. Owners can scrutinize the cash ins and outs and search for unauthorized payments or forged checks. 6. Create a vendor ma ster list that conta ins only those vendors approved by the owners. Then purchase or create a payables system in which checks cannot be written for vendors that are not on the list. This reduces the risk of ma king payments to seemingly clever employees disguised as phony vendors with the use of fa ke business names and separate P.O. boxes. Now is the time to ta ke control of your controls and stop the fraudsters before they act. Remove the opportunities and you have an incomplete fraud triangle and a company with stronger controls, and hopefully for assets. Ruth Menchaca, CPA, is a Supervisor in the audit department with Sol Schwartz & Associates PC. Menchaca's expertise is mainly focused on accounting and auditing services for individuals, privately-held and not-for-profit companies, and 401k plans. She has worked on audits, reviews and compilations in a variety of businesses including retail, construction, real estate, nonprofit and employee benefit plans. She also has experience performing bookkeeping, general ledger clean-up work for clients and tax services for individuals, corporations and partnerships. Contact her at 210-384-8000 or via email at rlm@ssacpa.com. ■ 1 5 M D N E W S .C O M /// M D N E W S S A N A N T O N I O 2 016