Types of Fraud that Can Be Perpetrated by Staff Against Their Employer

CIPD (Chartered Institute of Personnel and Development) states that; there are numerous types of fraud that can be perpetrated by staff against their employer. Depending on the nature of business and the products and services offered, members of staff may have many opportunities to commit fraud. Each business and organisation will have its own particular risks and threats and there are further threats that arise in relation to job role, responsibility and seniority. Fraudulent activity can range from compromising customer or payroll data to straightforward theft or the submission of inflated expenses.

Staff fraud can have an ‘opportunistic’ element in that it’s generally undertaken on an unplanned basis by an individual for the purpose of personal financial gain, or can be linked to a serious and organised criminal network or terrorist financing. These are fraud committed by members of the staff of business entities (employee and management).

They includes but not limited to:

• Un-ethical practice to seduce customers to improve market share; this is usually done where staffs are usually asked to meet up with some unrealistic targets.Such happened during the regime of Professor Charles Soludu as Central Bank Governors all in the name of meeting savings targets by banks female staffs. His then intervention reduces the conversion some female bank staff f to prostitutes.
• Illegal conversion of ownership business assets, this may happen with the aid of improper recording and allocation of assets.
• Deliberate written off of performing debts, this is usually committed by management staff with sometimes collusion of other staff and customers.
• Illegal occupation of staff lodge and quarters this usually occurred when a staff occupying a staffquarters in a location is transferred to another location and possibly being allocated another official quarters. This type of fraud usually not occurred for a long time.
• Un-authorised occupation of quarters meant for higher grade officers,usually done to favour some favourates within a business entity
• Over staying overseas on trips at ether personal or company expense. Trust Nigerians some people on one or two overseas training do usually not fall sick until about few days of their coming back to Nigeria.
• Conversion of private expenses to official. Common example include converting hotels and entertainment of family and friends to official expenses.
• Overriding controls to cover up some fraud or favour some parties.
• Wages and Salaries which ranges from ghost staff, un-authorise allowances, overstatement of overtimes, non-deduction of loans and advances, non-deduction ofapproved dues, salary overpayment etc.
• Teeming and lading:using the proceeds of future to cover up for current. (usually refers to as robbing Peter to payPaul).
• Skimming : intercepting cash payment before recording /suppression of receipts by not issuing.
• Cash larceny: stealing cash after recording.
• Over invoicing: deliberate acceptance of over prices quotations of Local Purchase Order.
• Duplication of invoices for payments this is done mostly where payment authorizations are discentralised.
• Collusion with customers and suppliers:accepting inferior qualities or lesser standard of items as genuine.
• Deliberate omission of recording debtors: this is usually done for personal to obtain less amount from customers for self benefits.
• Deliberate omission of recording cash receipts; this is done so as to convert such to personal fund or used in settling previous fraud committed.
• Un-authorised written off of debts for personal settlements.
• Falsification of documents (receipts, invoices) for financial gains.

Different employee perpetuate fraud for different reasons, however, the employee that perpetuate fraud usually have the following traits: Disgruntled employees – these are staff who do not see any future in the business entity. They only there to earn income that will make them survive for a while. They do not have any vested interest in the entity. This category of staff keeps complaining of maltreatment within the organization. There complains sometimes range from not being properly compensated for service rendered, lack of incentives, poor condition of service, very little or no salary increments for a time, favourism ,etc.

Stressed-out employees – these are set of employee you a frustrated about themselves of environment. They are never boarded about their environment and always absent minded Employees who live above their means –these are set of employee that want to be in a social class above their status or income. They want to have the latest in most things, from phone, wears, shoes, wrist watches etc.

Employees who never take a vacation. Some employee will never want to observe annual vacation so that the extra benefit (legal or illegal) derived from the sit will not elude them or be exposed to other staff or some anomalies could not be easily detected.The most common among employee in this category are the cashiers. Employees experiencing financial difficulties: occasionally some employee may need some extra fund to meet up with some unforeseen circumstances or life threaded sickness.Surely if their business organization cannot advance them salary advance or loan, the nest option may be to commit fraud to save life and better face a lesser consequence at a later date.