Lead Us Not Into Temptation
The number of burglaries, bank robberies and embezzlements occurring in our communities is on the increase. These events frequently occur in our own neighborhoods. We live in a time when it is not only fashionable to be paranoid -- it is practically a mandate. This explains why I lock my car, even when it is in my own driveway. This is why I temporarily grow an extra eye when I get cash out of an ATM. This is why I do a lot of things differently than I might otherwise do.
Like on (theoretically) all college campuses, we publish an annual a report summarizing criminal activity on our campus. I am, therefore, aware that the frequency of incidents of theft, burglary and embezzlements is on the rise. Not too surprisingly, the size of the toll is also on the rise.
There are several obvious reasons why this is happening. No doubt, the condition of our economy is partially responsible, yet it is hard for me to accept that as the primary driver. After all, most of the perpetrators on our campus are current employees, with some of them making pretty fair wages. It seems to me that another significant force is that more of us are not satisfied with what we have, materialistically speaking. We want more, and we want it NOW! Thus, while many of us are in debt up to our eyeballs, we still want more.
The preceding drivers are societal factors that managers can't do much about except to recognize their existence. The third one, however, is different in that we must deal with it. It is: opportunity.
As we drift away from using traditional paperwork to relying on the use of credit cards, there are new opportunities for theft. Controls that worked so well before may not apply any longer. Since people appear to be either more gutsy or desperate, stronger measures are required.
Like many other campuses, we have eliminated 90 percent of the use of traditional purchase orders, having migrated to credit cards. Out of our staff of 600+ individuals, only half a dozen carry a card. Out of that elite group, only three of them are used to process as many as 20,000 transactions per year. We have also successfully eliminated standing purchase orders. As a result, we feel that we have better control than ever before, with less paperwork. (Moreover, the vendors with whom we do business love us now. They get their money much faster from the bank than they ever received payments from our accounts payable office.)
What are we doing that makes it so very difficult for an otherwise honest person to succumb to temptation?
- We require the use of an order form, no matter how small the purchase.
- Each one of those forms must carry a work order number, as well as a service order number, before it can be processed.
- Both the person placing the order and the next level of supervision must initial the form.
- With very few well thought-out exceptions, all purchases and acquisitions are processed and filled out of a central office.
- There is an independent third party who matches order forms to receipts and, ultimately, to the bank statement. This person is authorized to bring to my attention any purchases that look out of line.
- Our executive team regularly reviews those same bank statements looking for unusual vendor names, strange patterns and/or unusual costs.
- Maintain a zero tolerance policy on transgressions, regardless of who and how much.
In the facilities business, we have some options open to us that some other groups on campus don't have. For instance, we have eliminated all petty cash funds and all cash transactions. Organizations such as bookstores, restaurants and snacketerias, ticket offices, etc. must continue to accept cash and account for it. In those organizations, a third level of review becomes even more critical. One of our auxiliary operations recently had a case where a supervisor was falsifying cash receipts, stealing in excess of $100,000 over a period of two years. She was able to get away with it partially because nobody independent of her office routinely reviewed her activities and transactions.
Independent audits are extremely valuable. Although no one loves being audited, we welcome each one. It helps us remember how critical a good, tight system is. So far, these audits have reassured our bosses that we are taking this responsibility seriously. Unfortunately, other departments still need to learn.
How secure is your campus?
Pete van der Have is director of Plant Operations at the University of Utah in Salt Lake City. He can be reached at