4 tips to protect you against embezzlement

By Donald P. Lewis Jr., DDS, CFE

• Diversification of duties — This is the most important internal control in attempting to avoid becoming a victim of embezzlement in your practice. It allows for financial diversification and cross-checking of all work done in the office. The duties related to authorization of accounting adjustments and recording of transactions should be segregated.

• General controls — All employees should be required to take a vacation that should consist of at least one week in duration and extend over two consecutive weekends. All payables should be reviewed with original documentation. Physical access to the accounting system should be restricted to authorized employees only and only with proper password clearance.

• Cash — All cash receipts should be recorded and patients should be provided with a walk-out statement. Deposits need to be made on a daily basis. Checks need to be endorsed immediately and the checkbook needs to be balanced on a monthly basis. Employees who handle the cash should be considered for a surety bond.

• Mail — The mail should be opened by someone other than the office personal responsible for making journal entries or patient transactions. The employee who opens the incoming checks should immediately place the practice endorsement on the checks.

Author bio
Donald P. Lewis Jr., DDS, CFE, is an expert in fraud and embezzlement, a diplomat of the American Board of Oral and Maxillofacial Surgery, and is currently in private practice in Cleveland, Ohio. For more information on Dr. Lewis’ seminars or books, visit www.Fraudnetpro.com or email him at [email protected].