Home » Blog » How Can I Prevent Employee Fraud at my Manufacturing Plant?

How Can I Prevent Employee Fraud at my Manufacturing Plant?

Posted by Sean Murphy on Dec 26, 2018

According to the Association of Certified Fraud Examiners
(ACFE), internal fraud bleeds nearly $4 trillion a year from businesses across
the globe. Even though companies can experience theft from outside sources like
vendors and customers, the highest losses can be attributed to employee fraud. The severity of the crime can be as
small as stealing company supplies or as large-scale as financial statement
fraud. Fraud by upper management can lead to higher losses because their
credentials allow them to easily falsify financial, credential or other
work-related documents for personal gain.

To help companies combat the problem, the ACFE published a
series of security measures to deter internal theft at manufacturing plants.
First on the list is to improve internal controls. By this they mean to not
have the same employee keep books, collect funds or write checks. Additionally,
the business should schedule a monthly bank statement to be delivered, unopened,
to the owner, who can check the statements to make sure everything looks as it
should. Background checks on new employees and fraud audits by an outside
accountant are second and third on the list.

The responsibility to deter internal theft shouldn’t fall solely
on the business owner. The ACFE recommends employees go through ethics training
to learn where fraud can occur and its associated consequences. For example, reducing
internal fraud could result in higher salaries, however, if the opposite
occurs, there could be job losses.

After employees complete a thorough ethics training, the
company may want to offer an anonymous way to report fraud, either via a
hotline or website portal. Most employee theft incidents are discovered because
other employees report what they know.

Don’t be afraid to prosecute anyone caught helping
themselves to company money or supplies. Some companies avoid legal action
because they are worried the publicity will negatively impact the
business. Legal action is crucial because it makes an example of thieves
within the company.

Another way to help prevent internal theft is to install a
surveillance camera system at your manufacturing facility. There are two types
of systems: reactive and proactive. A reactive system simply responds to a
situation after an alarm is triggered and usually after a crime has been
committed. A proactive solution is one that acts while a crime is in progress,
often before damage is done and suspects leave the property.

So, how does it work? One of our Stealth Monitoring trained
security specialists will visit your facility to discuss your needs and budget.
From there, he will design a customized solution just for you, including
strategically placed cameras, audio speakers, access control if necessary, and
a schedule for live video monitoring hours. Once the system is in place and
goes live, trained security operators can watch those cameras in real time,
often from vantage points that aren’t accessible to an on-site guard. If they
see something out of the ordinary, they can activate a speaker warning or call
property management and local police.

Even when the surveillance system operators aren’t watching
live, the security cameras are still recording. As part of our world-class
service, we offer a video review service which encompasses a team of analysts
who will sort through footage and pull relevant clips of any incidents in
question. This can prove beneficial for insurance claims and police

In the following video, watch as a driver hits a stack of
inventory at a client’s property. Identifying information such as facial
features and license plates can be used to determine who is responsible for
property damage and theft, however we have blurred that information for

Employee fraud is a large contributor to losses associated
with theft for manufacturers across the United States and Canada. Business
owners can help deter fraud by keeping their employees accountable and utilizing
a proactive video monitoring solution.

If you would like more information about live video
monitoring and what it can do for your manufacturing property, click