Time Card Fraud

It’s common for employees to cheat their employer out of time by coming in late, leaving early, and having someone else clock you in and out. But it can be a 2 way street.


We were notified by a store manager that there was some institutional and organized monkey business happening with employee time records. We assumed that this was limited to the one (of 10) district that this store was in. We had recently purchased the stores in this district and there were some growing pains in integrating them into our corporate culture. The company was under some earnings pressure, and there was a very strict edict that there was to be absolutely no overtime. None. Zero. Zilch. This district was very successful at complying.


The time and attendance records were computerized, but the weekly reports were in hard copy only. We were not able to troll through an electronic database. So we asked for 2 weeks of records from each of the stores in the district to see what we could see. The review and analysis was tedious. But the evidence was clear and unmistakable. Supervisors and managers were routinely deleting time from the employee records whenever there were minutes in excess of 40 hours in the week. The amounts were literally in the minutes of time – rarely as much as 10 minutes for any one person in  a week. But it was wrong. And it was occurring in every store in the district.


So, what to do next? We decided we should look at a full year of records from each of the stores in the district, and compute what the damage was. But what about the other districts and other stores?


My opinion was that we had a duty to at least sample 2 weeks from every store in the chain to make sure this was an isolate instance. My boss thought that was too much work and a waste of time. He was not a professional auditor. I was adamant and insisted. And then I just did it. Of the 80 or so other stores, we found 1 other store where there was a similar problem. That store was the worst of all of them. We computed the total owed to every employee for a full year. It was less than $1,000 total, We added it to their paychecks one week as additional pay with little or no explanation. All in all, it was the right thing to do. The managers involved received disciplinary notes in their files and were put on a 1 year probation. Again, I agree with the result.

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This entry was posted on April 2, 2012 and is filed under Fraud and Embezzlement, Retail Operations. Written by: . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.