Are Criminal Background Checks a Waste of Time and Money?

Listen, you spend hundreds and thousands of dollars every year on auto insurance, and life insurance and homeowner’s insurance, right? And your hope and expectation is that you NEVER have to draw on it, right? Nobody in their right mind drives around thinking, gee, I hope I get in an accident and do lots of damage to my car and other cars. I hope there are lots of medical bills, too. That way I can collect something from all these insurance premiums I pay.

But these same, supposedly rational people, will turn right around and refuse to pay a few buck for a criminal background check on their employees. Too expensive!

Well, here is just ANOTHER story of a small business that was victimized by a crooked bookkeeper who had been convicted of exactly the same thing in the past!

What do you think? Did the owner trust his/her bookkeeper? I guess they did! Until they discovered the theft, that is. Trust is not an internal control, and internal controls are not a luxury, they are a necessity, like rent, utilities, payroll and cost of goods sold.

In other posts, I’ve documented the risk to small firms, non-profit organizations, …..in fact EVERY organization is at high risk, unless their internal control systems, policies, procedures and habits are thoughtfully designed and working as expected. Owners of small businesses turn over controls to the bookkeeper all the time, and this is a common result. Boards of trustees of small non-profit organizations turn over controls to executive directors, with the exact same results.

Take these fraud-defying actions:

  • Perform criminal background checks on anyone who has any access whatsoever to cash or finances.
  • Pull their credit reports, too, as a condition of employment.

Bangor woman faces second embezzlement accusation in 9 years

For the complete story and all the others on this blog, visit Amazon and search for “Tales From The Trenches,” available after August 31st, 2020.



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2 Comments to “Are Criminal Background Checks a Waste of Time and Money?”

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This entry was posted on January 31, 2013 and is filed under Fraud and Embezzlement, Small Business Advice. 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.