Seven Steps to Preventing Resident Trust Fraud

A Texas Business Office Manager was arrested this week for embezzling over $72,000 from resident trust accounts. Every company has a story like this one, just different names and different amounts. It's almost cliche to mention it, but it's always the people that you trust the most. Why? We tend to use that trust as an opportunity to let these cash functions of our business run on "autopilot." Here are ten suggestions to help you keep a finger on the flow of money in your building.

1. Count the cash yourself. You probably have a $500 resident trust box and a $300 petty cash box. Take the time to count it yourself. It's a ten minutes exercise. The cash plus the receipts should always equal the total.

2. Never schedule your reconciliations. If the Business Office Manager knows that you will be counting the 15th of every month at 2pm, then they will always make that the one day that everything is in order. Be sure to put them on your calendar, though. It's an easy thing to blow off if you don't have a plan.

3. Stop letting people "get creative." Ever count the petty cash and find it ten cents short of balanced? Don't let your business office manager be so quick to grab a dime out of the desk drawer to settle up. Count again, then a third time. If this becomes a pattern, further action is warranted.

4. Require two signatures for residents that can't sign. If you start seeing more squiggly "x" marks in place of signatures, ask questions. Make the social services director one of the required signers as opposed to two business office workers.

5. Open all bank statements. Read them, too. This takes some extra time, but so does a ten year audit of your entire business office when your manager gets busted. Check statements for large transactions as well as transactions by a resident that normally doesn't withdraw money.

6. Talk to the residents. Ask your business office manager for ten recent withdrawal slips and put them in front of the resident. Let them know you are doing a routine customer service audit for their financial security. This gives you added trust with your residents.

7. Let the Business Office Manager know you are doing all these things. Let everyone know. Your goal isn't to be secretive, it's to add a layer of a accountability to the system. Any good BOM will appreciate the attention. Any bad BOM will stop in their tracks.

This is nothing but common sense, but it can be so easy to let an effective Business Office Manager operate with very little oversight. Occasionally, someone sees a window of opportunity, and once they've tasted free money, it's hard to turn back. Don't let your residents and staff suffer because you don't have time to count the cash box.