For many businesses, it can seem like a strong cost-saving measure to put one trusted employee in charge of financial operations. In some ways, having a single individual at the helm of an organization might also seem to streamline processes, as fewer steps need to be taken to complete transactions, such as acquiring approvals and second signatures. However, a lack of segregation of duties can actually prove quite disastrous.
According to the Williamsport Sun-Gazette, the former financial officer for American Legion Post 104 in Montoursville, Penn., allegedly in charge of all financial responsibilities, as the accused individual, Jess P. Hackenburg, reportedly controlled the organization's banking records and issued all of its checks.
The source noted that fellow members first grew suspicious when Hackenburg refused to provide the club's full financial statement in 2012. An investigation showed that the finance officer and treasurer may have used his position to forge others' names on official records, as well as opened unauthorized lines of credit.
In addition to establishing a strong segregation of duties, companies should implement audit solutions to prevent monetary losses. With the help of accounts payable audits, leaders may be able to detect problem early, minimizing the potential impacts of misappropriation.