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Employee theft comes in many guises; misuse of company credit cards, stolen petty cash, personal photocopies, borrowing software or personal use of e-mail. Even the Prime Ministers office is not immune; a staff member stole $193.00 from petty cash. After admitting the offence, the employee was disciplined and repaid the money but still works for the minister's office.

Most people don't set out to steal from your business, the professional fraudster aside, personal circumstances and opportunity generally combine to provide the environment in which is happens.

One client, a food distributor, discovered that his accounts clerk had pocketed money over a six-month period. Their

goods were delivered on a COD basis, the accounts were in arrears and no reconciliation had been done for some months. The employee was deeply in debt and the cash proved too tempting. Initially she took a small amount intending to replace it when she was next paid. She was just as strapped for cash next pay day and so she never replaced it. Since she wasn't immediately caught, the amount and frequency of the theft increased. Her personal debt and the readily available cash combined with poor process controls provided the right environment.

A thorough pre-employment background check would have shown that the employee was personally deeply in debt and being pressured by a debt collector. Not everyone who has money troubles resorts to stealing, although almost every situation in which I have been involved has included an employee with serious personal debt.

Recently a client found an employee had used a company credit card for personal expenses for the second time. On the first occasion, the client issued a reprimand, asked the employee to sign a policy detailing use of company credit cards and asked that the money be repaid. The employee was a keen and enthusiastic member of the team and my client had been swayed by his affection for the employee. It should not have happened again, but it did. The employee admitted the second offence, but only when asked to produce statements and bills. This time there was no option but to terminate the employment.

Checking an applicant's credit history is easy as long as you have signed permission. Baycorp offers a low cost service. Checking conviction records is sensible for senior positions or those with access to product or money. The process of completing the criminal check form can be enough to flush out the serious offenders.

Put process controls into your business.
It may not be practical to split functions between two or more people, but make sure accounts are reconciled regularly to mitigate loss and have dual signatories on cheques. Don't forget the petty cash. Make one person responsible and ensure it is kept in a locked cabinet. Carry out stock takes more than once a year. Spot checks can provide enough uncertainty to dissuade a tempted employee.

Should it happen, talk to an expert and make sure you follow fair procedure. "Instant dismissal" allows you to terminate employment without notice for serious misconduct but you can't fire someone on the spot! Many employers have found themselves at mediation because while they can prove misconduct they did not use the correct procedure.