Immunizing Your Veterinary Practice Against Theft

• Immunizing Your Veterinary Practice Against Theft.pdf (104.2 KB)

Question: How can you stop theft?

Answer: Who hasn’t suspected that money is mysteriously disappearing from the practice? Wondered about flea/tick/ heartworm preventive and pet food vanishing? Noted exceptions in the controlled-drug log? You’re rightly concerned:

In a recent AAHA survey, 86% of respondents said employees had stolen from their veterinary clinic.¹ Perhaps the other 14% had yet to notice. Security experts estimate that as many as 30% of all employees steal and that another 60% would steal if given sufficient motive and opportunity. No practice is fraud-proof. Your practice is not immune.

See Cures for the Common Fraud for tips on preventing theft at your practice.

Thieves Target Veterinary Clinics
Veterinary practices are attractive targets because they are generally small businesses with minimal internal controls and trusting owners. Because of their size, veterinary practices often have fewer checks and balances and less segregation of duties—assigning different people different tasks—than larger businesses.

Internal Controls
Internal controls are necessary to deter employee fraud, embezzlement, and theft. They are the ounce of prevention worth a pound of cure. CPAs are trained to evaluate internal controls, so as a preventive measure, invite your CPA to review your systems and processes.

Shocking, But Common
One of the largest embezzlement cases I witnessed first-hand was at the Fellowship of Christian Athletes. Over a 7½-year period, the associate finance director, who had worked there for more than 20 years, stole more than $1.1 million. In veterinary clinics, we’ve seen it all—spouses stealing from one another; partners cheating each other; trusted hospital managers with a dark secret; receptionists enjoying new cars, boats, and lavish vacations financed through criminal acts.

As a small business, you may not be able to totally prevent theft, but you can take aggressive steps to deter employee deceit. The secret is not to become too trusting. The typical embezzler appears loyal, and trustworthy and is often a long-time employee. Always exert healthy skepticism, especially toward those you trust most.

Establishing and adhering to strong internal controls is not costly, difficult, or time-consuming. You have an obligation to steer your practice away from harm.

Immunizing Your Veterinary Practice Against Theft
Fritz Wood, CPA, CFP
Reference

1. trends.aahanet.org/NEWStatArticle.aspx?key=262b8156-e583-4b3b-a9b1-0000fe4448ff&id=NSV8I13.