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The waiting game

How to avoid being caught out by fraud

Sad though it may be, GPs must be on their guard against possible fraud by partners or staff ­ Dr Stephen Gardiner and Deb Farnworth-Wood offer some practical advice

The recent imprisonment of a GP for defrauding his practice, along with the problems faced by his remaining partners, highlights the need for GPs to keep their eye on the ball when dealing with practice accounts.

Although fruad is an area many doctors choose to avoid, by following a few simple rules doctors can protect themselves from legal, administrative and financial hardship.

Remember that any practice is potentially at risk from dishonest partners or staff. Theft can take several forms, ranging from cash to goods. Taking unwarranted time off, or using the internet and practice phone system for your own purposes, is also a form of theft.

Systems should be in place to deal with these areas and all partners should have a basic understanding of these systems and should receive a copy of the annual accounts.

The simplest and probably the most important rule should be that all payments ­ whether by cheque, autopay or bank transfer ­ should be authorised by two people. Generally these should be partners, but some practices allow their manager to be an account signatory. In our practice we use the pay-flow system which allows multiple payments to be made with one authorisation. This means less paperwork but we still require two signatures.

Online banking is increasingly used in general practice. This permits accounts staff to prepare payments but gives the facility for two separate people to authorise transactions using passwords. We do not use this system as we fear that if asked to authorise a transaction when busy or running late there would be the temptation for GPs to give their password to a member of staff to do it for them.

Paper records also provide an audit trail of signatures and it is easier to detect a fraudulent signature than to identify an individual with access to a password.

All invoices should be authorised for payment by the practice manager or accounting partner who should query any unusual charges. Invoices should be presented to partners with the cheque/

pay-flow sheets so they can satisfy themselves the payments are genuine before signing. Common fraudulent schemes include setting up a friend or relative as a paid employee and setting up a false supplier using an existing employee's pay-flow number.

Payments for services, such as signing passport photographs, are often made in cash. It would be easy for partners and locums to keep these payments and not declare them as practice income. Petty cash fraud can also include using false receipts and outright theft of cash. Petty cash expenditure should be kept to a minimum and receipts obtained and checked by the practice manager.

Partners must not bully staff for cash from the petty cash tin. Most fraud starts out small and the partner who takes £10 for lunch from petty cash and does not replace it, or sign for it, risks theft by employees who will simply copy the partner's actions. Other partners may not be aware this sort of thing is going on. Really it is best if there is no petty cash expenditure, and no cash should be paid without an invoice or receipt

If fraud is suspected then initially speak to the practice accountant who should be in a position to recognise anomalies and who would be able to perform a full audit if needed.

A couple of final and very important points. First, major fraud usually comes about because partners do not want to get involved in practice finance, preferring to take their monthly drawings and only going through financial matters once a year at the annual meeting with the accountants. This is a mistake. Monthly bank reconciliations will spot the major frauds ­ unless of course the reconciliation is being carried out by the fraudster!

Second, practices should have a dedicated finance partner who should be given time to do the work. Leaving everything to the practice manager is not a good idea.

The 'dos' of avoiding fraud

 · Have a dedicated finance partner

 · All invoices must be signed by two people

 · Compare invoices against cheque/pay-flow sheets to ensure they are genuine

 · Have bank reconciliations once a month

 · Order supplies little and often

 · Keep petty cash secure

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