Procurement Fraud in the IT Sector 153
TopShelf writes "IT staff usually enjoy unrivaled access to the deepest details of an organization's structure, and all too often, some submit to the urge to use that knowledge for nefarious purposes. Baseline Magazine explores how how Tech Insiders Cheat Their Employers, with examples of executives creating their own vendors to which fat contracts are awarded. Perhaps the most galling case involves a director in the New York City Chief Medical Examiner's office who is accused of scamming FEMA in the wake of the September 11, 2001 terrorist attacks."
Unreported cases (Score:4, Insightful)
... as opposed to ... (Score:4, Insightful)
As opposed to creating whole outsourcing companies to manage contractors during an outsourcing push. Or an executive personally subcontracting a building project at a bid below the rest of the local builders. Or the usual everyday case of standardizing on vendors that appear heavily in the executive's personal stock portfolio.
Encourage loyalty (Score:5, Insightful)
But for most employees, instilling loyalty and pride in the company is the best disincentive to theft. It's also the best way to increase productivity.
How does a company do that? Pay employees what they're worth, don't overwork people, be ethical in your business operations. Basically, it's the golden rule. Treat your employees the way you want them to treat your company. Your employees will take care of the rest, and the money will roll in.
It's too bad that most companies are only in business to line the pockets of the top execs this quarter, and damn the next financial period; we'll figure that out later.
You have to trust your people (Score:4, Insightful)
Singling out IT managers as potential sources of fraud is disingenuous. ALL managers have the potential for fraud, because they have the access and the authority to commit the crime.
Poor Control Measures? (Score:3, Insightful)
At least 4 people see a cheque before it is signed and sent out, two signatures are needed on the cheque and one from someone like a manager on the form requesting it. If I want a printer cartridge, I have to fill out a form, get my line manager to authorise it, and then give that to the secetary - who also checks everything, then when she places her order it has to be signed off by her boss. Etc etc.
Control measures are fundamental to reducing exposure to fraud or theft IMHO. Trust me, I'm an accountant.
Re:You have to trust your people (controls help) (Score:3, Insightful)
"invoices were often hand-delivered to Motschenbacher who, in turn, would hand-deliver the Buca payment to EDP"
If your business processes are so pathetically broken that the same person processes invoices and writes the checks, your problem has nothing to do with IT having too much access to the company's nervous system.
Re:Encourage loyalty (Score:3, Insightful)
Too true. The best part of is that these clowns get to walk away with insane severance packages after running companies into the ground that no mere mortal outside of this priviledged class will ever see. I'd love to be able to completely and utterly fuck up at my job and be "severed" with several years salary and other lovely parting gifts.
a never ending cycle... (Score:2, Insightful)
Re:Oh Crap! (Score:1, Insightful)
Can you hurry and publish your blog. I'm really eager to hear what you have to say on the topic. I bet it's insightful and spot on the money. Wow, I'm getting hot just waiting.*
*The above sentence is a fictional depiction and in no way represents my actual feelings about what you may have to say about this topic.
Who is scamming whom? (Score:2, Insightful)
I didn't find this in the article, but let's see. New Orleans was built below sea level, and the problem was just a matter of time. The US government has decided to take my money to pay for the problems in New Orleans? That sounds like a scam in and of itself.
Check out this opinion [nytimes.com]
The basic point is that the US government is buying votes with your money, including subsidizing insurance in flood planes with your money. Gee, that encourages it, but the worst part is that people aren't bothering to buy flood insurance, as they know the FEMA will bail them out!
So a scammer scammed a scammer? Big deal.
Re:Encourage loyalty (Score:2, Insightful)
An oxymoron.
KFG
Re:Like ST:TNG? (Score:3, Insightful)
I applaud you.