Lexington, KY - How many times have you heard someone at work say, “I think we have a policy covering that”? If you are like most employees, probably quite often. You see, businesses/ organizations for the most part have an abundance of policies and procedures. Some have a policy or procedure in place for most everything they do. Others, however, have a limited number in order to govern the most important aspects of their existence. The question is not necessarily how many, how few, how simple or how complex your policies and procedures are, but rather does everyone have access to them, understand them — and most importantly, do they follow them?
Unfortunately, possibly related to today’s economy, we in the Commercial Burglary Unit of the Lexington Division of Police have seen an increase in the number of requests to assist businesses and organizations with investigating internal losses, thefts and inventory shortages. A major obstacle that we as detectives encounter is the lack of policies and procedures or the failure to require consistent compliance to the existing policies.
Policies and procedures should promote consistency, efficiency and accountability. However, a lack of policies, weak policies or policies that are not consistently followed can become like a sieve in which product and profitability flow from your business/organization in a steady stream. Benjamin Franklin once noted, “Beware of little expenses; a small leak will sink a great ship.”
Let me share with you some examples of how these policy deficiencies have hindered our ability to prosecute cases involving possible criminal losses from area businesses/organizations. We were asked to investigate a complaint of an employee who was doing some remodeling work for employer-related projects and keeping some of the surplus materials for personal use rather than returning those items to inventory. Upon interviewing the supervisor of the employee, we learned the supervisor had already questioned the employee about this incident. The supervisor indicated the employee told him the building material was left over from the work project and the material, which was weather sensitive, was ruined overnight due to inclement weather. The employee then told him that he disposed of the material, which was common practice for this organization. The employee verified this statement when he was interviewed a short time later. We discovered there was no policy governing surplus material, whether usable for another job, or if it were damaged or only scrap material, that it be returned by the same employee to the person responsible for the inventoried item. There was no accountability for materials. Surplus materials that could be used on another job to reduce cost were lost and material that was unusable or damaged was not accounted for and properly disposed of. Every person we talked to advised this was common practice for this organization. We had to advise the person who had requested our assistance that, without a policy in place and a protocol concerning this process, a thorough investigation would be greatly inhibited.
Another case with another organization involved employees possibly taking surplus scrap material to the salvage yard and keeping the money for themselves. There were no guidelines forbidding this practice. There were no policies indicating what should be done with surplus materials, who was authorized to dispose of scrap materials on behalf of the company, or what could not be done.
Another case involved a business reporting one of its company trucks being stolen. They believed the theft occurred sometime over a three-month period. The reason they indicated so much time had elapsed before reporting the theft was the fact that employees borrowed the truck all the time. The company just assumed that one of their employees had used it and that it had probably been dropped off at one of the company’s surrounding locations. Only after checking with all their surrounding locations, three months later, did the company realize their vehicle had been stolen. If there had been a policy governing checking out vehicles and checking them back in, with prior supervisor approval, then the theft would have been discovered in a timely fashion.
An example of how investigations can be hampered by policies that are not time sensitive would be the following case dealing with inventory tracking. A concerned citizen advised us of a person who always had a lot of a particular company’s product, still in boxes, that he would personally sell. The citizen thought this was odd and felt that maybe some illegal activity was taking place. We promptly contacted the business to inquire about the possibility of missing inventory from their storage facility. After several phone conversations, the store supervisor finally came out and told us, “I have no way of knowing if we have anything missing. We do inventory every six months, and there is no way of knowing until then, and the next one is several months away.”
Finally, we have noted an increased in the number of investigations into business thefts where employees are the primary suspects. Through these investigations, one common almost insurmountable obstacle keeps hindering our investigations — a lack of policies and procedures controlling access to buildings, offices and safes, as well as the ability to delineate authorized activities. We have discovered that too many employees have keys they do not need in order to perform their duties. Keys are not recovered from employees who are terminating their employment with the company. Locks are not being changed whenever a key is unaccounted for. There are too many employees with access to safes. Safe combinations are not changed when employees with knowledge of that combination leave the business. We seldom encounter cameras located throughout a given business to monitor areas that are restricted to employees only. There is often no way of tracking if employees enter and exit the business during times they are not authorized to be there. These hurdles can make an already difficult investigation almost impossible to bring to a successful conclusion.
Creating, evaluating and enforcing policies and procedures are time intensive, difficult and really just not much fun. However, losing thousands or hundreds of thousands of dollars in cash or merchandise, losing valuable employees and eroding associates’ trust and confidence is a lot less enjoyable. As a matter of fact, it is unacceptable if you strive to compete and profit in today’s economy. Please help us help you by evaluating, strengthening and developing strong and effective policies and procedures. Plug those little holes in your great big ship before your company is treading water.
Sergeant Chris Townsend works in the Commercial Burglary Unit of the Lexington Division of Police.