Suspicious Behavior

May 1, 2005

We are a small family practice with a practice manager who has been here about a year. Even though we've always been satisfied with her performance, we have recently discovered evidence of stealing. How do we proceed?

Question: We are a small family practice. We have a manager who has been here about a year, and she has always been great. Last week, though, we discovered some pages missing from the receipt book and some other missing records. We fear that she is stealing copays. We don't want to dismiss her without proof, but once she sees we are sniffing around, she has access to so much information that she could easily do some real damage out of spite. How do we proceed?

Answer: I hate to say it, but this is happening much more frequently these days. Generally, if you suspect fraud, it is probably there. However, employees are innocent until proven guilty so an investigation is warranted before you terminate her employment. In the meantime you are nervous and suspicious of the employee - and you should be.

For one thing, you should go back and retrace your background check or reference check. Call her past employers immediately and ask specific questions about embezzlement. If you don't typically run background checks, you need to get in the habit of doing so. It may be too late in this case. To do background checks, you will need to get a written agreement unless the topic is already covered when applicants sign their employment applications.

Take these steps, too:

1. Make sure that she does not have access to your bank account number and Social Security numbers. If she has access to them at work, make sure she does not have a copy of them at home.

2. Inform your bank of what is going on. It may have a suggestion as to how to handle the discovery phase. In particular, make it clear to the bank that check-signing privileges are henceforth limited to the physicians. The bank is responsible for catching suspicious transactions. Give it a heads up.

3. Get your accountant involved, too. Ask for an audit of your books. If your accountant finds evidence of embezzlement or fraud, contact the police immediately and press charges.

Once you are comfortable that you have taken all precautions with your bank account and employee data, and you have in your possession keys, etc. (you may have to change your locks) then confront the employee.

Call the employee into your office and have the conversation. Ask more questions of her. You do not have to justify your inquiry but tell her why you are asking the questions and discuss the matter. If you are not happy with her answers then consider termination of employment. If you live in an "employment-at-will" state, you don't need a reason to terminate the employment relationship as long as it does not violate any employment discrimination law.

Ask her to leave immediately and make sure her access to your IT systems is revoked immediately. Prepare all separation papers and make sure you follow all mandated termination procedures. For example, some states may require that she be given her last paycheck immediately upon termination.