The inside man

As is common with many high-action movie plots, fraud most often occurs when there is someone “on the inside” who is orchestrating it all. In the road freight industry in South Africa this could not be truer

Most transport operators realise that the difficulty lies in recognising when there is a problem in one’s company and knowing what to do about it. The general consensus is that when fraud or theft occurs and is reported to the police, that thereafter nothing seems to happen. It then becomes problematic taking action against the suspected employee as the operator has no legal standing. Police tend not to place these kinds of cases as top priorities as they are mostly insurance, rather than criminal cases.

Ronald “Bakkies” Bruitendach, executive director of FRG Forensic Solutions, points out the importance of being able to solve cases quickly. “You need to act quickly when a case of fraud occurs, because if you wait two or three years while the case is going through various legal channels the employee becomes more confident that they will get away with it – and they most likely will,” he explains.

Bruitendach says that the single most important factor for dealing with these cases effectively is knowledge. “As an operator, you have the power to control these incidents long before it becomes a matter for the police.”

A very important factor to be considered right at the beginning of the employment process is that most often, when an employee has committed even a small felony against a company, they are generally fired, rather than the company having to go through the rigmarole of pressing charges. This simply flushes the employee back into the system, to be hired by the next company, where they are probably likely to steal again. Prospective employers should not count on any labour broker to screen employees, and should either screen them thoroughly themselves, or rely on a trusted labour broker with a proven track record. This screening should take into consideration offences that prospective employers have been accused of, not just those where a charge has been made. Although one accusation can be meaningless, multiple accusations suggest a pattern of something more serious.

But how does one know one’s business is being targeted, or is open to being targeted in the future? A major indicator is to look at fuel consumption – if it is way above the benchmark it is likely that something untoward is going on. Of course to keep track of this, business owners need to stay up-to-date with what the current fuel benchmark is. Another factor to look at is if any of your employees have high personal debt. This means that they may need to use your business as means of extra income, often taking small amounts here and there where they feel it will go unnoticed.

Often too much trust is placed in members of senior management who have access to funds and accounts. Alcohol and drug problems can lead to debt, as well as gambling problems. “It’s really important to know your people well,” emphasises Bruitendach. “You need to know who each staff member is, what they’re meant to be doing, and what level of access they have. You should also have systems in place to check on the movement of money and assets.”

Hijacking is naturally a big concern for fleet operators, and often when this occurs it is a passive handover by the driver, who in reality forms part of the hijack team. “The driver gets paid off to hand over the vehicle, or help with unloading and loading,” explains Bruitendach. “When a vehicle is hijacked, first look at your internal systems. No one wants to believe their own people are involved but this is most often the case.” He goes on to say that even the smallest of thefts should be reported rather than brushed off, as this is the perpetrator’s first means of testing the business owner’s security systems.

Of course, not even the best of systems is fool-proof, and it is important to know where the weaknesses are, so that these can be double-checked. A company is left open to attack if the operator is not paying full attention to the running of his business. A lack of competent personnel leaves the system flawed and vulnerable. Having personnel who apply rules as they see fit, or a system where rules are not enforced, leaves the business exposed. If proper procedures are not enforced at all times it allows perpetrators to take advantage. “For example, people will deliberately slow down the system of loading and sending out fleets so that at the end of the day it becomes rushed. It becomes extremely difficult to keep track of what is really going on when working in haste,” says Bruitendach.

Bruitendach also advises that operators should have accurate, up-to-date documentation and proper control over their vehicles. “A common problem is that operators rely on GPS alone to track their vehicles, but generally these devices register that the vehicle is safe within a kilometre from ‘home’. Within this one-kilometre radius is where most hijackings take place.”

The single greatest protection a business owner can have against fraud and theft is knowledge, and Bruitendach cannot stress this enough. This knowledge includes knowledge of staff, detailed knowledge of how every aspect of the business is being run and also knowledge of technical terms such as “fraud” and “theft”. This last component means that if the police or private investigators are needed for anything, the business owner can give an accurate and detailed statement. “Knowledge of these aspects means that fear of the unknown cannot be used against you. The more knowledge you have, the more power you have,” he stresses. He goes on to advise that if police are needed on a matter, one needs to maintain a collaborative relationship with them, even when it seems things are moving too slowly.

Bruitendach also suggests using organisations such as the RFA by means of forums for discussions with other operators as well as to create a database of problem areas such as hijack hotspots. “This means that the same incidents don’t have to keep recurring. The transport community can work together to overcome these problems,” he concludes.