10 tips to 34 prevent fraud in your practice Accountants Andrew Pow and Lizzy Lloyd provide advice for GP partners on how to reduce the risk of fraud in general practice Rate your practice controls Start by answering the following five questions to help rate the financial controls in your practice: Are the practice accounting records overseen by more than one person? Are periodic financial reports produced monthly or quarterly and reviewed by at least one partner? Is any comparison made between results from previous years or months and are discrepancies followed up? Is there a designated finance partner and do they have a clear understanding of the practice’s financial systems? Are the people who open the post different from those who look after the day-to-day finances? If the answer to one or more of these questions is ‘no’, the practice is at risk of fraud. 1 Keep tight checks on fi nancial transactions Setting up specific financial controls will help reduce the risk of fraud. For example, when dealing with cheques, have a minimum of two cheque signatories, of which at least one should be a named partner. When 2 Pulse February 2019 cheques are presented for signature, supporting documentation should be reviewed to ensure payments are for bona fide expenses. When payments are made online, supporting documentation should be presented to a partner for review. The BACS forms should be signed as approved to provide evidence that the authorisation stems from a partner. Give only partners the power to authorise standing orders and direct debits. Decide on a level, say £750, above which orders for office supplies, drugs and medical supplies should be authorised (and evidenced as such) by a partner. A partner should check the practice bank statements and seek supporting evidence for any unusual transactions. The partner should also examine the bank reconciliation each month to look for outstanding items. Share the burden Partners in GP practices often take little active part in the practice’s financial affairs. Even if there is a designated finance partner, their time is under pressure and they frequently rely on practice managers to look after most aspects of the practice’s finances. But the burden of financial responsibility for GP practices should never rest solely with the practice manager. Given the role’s already wide-ranging remit, this is an unreasonable expectation and at least one GP partner must be involved. 3 Segregate duties Often insider frauds are only discovered when other staff members become involved in the finances. Consider appointing a deputy who can take over the role when the practice manager is away. Also, split tasks so that, for example, the person writing out the cheques is different from the person recording the expenses on the accounts software. And the receptionist collecting cash from 4 patients should be different from the person recording the amounts received. Review the payroll From creating fictitious employees to running more than one payroll each month, there are many ways for a staff member to defraud the practice payroll. To guard against this, a critical review of payroll reports should be carried out by someone other than the person who processed the payroll. This is likely to be a GP partner who should make sure they recognise all the names on the list and look for warning signs such as unexplained increases in staff costs, or staff costs being higher than average. 5 Keep a receipt of all cash transactions Safeguards should be established for recording, accounting and receiving cash coming in. This is particularly relevant for dispensing practices because the increased amount of cash flowing through the practice makes it easier for someone to take unrecorded money out of the practice. Where the practice receives money from patients over the counter, ► 6 Fraud in general practice is an unpalatable business. Seeing money earmarked for patient services, staff wages or GP drawings disappearing into the pocket of an anonymous fraudster – or possibly even worse a practice insider – is hard to stomach. But the rate of fraud in medical practices is on the increase and GP partners need to understand the risks and take steps to protect their business. Unfortunately, in most cases the fraud is only spotted when the money has been siphoned off into the fraudster’s bank account. The best defence against fraud is to be vigilant and prevention is key. This requires a proper system of financial checks and balances. Here are 10 tips on how to protect your practice against the risk of fraud, including how to implement robust financial controls.