Risk Analysis - Employee Theft
Although the other categories of Crime losses are of significant concern, it is evident that a reduction in the Employee Theft category can provide the most immediate benefit to a school board.
A further analysis of this category provides a breakdown of these losses into sub-categories, as illustrated in Exhibits 3, 4 and 5.
The Comparative Analysis provided in Exhibit 5 provides an indication of the categories of loss which would benefit the most from focused risk management strategies. The following 4 categories would attract remedial risk management strategies:
- Misappropriation of Funds
- Payroll (fraud)
- Theft – Cash
- Theft- Property
The first 2 categories listed would be losses that would be characteristic to the school board office administration environment,where employees have access to the administrative instruments (computer systems, signing/funds transfer authority,budget and payroll, tender processes,cash disbursements, etc.). The risk management strategies for these risk exposures are described in the following section, and are different than what would be effective for the second two sub-categories of losses.
The second two sub-categories of losses (Theft of Cash/Property) would be more likely associated with a school-based environment, where small amounts of petty cash or board owned property/equipment would be present. These types of losses are usually characterized by a high number (frequency) of low value (severity) losses. The risk management strategies for this group would focus on different elements of risk than what would prevail in a “corporate”or administrative environment.