The reputation of a leader is based on the comprehensive management of all elements of the organization. He must ensure that the basic efficiency, reliability and character of his company is unblemished. A phantom employee can ruin a ministry’s financial integrity and the reputation of its members. Here is a description of the common “phantom employee” scam and how you can use fraud prevention to protect your organization.
What is a Phantom Employee?
Con artists can dream up the craziest schemes to steal money. A fake, ghost or phantom employee is someone collecting a paycheck who doesn’t do any work. This scam requires a supervisor or manager working for the organization to authorize and add the phantom employee to the payroll system. This is like an inside man in a bank heist. Time and wage rates must be updated. The paycheck is sent somewhere. Usually, direct deposit is used. Someone “real” picks up the paycheck for the “fake” employee.
Confidential Fraud Detection
Timely fraud detection audits are necessary to maintain control of your organization. The financial integrity of your ministry or organization depends upon proactive action.
The first challenge is to identify a problem. A con artist will want to hide. Direct all managers to do a performance review of all employees. Look for red flags. Searching through personnel records is the most unobtrusive way to find the phantom employee. Another way is to look at computer permissions. Who is entering the information for the phantom employee? That supervisor is probably the guilty party.
During this entire process, confidentiality must be maintained. You must determine the guilty insider on your staff. You must keep that supervisor or manager out of the decision-making loop. Look for body language showing nervousness.
Once you sense a potential problem, actual fraud detection can be accomplished with a surprise physical head count or pick up of paychecks with identification.
Church and Ministry Financial Fraud is a Crime
The bottom line is that fraud is a crime. If a bank direct deposit account is involved, you might be able to contact the bank for assistance. They might have more complete contact information on the guilty parties. Once you have identified the inside and outside con artists, you may try to get one to implicate the other.
Phantom employees are criminals. You need to document your actions for the police. You might need to prove your case in a court of law. Fraud prevention is essential to protect your non-profit, organization or business.
Protect Your Church’s Financial Integrity
Financial integrity is important for the bottom line. When a ministry has a fraud detection plan in place, it shows commitment, seriousness and character. Fraud prevention can be accomplished with frequent audits. If you are concerned that your church or ministry is vulnerable to fraud, or you suspect that a dishonest employee has created a “phantom employee” account, contact fraud prevention experts at Weeds in the Garden and we’ll help you detect, prevent and recover from fraud.
