All organizations are subject to employee theft. But stealing $1.2 million worth of fajitas is pretty unique. And it's a lesson for any business owner.
First, let's establish this fact: The Cameron County Juvenile Justice Department in Texas does not serve fajitas in its cafeteria. But that didn't stop Gilberto Escamilla, a county employee, from allegedly ordering $1,251,578 worth of them over a nine-year period.
"If it wasn't so serious, you'd think it was a Saturday Night Live skit. But this is the real thing," district attorney Luis V. Saenz said in this report from The Brownsville Herald.
Escamilla, who ordered food for the facility, discovered a loophole: No one checked his work. So even though fajitas were not on the menu, he would still (allegedly) order up the meat from two suppliers, receive the product, and then take the meat and resell it to a bunch of his existing customers. A subsequent investigation showed a "total failure" in the organization's approval process. Also, no one seemed to notice that the department routinely exceeded its purchase budget.
So how was the alleged theft discovered?
It came to light in a way that other employee crimes are commonly discovered: Escamilla took a day off. Bad timing for him. While he was away for a doctor's appointment, a call came in from one of the department's meat suppliers that it had an 800-pound delivery of fajitas on the way. When told that the kitchen didn't serve fajitas, the perplexed driver said that he had been delivering fajitas to the department for the past nine years. Escamilla was questioned and admitted the crime.
Escamilla has not been convicted of any crimes, so let's not prosecute him yet. However, his story is a very common one.
It's a story about an employee stealing from his employer -- cash, inventory, fake deliveries of fajita meat -- and no one knows about it for years. Why? Because the employee is dedicated, loyal, and friendly. More important, that employee is a hard worker -- so hard a worker that he never seems to take any time off. He works through the holidays. He declines vacations. He's extremely committed to his job. Maybe there's someone like this in your office.
If so, then there are plenty of internal controls that you -- and even the smallest of small businesses -- need to set up. Segregating the duties between ordering, receiving, and paying are among the most basic. Getting bank reconciliations performed by an outsider helps to uncover any discrepancies. Requiring signatures on larger purchases is recommended. But the most important internal control you need to have in your business is this: Make sure you require that all employees take vacations.
When an employee is forced to take time off, someone else has to fill in. This has two big benefits. One is that people in your company are cross-trained on one another's jobs just in case an employee unexpectedly leaves. But more important -- and as I've seen in case after case of internal fraud -- the substitute employee has the opportunity to question why things are being done and raise an eyebrow if something seems amiss.
Do you have this basic internal control in place? If not, then think fajitas.