ARE YOU RUNNING A HOTEL BUSINESS, BUT THE SALES FIGURES ARE NOTE MAKING SENSE?

(2a.3) Procurement Fraud Schemes

Procurement fraud schemes refer to frauds committed by procurement department and vendors. Some of the most common fraud schemes involved are the following:

• Overbilling fraud scheme refers to procurement staff collaborating or conniving with vendors to inflate product or service prices and the excess cash is then transferred to the staff private account.
• Kickback scheme happens when the hotel staff requests for kickbacks or tips from the vendor as a condition to accept Request for Proposal or be included in the bid process or award of contract.
• False supplies – legitimate requisitions and purchase orders are made but the suppliers were not delivered by the suppliers, but records have been created in the inventory record as being supplied and supplied
• Ghost vendor accounts – registration of ghost vendors in the vendor list and directing payments to the accounts
• Procurement and receiving schemes – Falsifying the inventory receiving records and then diverting the supplies on transit to unlawful locations for personal use
• Computer Automation Fraud Scheme happens when the hotel manager initiates automation of the hotel business processes or replacement or update of the existing software without due consideration to the users’ needs and functional specifications for personal gains. In this case, the manager connives with the software vendor to inflate the prices or poor-quality software that does not meet the users and functional specifications of the hotel business or abonnement of the project once payment has been received by the vendor.

(2a.4) Other Asset Fraud Schemes – Time Theft, Company Pool Cars, Telephones, etc. Fraud Schemes

Time Theft – Time is precious, limited and should not be wasted. Office hours are being increasingly under abuse. Many staff are now using the office hours to engage in frivolities and glued to the internet and social media chats and activities using the private phones or hotel phones and compute facilities This has led loss of uncountable business opportunities, errors, mistakes and unaccounted waste of man hours, yet at the end of the month, the company will pay staff salaries and other full entitlements.

Misuse of Company Pool Cars – happens when hotel staff uses the company pool car to run for personal errands without management approval. Other associated issues include negligence on proper physical asset maintenance including vehicles and false claims on asset maintenance

Company Internet Data Fraud /Misuse when employees use the company Wi-Fi or Internet data for things unrelated to the business or shares valid user id and password to friends and associated for personal gain.