Monthly Archives: November 2012

Minimizing Legal Risks of Employee Blogging

Although blogging has been around for some time, personal blogging has recently exploded. As of 2012, there are an estimated 31 million bloggers in the United States alone. Personal blogging does not require superior technological skills or payment for the instant worldwide publication of a blogger’s personal thoughts. These blogs pose a potential risk to dental offices.

Unfortunately, employees often write about the owner of a practice on personal blogs. Since many practice owners do not monitor or consent to the publication of content posted on their employees’ blogs, office policies should be established that clearly state not only blogging guidelines, but social media guidelines.

Dental practice owners have discovered that employees are posting confidential information on their personal blogs, such as details about their work day as well as patient information. Many employers have terminated employees because of a blog post or as a reaction to an employee’s blog.

The extensive use of blogs as a personal outlet for employees has lead to an increased risk of employer involvement in litigation. A practice owner may be sued by a disgruntled former employee after his or her employment is terminated due to the content of a personal blog, or even by a patient, if the employee posts confidential information about a patient that is protected under federal law.

As a matter of risk management, practice owners must have a clearly defined and specific Internet usage, blogging and social media policy in place. A practice owner must ensure that their policy clearly states what statements may and may not be made about their patients, their work, their colleagues and their employer. In addition, the Internet, blogging, and social media policy should mandate that employees comply with all HIPAA regulations regarding the confidentiality of patient information.

By implementing an Internet usage, blogging and social media policy, practice owners may be able to limit their liability exposure and ensure compliance with federal law.

Employee Embezzlement – Employers Beware

            Statistically, approximately 40%-50% of all veterinary practices will be hit by employee embezzlement. Many incidents of embezzlement are committed by employees that work in finance and accounting positions within the practice. 

            The most common methods of employee embezzlement include  pocketing cash from patients, stealing petty cash, removing cash or checks from the daily deposits, forging endorsements, writing checks to phony vendors, writing duplicate accounts payable checks, stealing prescription medications, and returning supplies to vendors for a refund.  

Practice owners should be on the lookout for stale items in reconciliations, as deposits or checks not included in reconciliations are an indicator of employee theft.  Another red flag regarding employee embezzlement is the excessive voiding of checks. Excessive credit memos are often used by employees to cover up embezzlement. 

            It is also prudent for a practice owner to ensure that their general ledger is balanced.  Employees cover up embezzlement with excessive purchases, whereby fake payees and vendors are often used to convert funds into an employee’s personal account. In addition, a common method for employee embezzlement is altered time sheets.  Employees may falsely indicate that overtime hours were worked by altering the time sheets.

            In order to avoid employee embezzlement, practice owners should implement the following ten (10) tips:

  1. Have bank and credit card statements delivered to the practice owner’s home for personal review.
  2. Review checks and debit transactions with the statements.
  3. Either personally review business checks or require two signatures for all checks. 
  4. Run an audit trail at the end of every week.
  5. Run periodic reports for account receivable and check the report against bank deposits. 
  6. Make all deposits personally.
  7. Review the daily reports. 
  8. Ensure that a copy of the bank reconciliation is attached to each monthly bank statement and require that it be reviewed by two parties.
  9. Do not allow finance or accounting personnel to be signers on all bank accounts.
  10. Ensure that checks received in the mail are immediately endorsed by a two-person team responsible for opening and processing the mail.

            By implementing these ten (10) tips, a practice owner can effectively manage his or her exposure to the increasingly common (and costly) occurrence of employee embezzlement.