You might be wondering where am going with this....what with the weird title. I must confess I wasn’t the best in school when it came to that section in English exam they called summary writing, the title could have been a one word or even a simple sentence like..Kennedys idle thoughts...or something close to that. But I must also say that Executives Summaries that i draft are impressive. I have wondering how come an organization can be OK today and tomorrow its no more. How come the world was surprised by the spectacular fall of Lehman brothers, Triton, Barings Bank... (Remember Nick Leeson) amongst others. Is it not the same surprise that a broiler experiences after six weeks? After six weeks of lavish feeding by the farmer i can only imagine the shock the broiler goes through one morning when a KenChick trucker packs outside the farm ready to transport the broiler ...in its meat form. in a broilers world such an event is unthinkable before the end of the six weeks..Actually it’s a highly improbable event...but how about the consequences...very high..Am sure you agree
How is your organization doing today...Am sure it’s doing fantastic..Will it be around tomorrow (am not talking about going concern here)..am sure you are 99% sure it will be..What if the outcome is the other way round? Can you tell whether it will happen..Maybe not (based on past info)...what can you do about it (may be risk management)..Will it work...i think it should...what am i saying...don’t be a broiler chicken....fraud can wipe out your business!! Enough said
Thursday, 6 October 2011
"Banking slip" Fraud and other tales
Banking fraud (in the traditional sense of the word) in Kenya is on the rise. Most of the fraud is being committed by employees in conjunction with third parties. There are also independent fraudsters who are taking advantage of the rise in electronic banking and the increased use of credit cards and debit banks to commit fraud. This post relates to neither of the 2 types of fraud I have mentioned above. For a lack of better word I have decided to call it plain “banking slip fraud”.
It’s not banking fraud in the real sense but, the very existence of banks and people’s reliance on it as a safe and sure way of conducting business through it has led to its emergence and growth. Not many years ago politicians would attend harambees and contribute money in the form of personal cheques. It was a kind of popularity contest with politician who contributed most being able to woo support to his side. But soon we realized that the cheques were just that…mare papers!! Most of them would bounce and the politician was left laughing all the way to parliament. Most institutions of learning decided to reject personal cheques in favour of Money orders or bank drafts.
In recent times Landlords and most institutions including the Tax Authority require a direct deposit into their account and a bank pay in slip is accepted as a ……. But trust human ingenuity/evil minds a bank payment slip is no longer a guarantee that money has been deposited into an account. Some crooks have managed to create bank payment slips on demand. Since bank payment slips don’t have any elaborate/special security features it takes only a printer and there you go.
Many Landlords (especially the ones from Murang’a-I will explain why Murang’a later) who don’t bother to perform bank reconciliations (apparently...they don’t want others to know how much they have in their Equity Bank accounts) are shocked later when they find out that half their tenants have not being paying rent. But the most shocking is that this form of “fraud” is being perpetrated by agents of large taxpayers. Agents especially clearing agents collude with Tax officials officials to released goods whose import duty has not being paid fully. Once an agent receives funds from the importer to pay duty to the tax authority, only a fraction of that is paid through the bank. The rest is shared between tax officials and the clearing agent. The Importer gets a bank pay in slip indicating that the correct amount of duty was paid. Only later on when he is slapped with a tax bill from the tax authority does he realize what has been going on.
People be very worried…there is so much greed and laziness going around……I know I should have given solutions/recommendations…am working on them.
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