1. Ensuring that the clinical dentistry you provide
2. is correctly posted to the patient’s account
3. Posting fees and payments to the proper account

The vast majority of offices depend on administrative staff to properly safeguard the financial health of the practice. As we all know, with technology advances in practice management, patient data is often siloed into multiple systems that do not interact. This provides innumerable ways for a dishonest individual to steal income in small “unnoticeable” increments that can quickly aggregate to hundreds of thousands of dollars in embezzled funds. It is very important that dentists and loyal staff implement and monitor proven internal financial controls to prevent the possibility of jeopardizing their livelihoods.

The following efforts are low-cost or free, and can be implemented relatively quickly:

1. You can perform a fast, inexpensive audit yourself. If your practice is large, run reports that provide you with the following data:

• For each location and provider, pull 15 random patient charts from the past month’s schedule. Confirm that the treatment
  performed was posted to each patient’s account and check to see that that patient’s payment (check or cash) was posted both to his or her account and the bank deposit. Then, confirm that the bank receipts reflect the same amount as the daily in-house deposit amount.
• If you do not find any discrepancies in these 15 patient records, your practice is probably clear of embezzlement activity from patient accounts, although this is never guaranteed
• Plan on performing the 15-patient chart audit each week. At the end of your audit, leave the charts at the front desk. Add a note stating you are finished with your audit and the charts can be fi led. If you are paperless, tell your CPA and office manager that you are logging in to review patient records regularly. This is a very non-threatening way of notifying your staff that you review records for your own follow-up needs. It is best if you do not detail these specifics to your staff.
• Support this brief audit process by having your bank statements sent to your home.

2. Lock down your internal controls. The following are essential to creating self-sustaining fraud prevention in your practice:

• Segregate bookkeeping duties between employees to eliminate total financial access by any one employee.
• Control adjustments, write-offs and refunds by reviewing all adjustments and each entry of your monthly adjustment report.
• Implement strict cash processing rules with segregated receivables/deposit personnel.

3. Implement financial monitoring services.

For example, Practice SafeGuard™ is a financial monitoring platform designed by Certified Fraud Examiners who combine a unique array of clinical dentistry and global intelligence expertise. Practice SafeGuard™ will allow you to monitor and protect your income in a convenient way. It’s a web tool that retrofits to your entire accounting history and alerts any device you carry to extreme or unusual transactions, so that you can respond to potential issues instantly. Please visit www.PracticeSafeGuard.com to learn more.
Some of these processes cost nothing to implement compared with the potential loss of thousands. Closely analyze your monthly reports in open view of your staff. Letting your staff members see you pore over the books is not to imply a lack of trust, but to demonstrate that you have an active role in the administration of the business.

http://www.hometownannapolis.com/news/top/2012/02/06-43/Woman-gets-life-in-prison-for-killing-dentist.html

It seems that the greater New York Financial Director of the Girl Scouts needed a little more than cookies with her milk.  Over 2008, 2009 and 2010, its been found that Yaasmin Hooey forged the CEO’s signature wrote checks to herself from a payroll account for everything from subway tickets, to vacations, to diamonds.

She also transferred funds from two non-profit accounts directly to her own!  Quite the brazen act of cash advance, and, of course I have to say… She made quite her own Thin Mint!

Read the Story at Dentistry IQ.

Thanks!

To boot, just like a gang of street kids can harass you with items in your face while your pocket is picked by another party, Thousand’s dental practice started receiving incessant non stop phone calls from a 900# sex line during the two weeks while the money was siphoned.

Not only is it possible that he will not get his money back, but that he may have to pay an early withdrawal penalty on the $400k!

Read the full scary here. Lesson : NEVER let your guard down.

A 34-year-old Mason City, Iowa woman faces up to 10 years in prison if she’s convicted of embezzling more than $80,000 from Central Park Dentistry.

Kiki Sue Jutting is accused of stealing the money when she worked there as office manager.

Police say the thefts occurred over several years.

From this very basic report, we can deduce a few things- Kiki worked for the dental office for several years, and had the trust of her employer.  We can also expect that there was limited review and controls of all accounting functions in the office.

This happens all the time- have you learned the secrets of protecting your office yet by attending one of my seminars?

To test how intent the perpetrator was in paying her former employer,the Judge  gave her a chance, holding off sentencing for six months to see how much she’d pay.

That six-month deadline ended, when the judge learned she’d paid nothing until handing over a $6,000 check. The judge also learned the extent of her scheme may have been far more than her restitution amount and the perpetrator wasn’t taking responsibility, but was blaming her manic depression and her employer for manipulating her.

So the judge sent the perpetrator to a state prison for 20 years!

http://www.naplesnews.com/news/2008/apr/14/woman-gets-20-years-embezzling-naples-dental-pract/

Click here to read this story!

Ohio dentist Donald Lewis Jr. wants to share his pain and have others learn from it. Fifteen years ago, with a full schedule and busy office, Dr. Lewis didn’t realize a sra ff member was stealing from him. It took him three-and-a-half years to recoup the losses and build up his practice again, and it sparked in him a passion to warn others about the ins and outs of scams and schemes in the dental office.

“This has been a IS-year crusade,” Dr. Lewis said, noting that dental schools offer little to no education in business skills, let alone office fraud detection. His Saturday lecture “Doctor, Your Check Bounced Again” offers ways to protect your office from fraud.
Crime insrigated by employees is particularly painful, Dr. Levlis said. Dentists, he said, are trained professionals who want to “do the best job we can” and trust that the staff he or she hires wants to do the same. But sometimes that trust is abused and exploited, and the busy doctor is often blindsided by the scope of the scam and by the betrayal of someone considered a loyal staff member.

A lack of internal controls and employee supervision and oversight are often to blame for office scams, Dr. Lewis said. He urges dentists to have an external, independent audit and lise a forensic accountant not only to make sure revenue and expenses are legitimate, properly recorded and in sync, but also to sniff out discrepancies. “Doctors think of accountants as people to handle their taxes. But (most) accountants aren’t looking at what’s being produced in rhe office , who’s doing collections” or other transactions recorded by staffers. An audit would track those finer details and uncover problems, Dr. Lewis said. Computer fraud is the basic building block in office scams.
There are at least 475 ways computers can be used to manipulate office records, Dr. Lewis said. Altered payroll and receivables records, backdated credit slips and illicit refund checks illustrate just a fraction of computerized records that can be changed to cover theft. Equally alarming is the threat posed by savvy computer hackers.
“Hacking is a huge, huge problem ,” Dr. Lewis said. Installing firewall programs is essential ror an office to protect both employees and patients from identity theft.
While the possibility of an office scam is one most dentists don’t want to think about, Dr. Lewis warns that they “can’t bury their head in the sand.” An undiscovered, long-term scam can lead a dentist to bankruptcy, loss of the practice and reputation, and family break-up. “It’s a very, very horrible time,” he said.