The Associated Press reported yesterday that there was little sign (from its analysis) that former New York state Gov. Elliot Spitzer used taxpayer money or campaign funds to subsidize his visits with prostitutes. His state-issued credit card also showed no outward sign of having been abused for extracurricular pursuits.
I can’t say whether he used public funds or not, and federal investigators have yet to comment. But it started me on a stream-of-consciousness series of questions in a business context: How easy would it be to disguise (bury) those kinds of transactions? What if Spitzer were my employee? What kinds of safeguards would I want to have in place? Here’s what I came up with:
- Make sure that the person in your company writing the checks is not the person reconciling the statements (unless you, the business owner, are holding both positions).
- Restict the number of people who have company bank cards or company credit cards.
- Ask for receipts from employees for all business-related purchases.
- Always review bank statements (once reconciled) and financial statements–don’t abdicate that responsibility, even if you delegate the minutiae of it
- Hire outside advisors (such as accountants) who can direct a practiced (and objective) eye over your company’s financial condition.
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