Wineries at risk of workplace fraud
Wineries are at risk of workplace fraud, and should therefore be clamping down on their systems and tracking procedures to prevent major losses, according to fraud investigator, Dolman Bateman.

Warwick Dolman, Director of Dolman Bateman, says wineries are often prone to fraud committed by their own staff, particularly those in accounting and bookkeeping roles, but that many types of fraud can be prevented.

“Wineries are susceptible to fraud because they have a lot of stock – bottles, corks, wine of multiple vintages etc - which are often hard to keep track of accurately,” says Dolman.

“As well as the possibility of supplies being written off incorrectly, there is also potential for materials to be intentionally over-ordered so that the excess stock can be secretly sold on the side.

“There is also possibility for collusion, either between staff members or between staff and contractors, especially as these areas can often be hard for the management to keep tabs on unless tracking procedures are in place.

“We encountered an instance where a winery was defrauded of $700,000 over three years through false invoices submitted for the delivery of grapes, the fraud being perpetrated through collusion between an accounts clerk and a winery manager.

“This clearly demonstrates the need for every business to have in place a system of procedures and checks that stops this occurring, particularly as many of the procedures are fairly simple.

“These can include undertaking regular stock reconciliation and auditing the results, matching supplier invoices to purchase orders, preparing budgets for grapes and supplies and comparing them to the actuals, and ensuring that all payments are accompanied by supporting documents such as invoices or requisitions.

“There is also the risk that winery owners and managers are caught up running the management and sales side of the business and have little time to pay close attention to the everyday financial operation of the business, leaving it open for fraudsters to exploit..

“As the vast majority of wineries are small to medium businesses there is also the issue that there is often no separation of duties – for example, the person who receives the cheques is the same person who enters them into the books and banks them, leaving the business susceptible to fraud.

“The difficult thing for many businesses is both knowing what to do to upgrade systems, and implementing changes without causing embarrassment to staff.

“Most vital of all is that these procedures are actually followed and are reviewed on a regular basis, preferably by an objective professional who may turn up some holes in your process or identify areas of risk you may not have seen,” says Dolman.

Dolman Bateman has a free online fraud check-up on their website. Any business can go to the website – www.dolmanbateman.com.au – and answer a series of short questions designed to assess the likelihood of employee fraud occurring in their business.

Dolman Bateman specialises in the detection, investigation and minimisation of fraud in the workplace. Warwick Dolman is a founder and Partner of Dolman Bateman, and is both a Chartered Accountant (CA) and Certified Practicing Accountant (CPA).

***
Released for Dolman Bateman by Dennis Rutzou Public Relations.
For further information contact David Lizzio on (02) 9413 4244.