The ugly truth: Why veterinary practice cash isn't flowing - DVM
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The ugly truth: Why veterinary practice cash isn't flowing
A new survey shows the many ways theft hurts your veterinary practice


DVM360 MAGAZINE


Why veterinary practice?

It's challenging for small practices to implement strong internal controls. Vital job duties can't be properly segregated when bookkeeping and administrative functions reside in only one or two employees who likely have responsibility for valuable assets like cash, checks, credit cards and inventory, and who also manage computer systems and data input. However, in large practices, more transactions occur every day, so there are more opportunities for theft.

Practices of all sizes were represented in our survey. Two practices had less than $150,000 in gross revenue during 2009, while 28 practices (15.6 percent) had revenue exceeding $5 million. Practices with gross revenue of between $1 million and $2 million comprised the largest part of the sample (35.6 percent), followed by practices with revenue between $2 million and $3 million (23.3 percent).

Fraudster demographics

The people who commit fraud in veterinary practices come from all ages and income levels. The following are a few of our key findings:

> 69.3 percent of the fraudsters had been employed in the practice for 3 years or less. However, 7.6 percent were employed for more than 10 years.

> 38.7 percent of the fraudsters had an income level between $20,000 and $35,000. However, 5.9 percent had income of greater than $75,000.

> The most common job position of the fraudsters was receptionist (33.6 percent), followed by technician assistant (12.1 percent), and veterinary technician (10.3 percent). Even veterinarians were reported, including associates and partners.

Duration of fraud

According to the 2010 Report to the Nations on Occupational Fraud and Abuse, survey participants reported that frauds lasted a median of 18 months before being detected. The respondents to our survey reported that fraud occurred for a shorter duration, on average.

According to our survey:

> 19 practices reported that the fraud occurred for an unknown duration

> Six practices reported that the fraud was a single occurrence

> The average duration amongst the remaining 90 practices was 12.22 months.

However, it's important to recognize that some schemes lasted for many years before detection finally occurred. The resulting losses were stunningly large.


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Source: DVM360 MAGAZINE,
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