08 Oct Could employees and contractors be working together to steal from your business?

A business may discover missing stock, unexplained payments or repeated security breaches and assume that one dishonest employee is responsible. But some losses involve more than one person. An employee may know the internal process, while a contractor, driver or supplier has the means to move goods or make an irregular transaction appear routine.

That possibility deserves investigation. It does not mean every unusual interaction between staff and contractors is suspicious. The aim is to establish what happened through records, observation and corroborated information.

How can internal collusion happen?

Employees and external parties may have different pieces of access. One person can authorise a transaction or stock movement; another can collect goods, submit an invoice or leave the site with a vehicle. If controls depend on those people checking each other’s work, an arrangement between them can be difficult to detect.

Potential examples include:

• Goods released to a driver without the required authorisation
• False or inflated delivery, collection or return records
• Stock written off as damaged but removed from the premises
• Invoices approved for goods or services that were not supplied as recorded
• Contractors being allowed into areas outside their approved scope of work
• Access cards, keys or system credentials being shared

These are scenarios to examine, not proof that collusion has occurred.

Warning signs that warrant a closer look

One discrepancy may have an ordinary explanation. Repeated patterns across transactions, shifts or deliveries are more useful to an investigator.

Questions worth asking include:

• Do shortages repeatedly involve the same products, supplier, driver or shift?
• Are exceptions approved by the same person?
• Do physical stock counts match the records of what arrived and left?
• Are contractors regularly admitted without being checked against an approved personnel list?
• Are delivery or collection procedures being bypassed for particular people?
• Have staff raised concerns that were never properly examined?

A pattern helps define the investigation. It should not be used to label an employee or contractor guilty before the facts are established.

Follow the transaction from beginning to end

Begin with a clearly defined loss or irregularity. Identify the goods, payment or event involved, then map each step: who requested it, who approved it, who handled it, who recorded it and who confirmed completion.

Compare independent sources where possible. A delivery note may be checked against a purchase order, gate register, vehicle log, stock entry and relevant CCTV footage. If records conflict, note the discrepancy and investigate why it arose.

Preserve original records and limit access to the people conducting the enquiry. CCTV and electronic logs may be overwritten, so they should be secured promptly. Keep a record of who collected each item of evidence and when.

Check the controls around contractors

An approved contracting company does not automatically mean that every person it sends to your site has been identified, screened and authorised for the work.

Review whether the business has an up-to-date list of contractor personnel, defined access areas and a process for substitutions. Confirm who can authorise after-hours work, collections and changes to the scope of a job.

Where the concern involves identity or access, contractor and workforce screening may help the business verify the people assigned to sensitive roles. Screening should be relevant to the position and handled with appropriate consent and protection of personal information.

When can an undercover investigation help?

Sometimes records show that goods disappeared or a procedure was bypassed, but they do not reveal how the arrangement works in practice. Staff may also be reluctant to report what they have seen if they believe several people are involved.

A properly scoped undercover workforce investigation can help identify recurring behaviour, security loopholes and possible links between incidents. Information gathered in this way should be assessed alongside documents, footage and other evidence. It should not replace a fair process for anyone implicated by the findings.

SSC Legacy’s undercover workforce investigators provide structured reporting on workplace theft, misconduct, policy breaches and security weaknesses. The method and scope of an investigation should be matched to the business’s specific concern.

Investigate the weakness as well as the people

If an investigation identifies wrongdoing, management still needs to understand which controls allowed it to continue. Was one person able to approve and release goods? Were contractor substitutions unchecked? Could a stock adjustment be made without independent review?

Addressing these weaknesses helps the business reduce future losses, regardless of the outcome of an individual case.

Get independent help with a suspected pattern

If losses repeatedly involve the same processes, personnel or external parties, avoid making accusations based on association alone. Secure the records, define the questions that need answering and obtain an objective assessment.

Contact SSC Legacy to discuss suspected internal collusion, recurring losses or an investigation involving employees and contractors.