3 Ways to Keep Your Credit Cards Out of The News

#Business

Erin Werra

by Erin Werra

Erin Werra Approval Appraiser

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In the school business office, protecting assets just comes naturally. We often imagine fraud in the form of a shadowy hacker draining accounts from overseas. In reality, fraud protection is just as crucial close to home. Here are three practical ways for you to keep your district credit cards safe.

Ironclad approvals

A fraud-resistant culture is built by treating approvals with respect. Administrators must accept their roles as stewards of public funds and peoples’ livelihoods. That means realizing the gravity of the approval button—reimbursement is no mundane task. The electronic signature of an approval indicates three things:

The expenditure has been thoroughly reviewed.
All required documentation is present and complete.
The approver believes the expenditure is appropriate and eligible for reimbursement.

Administrators are busy people. Auditors and public opinion aren’t willing to forgive slips due to heavy workloads. School business officials work tirelessly to instill a sense of ownership in their leadership teams, but it's not always easy to convince administrators to treat the district's money as if it were their own.

It’s always tempting to trust, but trust without verification is a recipe for disaster. Fraud can originate from within the district just as easily as outside of it, so trust must always be built on appropriate documentation

What is appropriate and eligible?

Three questions help determine if a claim is reimbursable.

Is it beneficial to students and teachers? This can be a direct benefit (supplies, classroom items, safety or health services, occasional special treats) or indirect investment—think professional development courses, networking events, conferences, and travel costs involved in these processes. Spending happens—as it should. The concern pops up when it’s difficult or impossible to see the connection to teaching, learning, and safety in schools.

Is it compliant with the district’s code of conduct? Even if administrators personally feel an expenditure is legitimate, the district handbook offers the final say. For example, if the district policy is to eschew alcohol at all company events, consider alcohol non-reimbursable—no excuses or exceptions. If approvers ignore policies, turning a blind eye to inappropriate spending, or accept incomplete documentation, they increase risks of scrutiny, criticism, or even fraud.

Is all documentation present? If not, don't approve the reimbursement with the idea of getting back to it later. If even one purchase slips through the cracks, big trouble might be looming down the line.

Priceless transparency

Achieving a high level of transparency boils down to a culture of accountability and a thorough process for documentation. Internal controls remove temptation and expedite fraud discovery.

Produce and share an organizational chart which shows the progression of approvals throughout the district and school. Employees know what to expect when submitting a reimbursement request, and approvers know their actions are transparent to the group.

Reimbursement options can be pre-set to reduce errors and fraud, but this also means it’s important to plan for anything your employees may need reimbursement for. Reimbursement can also be limited to a certain date range (for example, if they are related to a specific event or conference). Reimbursement options can be restricted to departments, FT or PT staff, or other subsets of employees.

Certain systems may also allow administrators to approve pre-expenditure reimbursements, meaning employees can plan ahead for costs and update the request after the event. Final approvers will see a prompt for the exact amount to reimburse and documentation to be added after the event, eliminating the possibility of approving without documentation.

Finally, make it a requirement to pay employees just like any other vendor using the same processes and documentation. This gives another layer of audit security and minimizes cash handling errors or fraud.

Costs add up daily as busy school districts invest in everything from professional development to supplies to recognition events. It’s never too late to improve your processes and protect your assets.

Follow-up resource: What is ePayables?

Looking for alternatives to outdated reimbursement options? Look no further than ePayables.