Security in the Purchasing Function 16 Security in the Purchasing Function

You Should Be Able To: Discuss current employee theft statistics. Describe the security problems associated with the purchasing function. Identify methods used to prevent security problems related to purchasing. Create a process to reduce theft and pilferage in a hospitality operation.

Security Problems Kickbacks Invoice scams Supplier and receiver error Inventory theft Inventory padding Inventory substitutions Telephone sales scams

Security Problems (cont.) E-Mail sales scams Operating activities Suspicious behavior

Watch Employees Who: Seem unduly friendly with salespeople Hang around storage areas Needlessly handle keys or locks Make too many trips to garbage areas, bathrooms, locker room, or parking lot

Watch Employees Who (cont.): Requisition abnormally large amounts of supplies Make frequent trips to the storage areas for no real reason Have relatives working for the suppliers Frequently stray from assigned workstations

Watch Employees Who (cont.): Are seen stuffing boxes or packages under a couch Are seen passing packages to guests Permit drivers to loiter in unauthorized areas Have visitors on the work site

Preventing Security Breaches Select honest suppliers Ask other operators about suppliers’ honesty Employee honest employees Prosecute dishonest employees Background/reference checks, integrity tests Design physical facilities to help ensure security

Preventing Security Problems Document cash paid-outs No post office box payments Those who buy should never pay bills Cancel paperwork on all completed transactions Independent audit

Preventing Security Problems (cont.) Secret shoppers Integrity and drug tests Bonding company Trash compactor Enter/Leave through one door Parking Locker rooms Delivery agent concerns

Preventing Security Problems (cont.) Do not rush receivers Physical barriers Time and heavy-duty locks Good lighting in storage areas Closed-circuit television or digital recorders Uniformed guards See-through screens on storage facilities Perimeter and interior alarm systems

Preventing Security Problems (cont.) Separate purchasing activities Compare prices Approved supplier lists Small single-service packages Restrict access to certain items