2. Security in the Purchasing Function16
Security in the Purchasing Function

3. 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.

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

5. Security Problems (cont.)
sales scams
Operating activities
Suspicious behavior

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

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