The failure by their accountants to identify a long-running employee fraud costing over £300,000 led this large nine-partner practice to appoint AISMA accountants Foxley Kingham. The fraud was discovered by the GPs themselves who, realising that they had not received useful practice advice nor had personal meetings and financial advice for many years, had completely lost faith in their previous accountants.
The fraud had been committed by the former practice manager, now serving a prison sentence, who had been trusted fully with all matters to do with practice finance. So much so that nobody noticed when he awarded himself a significant pay rise. While monthly pay cheque sheets appeared to be offered for review, the summary sheet did not fully reflect the amount leaving the bank account. Staff salaries are the largest expense of any practice apart from partners drawings and hence merit regular detailed scrutiny.
This is not the only example of employee fraud encountered by Foxley Kingham director Chris Howe. “Cash paid by patients for dispensing fees or private reports is sometimes left “in the tin at reception”. It then becomes apparent subsequently that the amount banked from the tin is significantly less than the amount that should have gone into it.” This is just one example of the sort of employee fidelity issues experienced with dispensing practices, albeit infrequently.
Foxley Kingham advised that the newly appointed higher level practice manager should, with one nominated finance partner, make monthly reviews of expenditure, prepare cash-flow projections and generally oversee practice finances on a regular basis.
In addition to meeting the practice on two occasions in April each year to review draft and then final accounts, Foxley Kingham also attends for a full day in September each year for a practice finance meeting and to meet individual partners to discuss personal finance, tax and pension issues.