Systems 'set up' to protect money

Published: Monday October 6, 2008

SOME LOCAL CREDIT UNIONS support suggestions that effective checks and balances be put in place to detect fraud in their organisations.

However, they also defended their organisations, saying most already had the vital systems to track such theft.

Director of Public Prosecutions Charles Leacock QC, on Thursday spoke of the need for tighter systems at credit unions after prosecuting a case involving a former credit union customer service representative who stole almost $130 000 from the City of Bridgetown Credit Union (COB). He felt that situations like this should not take months before the fraud was detected.

COB general manager Steve Bell agreed that Leacock's comments were appropriate and said that over the years, they had implemented new risk management policies as well as appropriate information technology systems to make sure that they safeguarded their member deposits at all times.

"I agree. All institutions should have systems in place where they can quickly identify the intention of fraud and make sure it is kept to a basic minimum. We have put strong controls in place and appropriate reporting processes to identify any instances where employees may be attempting to defraud the credit union," he added.

He said they had encountered employees who had been actively using dormant accounts, but once caught, they were dealt with expeditiously.

"In our recruitment process, we screen them extremely carefully to see who is the most appropriate for the job, but you will always have that one person who is bent on doing something wrong," he said.

Belle said he was happy to state, however, that after the incident there had been no more instances where an employee had tried to defraud the credit union.

Clorinda Alleyne, chief executive officer at the Barbados Public Workers' Cooperative Credit Union Ltd, also agreed with Leacock and said it was a constant challenge not only for credit unions but all financial institutions to be sure that their systems were "up to scratch".

She said: "Our paramount duty is to safeguard the savings of our members. For some people it is their life savings and we can't afford to have it taken away, through a lack of vigilance, by people who feel they must gain from money that is not their own."

Alleyne said, however, the credit union was mindful to take measures like the ones Leacock mentioned, including segregation of duties, monthly bank reconciliation, duality of signatures and dual controls, which they regarded as proper measures to make sure members' savings remained safe.

"On an ongoing basis we also review and augment our processes as well as procedures and internal controls to underpin this exercise of safety," Alleyne added.

Barbados Workers' Union Credit Union marketing manager Arlene Floro said they too had already implemented checks and internal controls that would address those issues, should the need ever arise.


Source: Nation Newspapers
http://www.nationnews.com/story/292791490483723.php