Segregation of Duties Are Important

We moved into our new home several weeks ago. As we prepared to move, I knew we had a lot of work ahead of us, and we sure did, with more to come. However, of all things, I thought the new yard would be the least of my worries. The fact that the entire yard was already sodded would make that part of my life easier. Think again.

I spent the first week in the new house watering for several hours every morning to make sure the sod didn’t die. Then, a few weeks later, I spent hours in the rain smoothing out the terribly uneven sod with a lawn roller that weighed 270 lbs. I rolled it back and forth, this way and that way. It was the best whole body workout I’ve ever had. Needless to say, I slept well that night.

Having newly installed sod would, I thought, make my life easier, but I still had plenty of work to do. The hard work I am putting in now will pay huge dividends in the future—rewarding me with less work down the road. Segregation of duties (SOD) is similar. It isn’t easy to plan and implement effective SOD, but in the long run, it can save an organization plenty of time and money if it ever has an employee committing fraud or making inadvertent errors.

Remember these five tips to improve SOD within your organization:

1. Don't miss the boat and try to take shortcuts;
2. Make a plan for your SOD and follow through with it;
3. Make sure your employees understand the importance of SOD and their role in implementation;
4. Develop your SOD to eliminate opportunities for collusion among employees; and
5. Even small businesses need effective internal controls.

You are not alone in this fight against fraud. If you ever need advice or guidance, please reach out to me. I will be happy to confidentially discuss your situation.