FRAUD DETECTION, INVESTIGATION AND PREVENTION ...

All issued checks should be non-negotiable to protect the issuer andrecipient. Forbid the signing of blank checks. No responsible employee maysign checks without the corresponding supporting documentation. Reconciliation for all the bank accounts needs to be performed atleast on a monthly basis. This will minimize any fraud that may beperpetrated by any individual. The cheques issued by the SACCO need to be accompanied byrespective Cheque Payment Vouchers which should clearly stipulatethe reason behind such payment. The cheque books should be kept in a secure and protected place.Before the issue of check books to the accounts staff, all chequeleaves need to be counted, confirmed and acknowledged by signing. All counterfoils must be documented as a true copy of the originalcheque and all void cheques must be crossed and must also berecorded in the system as void.LOANSLoans represent the highest percentage of a SACCO’s assets. They are alsoprone to risks including fraud. SACCOs loans needs to be monitored notonly to make sure that they perform but also to ensure that no fraud isperpetrated using loans.Among other checks; The SACCO needs to clearly define in the loan or credit policy onthe procedure for issuing out loans. A credit scoring mechanism needs to be performed to ensure nomember who does not qualify for a loan gets one.