Separation of duties - Part 2
In the business world protecting your assets is a critical strategy. Without it you are open to “things” happening that can cost you a fortune. I was trained with the concept of the separation of duties as a foundation so in some respects I take it that everyone else has the same perspective. Recently I worked with a client that showed me just how far things can go awry when you put your trust in someone and you fail to have the proper separation and oversight.
Now I know you’re thinking two or three things right now. David is very distrusting, and he has no idea who I have looking after my affairs and besides that we’re so small that I have no choice and I don’t know what to do. I must trust my manager.
Nothing could be further from reality. In this piece I am going to highlight a couple of the critical items that require a separation and how to create that even in the smallest operation.
“Who guards the guards?” – Plato
With a system comes the ability to control, with controls we can monitor the results. When there are no controls that mean there is no system. When there is no system anything can happen.
In the hotel business we have a great system to follow. That system has natural control points. That’s where we need to create the separation so we can monitor the results. The only exception to this is if you do all of these tasks yourself.
Rooms for Verification: The daily verification of occupied rooms compared to paid rooms is as old as the hills but still to this day it is one of the easiest controls to manipulate. The separation you need is someone in housekeeping checking the occupied and rooms that require cleaning (rooms that are found to be occupied and need cleaning) to the rooms that are checked-in and paid for. If you don’t do this and have it separated, as the desk clerk I can easily take cash for a room and simply not check it into the system.
Buffet Covers: The buffet operation in your hotel is a prime area for manipulation. You must have someone at the door counting and recording covers by section and you must compare this count to the point-of-sale system reports at the end of each meal period. If you don’t then you are wide open to get abused.
This is a simple scam and very common. The waiters serve many tables and the commonality is the cover counts. A deuce, a four-top, etc. All morning, lunch, dinner and brunch settings are the same and what they can do is re-use the customer invoices when customers pay by cash. In this scenario I’m the waiter and you are dining with your spouse. You enjoy the buffet and don’t order any additional items. Bingo for me as I now have a clean deuce check. I can re-use this over and over again and as long as the next or another deuce paying cash comes along, I can re-use that customer invoice and pocket the cash.
Back in the day working the F&B operation in a swanky summer resort we would be visited from time to time by the spotters. They would swoop in, and every time they caught waiters/waitresses doing exactly this. Separation and tracking are vital to protect your assets.
More to come on the separation of duties in future posts. In the meantime, if you want help with your internal controls have a good look around or give me a call.
David Lund – The Hotel financial Coach
Contact David at (415) 696-9593
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