Dr and Dr Simons were a young couple with two children. They had met in med school and were happy to have been able to purchase a small practice together. They looked far and wide to find the perfect office manager. They tried advertising in the newspapers, talking the agencies, and word of mouth. Then Barbara answered their call. She was a perfect fit. She had worked in a doctor’s office before, could handle the software, and knew about scheduling and managing an office. She was personable, capable, and they were delighted.
They became fast friends. When the Simons’ took vacations, they left their home and children in Barbara’s care. She ran errands for them off the clock. She picked up the children at daycare if the doctors ran over. She even took their laundry to the cleaners for them.
Barbara took the money (cash, check or charge) when people paid and entered it into the computer. She made the deposits slips and frequently ran the money to the bank. Often, she didn’t. One of the doctors would. She had access to their credit cards, but the doctors paid the bills.
After five years, there was a problem. The computer crashed. There was a backup, but it was damaged. Barbara spent many hours trying to piece together the lost data from the paperwork she had kept. She racked up a lot of overtime, but that is part of the cost of doing business. The doctors understood and offered to help all they could.
The doctors asked Barbara for some reports on how well they were doing, what receipts were, comparisons to previous years, and other statistics they had gotten before the crash. They asked again, and again, and again. Finally, after a year, they asked a computer expert friend of theirs, Jessica, to check out the computer after hours and see if she could get any reports.
It didn’t take Jessica long to run some reports and find the problem. The data had NOT been re-entered as Barbara had promised. The doctors thought perhaps Barbara didn’t know how to enter data after the fact. Also, they wanted to be back on track financially as quickly as possible. They asked Jessica if she could come in the next morning. They would teach Barbara what she needed to do to get the computer correct again. Jessica agreed.
The next morning, Barbara called in sick. She asked what the doctors had been doing there after hours the night before in her office. Apparently, she had driven by and seen the lights on. The doctors explained their plan. Jessica worked on the computer as well as doing Barbara’s normal duties that day. And the next. And the next. Barbara never returned.
Fortunately, each time a patient had come in, a piece of paper had been generated showing the procedures and charges. Jessica diligently put all the old procedures and charges into the computer. Then she had to check all the credit card statements and deposit statements. Fortunately, the day sheets showed each person that paid and how much and whether it was check, charge or cash. All of the deposit statements matched up with the day sheets.
It took two months, in doing this along with other office manager duties, but finally, the day came she could take a look at the financial health of the practice. Of course, the previous two months were easy to have reports for. The preceding year shouldn’t have been a problem either. Apparently, bills hadn’t gone out in at least three years. So Jessica booted up the computer, starting with just the “A’s”. In each bill, she put a brightly colored slip of paper with a note saying that there had been a computer crash and perhaps not all of the deposits were caught. If there was a problem, please consult the office. Jessica and the doctors agreed to believe anyone who said they had paid and write off the charges.
A week later, some checks came in. One senior said she thought she had paid in cash but couldn’t find a receipt. Jessica felt bad cashing the check that was sent in. It was over two years! Some ignored them. Jessica made some phone calls. Soon the A’s were okay.
So next were the “B’s” and “C’s”. This would take some time, but Jessica had taken a leave of absence from her computer job and was enjoying the change in atmosphere.
A few days after the second set of bills went out, Jessica received a phone call from a social worker. Her client, who spoke no English, claimed that he had paid the bill in cash the previous March. He had his receipt. Jessica asked that it be faxed over. Within a few minutes, it came through.
Jessica brought the receipt to the doctors, tears in her eyes. All of a sudden, a lot of things fit into place. Why did Barbara quit out of the blue? Why were deposits so much more now than they had been just before Barbara quit? Why didn’t she send out bills even before the crash? Why was no cash every listed on the deposit slips? Why was the transaction backup purposely deleted just a week before Jessica came? Why was Barbara unable to restore the computer and get reports?
As time went on, more and more cash deposits were found to have been taken. It got so that before she sent out bills, Jessica looked for a history of cash payments and just assumed the bill had been paid in cash. An analysis of the deposits showed that on the days that Barbara had been gone on vacation or sick, the cash deposits were an average of five hundred dollars. When she was there, they were usually less than twenty.
The doctors realized that they had forgotten to pick up their laundry. When they went, Barbara’s clothes were mixed in with it. They looked over old credit card statements and found charges Barbara had made. They had loaned their car to Barbara and money had disappeared from it as well.
The Simons took the case to a Grand Jury and it was an easy indictment. They had $50,000 in documented losses. However, Barbara had an ace up her sleeve. She had dirt on one of the doctors. Normally , it would not have been serious. But had it hit the front page of the paper, the Simons could lose their patients. The doctors decided to drop the charges and move forward.
They gave Jessica more responsibilities. She soon was in charge of receiving payments, and making deposits, as well as keeping all financial records, paying their personal credit cards, and doing all of the accounting. Jessica warned them that they were asking for more embezzlement, but they insisted they trusted her. Although Jessica didn’t take advantage of the situation, she didn’t stay at the job long either. After two years, she went back to the computer industry. The Simons hired a new office manager. And gave her the same duties. Some people never learn.
the Simons’ Mistakes
Dr and Dr Simons should have had numbered multi-copy papers for each patient who came in to the office. As procedures were done and charged, they should have been marked. The patient should have had a copy, one for the front desk, and one on the doctors spindle. The doctors should have added up the charges at the end of the day and make sure that they matched what went into the computer. They should have taken advantage of the software feature that gave them a password for deleting transactions that an office manager didn’t have. And they should have trusted less and verified more!