A Guide to Internal Loss Prevention

A Guide to Internal Loss Prevention provides an analysis of loss prevention factors from the inside looking out, rather than the outside looking in, bringing to management's attention specific organizational areas that may be contributing to internal loss. It is the authors' intent to demonstrate that management personnel often do not pay attention to essential details, and that this laxity, carelessness, or deliberate negligence is costing both industry and the consuming public billions of dollars annually in needless added costs. This book is organized by recognizable business functions rather than by type of organization. Key topics discussed include the administrative, financial, management, production area, personnel, and safety considerations of loss prevention. White collar crime, computer security, and information security are also covered. Where possible, case studies are supplied to clearly depict an actual loss situation, so that management sees how it can happen. An attempt is made to identify loss-producing situations, their possible causes, their effects, and finally, recommendations for remedies that may enable management to prevent recurrences, thereby saving money and ultimately profits.

Preface

1 White Collar Crime

Reporting Crime Cost

Charting Crime Cost

Factors in crime cost

Introduction to White Collar Crime

What is white collar crime

Who commits white collar crimes?

Collusion

2 Administration Considerations

Cause, Effect, Remedy

Duplication of Effort

Reproduction Department

Mail Room Activities

Stationery and Supplies

Printing

Association Memberships

Subscriptions

Travel

Entertainment

Expense Accounts

Alcohol and Drug Problems

Telephone Abuses

3 Computer Security

Physical Security

Fire prevention

Access control safeguards

Usage safeguards

Software Security

Case Studies

Case one

Case two

Some Additional Points to Consider

4 Financial Considerations

Accounting Department

Accounts payable

Short shipments and incorrect parts

Damaged goods

Price changes and shipping charges

Late deliveries

Auditing section

Cost accounting

Asset Accountability

Some costly losses

Cash Handling

Recommended safeguards

Petty Cash

Fidelity Bonding

Expense Account Auditing

Check-Signing Devices

Insurance

Aspects of Coverage

Insurance Claims and Fraud

Timekeeping and Payroll Manipulation

5 Information Security

Present-Day Problems

Notable Spy Cases

Cookie caper

Hughes Aircraft radar and weapons system compromise

Hitachi, Mitsubishi, and IBM

Counterfeit Goods

Government Policy

Classified Information

Nonclassified Information Relating to Classified Contracts

International Traffic in Arms Regulations

Technical Data Subject to Export Control

Technical data export

Computer Trespass

Some Solutions

Computer security

Protection of proprietary information

6 Management Considerations

Recognizing Management Attitudes

IRS — Individual Responsibility for Security

Awareness of Security

Work Simplification

Standardized vs. customized

Loyalty

Management by Exception

Reports

Spoilage, waste, scrap

Informants vs. Concerned Employees

One Company's Solutions to Business Crime

Theory vs. reality

Willingness to fight crime

Lost Time

Theft of Service

Investigations

Investigative Operations Audit

Law Enforcement Liaison

Disaster Preparedness Planning

Executive Protection

Personal protection for the executive

7 Facilities Security and Operations

Design for Security

Facility Site Audit

Performing the audit

Lock and Key Control

Maintenance Department

Janitorial Services

Over the Fence

Rubbish Removal

Construction Site Security

Temporary fencing

Temporary lighting

Roving patrols

Heavy equipment safeguards

Sabotage

8 Production Area Considerations

Inventory Control — Shrinkage

Pilferage

Materials Handling

Measures for materials protection

Purchasing Department

Raw Materials Inventory

Receiving Department

Damaged goods

Distribution

Delivery Services

After-hours deliveries

Salvage, Scrap, Surplus

Errors and Omissions

9 Personnel Considerations

Hiring Policies

Fingerprinting

Photographing

Personnel Policies

Labor Turnover

Vacations

Disciplinary Action

Search Policy

Gambling

Employment Agreements

Conflict of interest agreements

Patent disclosure statements

Nondisclosure of proprietary information statement

Suggestion Systems

Absenteeism

Exit/Termination Interviews

10 Safety Considerations

What Causes Accidents?

Unsafe Practices

Unsafe Conditions

Zero Accidents

Safety inspection

Accident Investigation

Accident investigation: questions to ask

Index