Do some librarians steal? While most don’t, some do. Today we see that some guardians of knowledge take that which belongs to the general public.
I remember my childhood librarian, Ms. Adams. She was a lady of rectitude, dignity, and uprightness. Never one to harm or take from her patrons—or the library. Theft by her? Unthinkable. The memory of her colors, in a positive way, my view these public servants. But not every librarian is Ms. Adams.
Recently I spoke to about 50 librarians about fraud prevention and was shocked by their stories of thefts from libraries. It appears library fraud is alive and well in the United States. No place is immune. The following is a story of one such librarian, Bob Rice Jr.
Bob Rice Jr. served as the director of the Revere Public Library for twenty-seven years before he pled guilty to twenty counts of fraud and embezzlement. So, how did he steal?
Mr. Rice apparently could approve purchases by issuing requisitions and purchase orders. The library paperwork would reflect the acquisition of dictionaries, for example, but the real purchase might be a Rolex watch.
Rice also purchased items that appeared to be for the library such as computer software, but he would–after receiving the goods–sell them on eBay. Then, with the cash, he would purchase items for personal use.
Lastly, in some instances, he requested reimbursements for items he never received. Those reimbursement checks were cashed and placed in his bank account.
How Rice Used the Funds
And how was the money used?
Mr. Rice purchased personal items including:
- A model of the Star Trek’s Starship Enterprise
- A replica Tommy Sub-machine gun
- A vacuum
- A Leica camera
- Star Wars collectibles
- Rolex watch
- An ice cream making machine
- An elephant tusk sculpture
His total theft was estimated at $236,000.
And what internal control weakness allowed the theft? No one was comparing the purchase orders with the payments made or to cleared checks. (This same weakness allowed a $16 million theft from a bakery.) It also appears that Mr. Rice could issue purchase orders and sign checks.
The person authorizing payment (e.g., issuing purchase orders) should not also make the payment. Supporting documentation (e.g., purchase requisition, purchase order, bids) should be provided to a second person for review. Thereafter, the reviewer can issue the check or authorize payment.
Check signers should not issue purchase orders. For instance, board members might sign the checks, while operating personnel request the purchase.
When possible, have a central receiving department. Goods received should be recorded upon receipt by a person that did not issue the purchase order. Why? Segregation of duties. One person authorizes the purchase and another receives the physical goods. Such a procedure makes it more difficult for someone to buy products and then sell them on websites such as eBay.
Finally, require appropriate documentation (e.g., invoice) for all reimbursements. A second person should approve these payments. The person buying the goods should not also approve the reimbursement payment.
What Happened to Mr. Rice?
Though he initially denied the charges against him, Mr. Rice pled guilty to 20 counts of fraud and embezzlement. He did provide $230,000 in restitution, which led to a reduction in his sentence. He received six months in jail.
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