So what is Teaming and Lading?

Teaming and lading is a term normally used for “borrowing” from cash to repay by cheque at a later date.

When a business received incomes receipts, it can come from both cash and cheques and if the internal check is lacking then the fraud perpetuator can divert the cash cheque for his/her personal use.

One good example of this teaming and lading fraud is the Devon and Exeter Spastics Society’s case.

In this case, the following were highlighted:

• There is an misappropriation of funds amounting to £178,000;
• The fraud perpetuator is a long serving member of staff;
• The funds had been deposited in an unauthorised bank account operated by the former employee over a period in excess of thirteen years without the knowledge of the trustees;
• The former employee had secretly operated a system known as ‘teaming and lading’ by depositing company’s funds into the fraudulent bank account;
• The stolen funds were shown as debtors in the Charity’s Accounts which were reconciled before the end of the financial year to prevent detection;
• The Charity was able to show it had clear financial controls in place consistent with the Commission’s guidance;
• The Charity has implemented further controlling and preventative measures by photocopying all cheques and the countersigning by the Chief Executive Officer of all banking payments.

So how do we prevent Teaming and Lading fraud:

To prevent teaming and lading, the following internal controls/checks should be instituted:

To prevent teaming and lading, the following internal controls/checks should be instituted:

• The cash and cheque received should be split into two different type re: cash and cheque banking in slip. The cash/cheque split on paying in slips will allow the school to ensure that staff have not been encashing personal cheques against income collected;
• There should be reconciliation which should involve the  matching of the income receipts/other documentation to accounting records on the one hand and bank statements and paying-in slips on the other;
• If any income is unaccounted for, the separate listing of all individual cheques on the paying-in slip allows the identification of the missing income element;
• There should be proper segregation of duties. The person carrying out this reconciliation should not be the person who banked the income;
• These reconciliations should be reviewed by someone independent of income processing.