All Others, We Verify

“I scored a goal in that game,” the candidate said.

“That’s strange,” I responded. “That was a 1-0 game, and I don’t remember your name even being on the roster.”

“Yup, that was me. I scored the game-winner,” he replied.

My memory for some things may be challenged, but not when it involves recall of the State Hockey Championship Game during my senior year at Melrose High School. We lost only three games that year, each time to Arlington High, by scores of 4-2, 2-1, and 1-0. The last came in the Eastern Massachusetts Finals, and I was sure that Billy Hogan had scored the goal for Arlington on a feed from Harry Howell.

My conversation with the candidate for the controller’s position with my client company had progressed well. He was a man about my age, with a solid resume. His responses to my interview questions were a little glib, but generally on target. Nevertheless, I had been trying to figure out why, after more than four decades out of high school, his career in finance had not really developed.

Then he dropped the puck. Our casual comparison of growing up in Arlington and Melrose had led to the hockey rivalry, a subject which I covered thoroughly as the Sports Editor of the Melrose Free Press. The names of those Arlington guys – all of them – came flashing back to me, and his was not among them.

We wrapped up the interview and he left, undoubtedly feeling he’d done well. My client was impressed with him, but I told her that it was not to be. What this candidate hadn’t figured on was my filing system. It took some significant digging through the old boxes at home that night, but I found what I was looking for – my story of the game, 44 years earlier. Not only had the candidate not scored, the accompanying program showed that he wasn’t even on the team!

My client and I decided that if we scraped the surface off his resume, we’d find that we were dealing with a con artist, so we terminated his candidacy.

The file boxes of the twenty-first century are computers, and the attic of contemporary history is Google (recently supplemented by FaceBook). But even as inclusive (and intrusive) as the Web may be, it’s tough to connect all of the dots in an employment candidate’s personal history.

For employees in accounting and finance, however, personal fiscal responsibility is the critical element, measured by the absence of things like:

  • Forced account closings
  • Late bill payments
  • Collection accounts
  • Profit and loss write-offs
  • Defaulted loans
  • High credit card debt relative to income
  • Bankruptcy filings
  • Foreclosures
  • Tax liens
  • Civil judgments

The Big Three of Consumer Reporting Agencies (CRAs) are Experian , TransUnion , and Equifax , and each of them compiles this type of information, accessible (for a fee) to banks, brokerages, retailers, insurers, credit card companies – any user which has a permissible purpose under the Fair Credit Reporting Act (FCRA) to obtain a consumer report. Listed among these is “employment purposes,” including hiring and promotion decisions, where the consumer has given written permission. However, no person or entity may obtain a consumer report from a CRA unless the person has certified to the CRA the permissible purpose(s) for which the report is being obtained and certifies that the report will not be used for any other purpose.

Combined with the FCRA requirement that users must notify consumers (including employees) when they take “adverse actions” such as denying employment or promotion on the basis of such reports, this can be a major hassle. In such cases, users must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the consumer.

No wonder, thought I, that none of my small company clients has pursued employment screening. It’s just too bureaucratic and time-consuming.

Then I visited a few days ago with Stephanie Yang, Vice President of Credit Bureau Associates – Northeast, Inc. (CBAN) in North Andover, MA. She confirmed my concerns, saying that in the 15 years that she’s been in the business, it has become ever more highly regulated, to the best interests of both the consumer and the corporation. At the same time, the amount of data being maintained is voluminous, just 20 years after at least some of it was still being maintained on hand-written cards in file tubs.

As an agent of the Big Three, CBAN is allowed to accept corporate clients only after they have been vetted through an approval process which includes a set-up fee and an on-site visit. However, once that process, which usually takes a week, is complete, pre-employment credit screening – usually at much less than the cost of a Monster board posting – can be handled routinely using permission formats provided by the agency. Most often, reporting occurs within minutes.

There’s a ton of misrepresentation and outright fraud in the employment world. Very few employers avoid the effects for very long. But there is also a ton of information available to provide a negative indication. With a modest investment of time and money – especially relative to the cost of a dishonest employee in a fiduciary role – managers have little excuse for skipping the integrity check.

After all, the reminder is right there, on every piece of U.S. paper currency. For these purposes, read it as: “In God [Only] We Trust.”

Alligator Bites

“The prosecution said Brenda Felder used the funds of Broward County’s labor agency as her ‘own personal ATM.’ Her own lawyer contended that she stole from the people of Broward County. The judge agreed… [and] the former labor agency clerk was sentenced to 10 years in prison and ordered to pay back the more than $2.4 million she stole from Broward Workforce One.

“Sometimes working alone in the office at night, Felder wrote checks to herself each month that often totaled around the equivalent of her annual salary or $31,725. In all, she made out at least 119 such checks and covered up the theft by coding the checks as going to a different vendor in the agency’s computer system. The theft was eventually discovered by a bank teller at Felder’s own bank [who] became suspicious of the large deposits flowing into Felder’s account.

“Felder has previous convictions for grand theft when she worked at a bank and later at an insurance company. She lied on her Workforce One job application when she first applied in 1994. The agency wasn’t doing background checks at the time. When it later instituted such a policy, it didn’t check existing workers, so Felder’s criminal background went unnoticed.

“A state inspector general’s report on the theft found numerous breakdowns in Workforce One’s financial control system, including not looking at actual checks when reconciling bank statements. The agency also never kept track of the two keys needed to operate the check-signing machine. The signed, finished checks that Felder printed never had to be approved by anyone else…. Felder hid her actions so that none of Workforce One’s monitors, reviewers or auditors could find the theft.”

The Miami Herald, August 23, 2007

Draining the Swamp

Percentage of 36,122 high school students surveyed in 2006 who…

  • Admitted stealing from a store within the past year – 28% ( 32% males, 23% females)
  • Stole something from a parent or other relative – 23%
  • Lied to a parent about something significant – 81%
  • Lied to save money – 39% ( 47% males, 31% females)
  • Cheated on a test during the past year – 60% ( 35% did so two or more times)
  • Used the Internet to plagiarize an assignment – 33%

Despite these high levels of dishonesty, these same kids have a high self-image of their ethics. Percentage who said that…

  • They were satisfied with their personal ethics and character – 92%
  • “When it comes to doing what is right, I am better than most people I know” – 74%

– from the bi-annual survey of the Josephson Institute of Ethics