I had carefully lined up a part-time resource to cover me. I had applied all of the right technology. I had a monitoring system in place. The corals were starting to grow, algae was under control, and everything looked happy.

But, when I returned from my brief trip, my tank was destroyed, with 90% of my corals  either dead or dying. The  fish were sick and hanging out on the bottom of the tank.

What went wrong? I thought that I had taken all of the necessary precautions: I invested in the right equipment, performed a thorough cleaning before I left, tested the water parameters and had an associate stop by daily to monitor the tank. I was confident everything was going to be ok.

But I hadn’t thought about a temperature spike. I had arranged for someone stop by and monitor the tank, so it wasn’t on my list of possibilities. The problem developed because there was a significant heat spike and my associate wasn’t doing what I thought. I had made an assumption that certain procedures would be followed and that my associate understood the implications of temperature changes. I hadn’t defined my procedures or properly trained my assistant.

When I got back from my trip and walked into the house, I was struck by the high temperature. I knew immediately it couldn’t be a good sign. I took one look at the tank and saw that everything was dead. The house temperature was 96 degrees and the tank was at 94 degrees -  the maximum temperature for corals is 82 degrees.

This got me thinking. If one problem could lead to so much havoc in a relatively simple project, what would it take to cause the same kind of damage to a business?  Most businesses are much more complex than the controlled environment of a fish tank. It takes a lot of people working together to keep a business operating efficiently, but if one person strays from their job, would similar damage occur?

In business, one way to reduce the possibility of disaster is have strong controls in place. But, just having good controls isn’t enough -  they need to be reviewed. I thought I had good controls in place. What I didn’t do was examine if they were working. Controls need to be reviewed periodically to ensure that they are being followed, that they are operating correctly, and that they are accomplishing their objective.

Now is the perfect time to take another look at your controls. Companies need to drill down all the way to the person(s) performing each step. You need to find out exactly what each person is doing on a daily basis- not what you think they are doing.

Your year end review could accomplish two objectives:

1. Insure  there isn’t going to be a break down in the company operations.
2. Identify opportunities for enhanced operational efficiency.

After all, you don’t want anything fishy going on in your business.

Company officials spotted the wine (which hadn’t yet been released to the public) being sold online and were able to bring the embezzlers to justice.

Without knowing the complete details of how this employee committed this crime, I recommend that you take the following steps to reduce the likelihood of a similar loss in your winery:

1.       The individuals who verify shipments or receipts of inventory should not be able to make inventory adjustments in your accounting system.

2.       Lost shipments should be verified with the carrier of record, who would be liable for damages.

3.       Returns should be pre-authorized by a regional sales rep or someone other than the distribution center employee.

In most cases, proper segregation of duties can reduce the chances that any single employee can perpetrate a fraud like this. Basically, every company should take steps to assure that no single individual has control over all phases of a transaction.