By Charles Tan
Sales & Catering Department
This department represents the initial revenue touchpoint for events, banquets, and conferences. High transaction values and extensive negotiations create multiple exposure points for fraudulent activities.
- Deposit Manipulation
Common Schemes:
- Accepting cash or transfers to personal accounts while issuing counterfeit or handwritten receipts
- Receiving deposits without immediate system entry, temporarily misappropriating funds
- Reducing deposit amounts in the system and pocketing the difference
Prevention Measures:
- Mandate all payments transfer exclusively to hotel bank accounts—no personal cash or checks
- Utilize pre-numbered, sequential receipt systems with full traceability
- Designate cashier or accounting departments as sole receipt issuers, never sales staff
- Conduct daily deposit reconciliation against actual bank transactions
- Overbilling & Headcount Fraud
Common Schemes:
- Inflating actual participant numbers beyond reality
- Adding food and beverage items never ordered
- Charging for additional services never agreed upon
Prevention Measures:
- Require Banquet department verification of actual attendance using electronic counters or clickers
- Utilize client-signed Banquet Event Orders (BEO) co-signed by department heads
- Limit invoice issuance to cashier or accounting personnel, referencing BEO only
- Conduct post-event client interviews for feedback and service verification
- Mark-up & Commission Fraud
Common Schemes:
- Inflating room rates or per-person charges above actual prices, splitting the difference with clients or pocketing it
- Receiving under-the-table commissions from external vendors (bands, organizers, florists) without hotel disclosure
- Recommending vendors offering personal kickbacks despite inferior quality or pricing
Prevention Measures:
- Establish clear Standard Rate Cards requiring executive approval
- Implement authority levels for special discounts based on contract value
- Prohibit employees from accepting gifts or benefits from suppliers exceeding specified limits
- Maintain a Preferred Vendor List vetted by cross-departmental teams
- Bid Rigging
Common Schemes:
- Leaking competitor pricing or client budget ceilings to favored suppliers in advance
- Soliciting quotes from shell companies (dummy firms) to make the preferred supplier appear most competitive
Prevention Measures:
- Employ sealed bid or e-bidding systems ensuring transparency
- Designate senior executives to open bids with committee oversight
- Randomly verify the legitimacy and existence of bidding companies
- Rotate personnel responsible for comparative quotation processes
