Misappropriate use of company funds - money is used for his boarding house rent

An employee was assigned to purchase a decoration for the showroom since it's the birthday of Mama Mary. The employee asked for a cash advance, which was then transferred to his account. However, the money was suddenly used for his boarding house rent instead of the showroom decoration.

Dear member,

If the employee has taken a cash advance to purchase materials for the company event, then it is incumbent on him to provide details of the expenses along with valid cash receipts for the materials purchased. If he has not done so, tell him verbally to do it immediately. If the employee fails to comply with verbal instructions, issue a warning letter for not submitting the expense details. Clearly state that he must submit the details within two working days. If the employee still fails to comply, issue a show-cause notice as to why disciplinary action should not be initiated against him.

If the employee's response is unsatisfactory or if the employee fails to reply to the show-cause notice, then the company's administration is free to impose a suitable punishment.

Thanks,

Dinesh Divekar

Mr. Movera was assigned to purchase a decoration for the showroom on September 8. He then asked for a cash advance that day, which was transferred directly to his account. The cash advance is now in his account, and he immediately went out to purchase the decoration. However, he did not return to the office for several days. It was discovered that the money he requested from the company was used to pay for his boarding house rent, resulting in the misuse of company funds.

The situation you have explained is definitely misconduct and misappropriation of money. It is generally grounds for dismissal from service, and depending on the amount involved, you may consider seeking the help of the police to recover the money (I am assuming he has not come back to work).

I am not aware of labor law processes in your country, but if you have a process like issuing a showcase, then conducting an independent inquiry before issuing the dismissal order, you should follow the process to the letter and spirit.

Even if you do not dismiss him, you should definitely ensure he is never allowed to handle the company's money or assets outside of the office premises.

Yes, his superior already asked him where the money is, and he answered that he used the money for his boarding house rent, which is misappropriation of company funds. Please assist me in drafting a warning letter to the employee. Thank you.

Help me with this warning letter regarding the misappropriation of company funds.

You should write a letter or a memo in the normal manner, just stating the facts and pointing out that it is misconduct under your company regulations (I am not aware if you have anything similar to standing orders in India), preferably giving the rule number and quoting it.

The letter should then state that he has to immediately return the money and that if he does anything like that again, he will be terminated from his job without notice and may face a criminal complaint with the police.

I suggest you take the approval of your HR Head or CEO before you actually issue the letter as they may have a different take on the matter. Also, you need to decide if the warning will be kept secret or if you want to let everyone know as a warning to others. Again, the decision needs to be taken carefully as both options have their own problems and benefits.

Help me to provide a letter warning of misappropriation in using company funds. See below the whole incident.

An incident concerning the unliquidated cash advance involves an employee who was tasked with purchasing showroom decorations and requested a cash advance worth $1000. When the supervisor learned that the employee would be out, the supervisor also requested a cash advance of $2300 for printing checklists as required by FGE, under his name and that of his supervisor. The employee requested the cash advance for the decoration on September 8 and the cash advance for the FGE requirement on September 9. On Saturday, he was absent without authorization and also on Monday, then returned to work on Tuesday, September 10. The supervisor attempted to contact the employee via phone call and text on the previous Saturday to follow up on the FGE requirement, but his number was unreachable. Later that day, Miss Charmaine also tried to contact him. Fortunately, he answered the call and informed Miss Charmaine that he couldn't purchase the decoration yet because he used the money to pay for his boarding house rent and promised to repay on payday. He was able to present the FGE requirement but is still waiting for the receipt.