Background checks: worries about personnel integrity are creating a few worries of their own

CFO: Magazine for Senior Financial Executives,  August, 2005  by Kris Frieswick

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"None of the guys who are on trial right now would have been flagged by a background cheek,' says Deming. "Some companies want exhaustive behavioral tests of their CFOs and senior executives, but you still wouldn't have found a thing."

RELATED ARTICLE: Some tips for correct checks.

* Make background checks job relevant. Don't reach too far for a job-relevancy connection if none exists--it could be grounds for a failed candidate's lawsuit.

* Data in background reports may be inaccurate. Make it company policy to discuss anomalies with the candidate.

* Work with your HR department to understand the federal and state rules governing background checks and job applications. They vary widely, and state rules usually supersede federal.

* Except for certain jobs, it is discriminatory to create a blanket hiring policy excluding felons from consideration. Exclusion based on a felony must meet a job-relevancy test to meet Equal Employment Opportunity Commission guidelines.

* Most fraud is committed by first-time offenders, making background checks of limited value in fraud prevention. According to a survey by the Association of Certified Fraud Examiners, the most effective way to catch fraud is via an anonymous reporting mechanism (such as a tip hotline), followed by internal audits.

* New FTC rules mandate the destruction of credit data obtained from consumer credit reports after its "business purpose" has been achieved. This includes credit information obtained during background checks. The FTC's Website (www.ftc.gov) offers more specifics on the Fair and Accurate Credit Transactions Act. * K.F.

KRIS FRIESWICK (KRISFRIESWICK@CFO .COM) IS A SENIOR WRITER AT CFO.

WHAT GETS CHECKED
Background investigation of potential
employees, 2003 vs. 1996 (in %).

                         2003    1996

      Reference check     80      92
             Criminal
     background check     80      51
        Previous work
              history     79      84
    Education records
(degree verification)     55      51
        Motor-vehicle
               record     44      40
         Credit check     35      19
   Military discharge
          information     21      16

Note: Table made from bar graph.

Source: SHR[M.sup.R] Workplace Violence Survey.

COPYRIGHT 2005 CFO Publishing Corp.
COPYRIGHT 2005 Gale Group