Missing documentation led to fraud investigation

The Finance Manager at a children’s nursery has been jailed for more than two years following an investigation into the nursery’s accounts.

Kerry McGavigan had worked for the Enchanted Wood Nursery in Essex for 12 years, but her financial wrongdoing only came to light after a colleague reviewed the accounts and suspected that some documents were missing, prompting an investigation by Essex Police.

McGavigan was dismissed in September 2023 and arrested in July 2024 after the investigation revealed the scale of the fraud, which involved raising fake invoices for work that was either never carried out or completed at a fraction of the billed cost. All funds from these fraudulent invoices were paid into her personal accounts, and she also spent approximately £20,000 on personal expenses using the company credit card.

The evidence included an invoice for £20,000 being paid to a non-existent electrical firm, despite the nursery’s lighting system never being changed. There was also a payment of £8,000 for a security system which cost between £2,000 and £2,500.

Investigators also discovered that, excluding her salary, £152,477.35 had been transferred to McGavigan’s current account. An additional £25,173.65 was paid into a second bank account, which had only ever received funds from the nursery’s account. Despite this, McGavigan had no assets and had consistently remained in her overdraft for a two-year period.

In total, Essex Police were able to show that McGavigan had benefitted from £207,000 in fraudulent payments. She was subsequently charged with three counts of fraud by false representation, to which she pleaded guilty, and was sentenced to a total of two-and-a-half years in prison.

Commenting on the case, Roger Isaacs, National Technical Director of NIFA said “Employee theft can be incredibly damaging, and not just from a financial perspective.

“As one of the investigators said after the sentencing, McGavigan’s actions also came ‘at great cost’, mentally to her colleagues and the parents at the nursery.

“Fraud committed by employees can also damage the reputation of a business and cast doubt on the efficiency of the business owners.

“Cases like this highlight how important it is for businesses, no matter their size, to implement robust financial controls and oversight. Even in small organisations, a lack of segregation of duties, routine audits, or independent financial reviews can leave the door open to abuse.”

Sources: BBC News