COZENING COUNCILMAN GETS HIS DAY IN COURT

A former Northumberland Borough, Pa. council president is facing felony-theft charges involving US $18,722 allegedly stolen from the borough over a 10-year period, according to The Daily Item. The charges relate to alleged misuse of the borough’s credit card and fraudulent acceptance of reimbursement checks all involving nonexistent computer software. A part-time borough clerk discovered numerous credit card purchases for software that could not be found on any of the borough’s computers or on its property. According to the borough’s secretary and treasurer, the former council president also periodically directed her to issue reimbursement checks for software purchases to him, which they both signed. The president is one of four borough officials authorized to sign checks.

The former council president also faces charges in alleged software thefts in excess of US $100,000 from his former employer, a privately owned manufacturing company, where he was a computer and Web developer until he was fired in September 2007.

Lessons Learned

Good preventative and detective controls can act as a deterrent by reducing the likelihood of fraud as well as helping internal auditors quickly discover any fraudulent acts. In this case, controls should have been in place to prevent:

  • Persons ordering the goods from certifying the receipt of those goods.
  • Issuing payments without adequate documentation to support receipt of goods.
  • Persons from authorizing payment (e.g., signing the check) for which they are the payee.
  • Hiring persons without performing a reference and background check.
  • The absence of an independent audit. (The former council president’s deception lasted 10 years!

Share This Article:    


COMMENT ON THIS ARTICLE

Internal Auditor is pleased to provide you an opportunity to share your thoughts about the articles posted on this site. Some comments may be reprinted elsewhere, online, or offline. We encourage lively, open discussion and only ask that you refrain from personal comments and remarks that are off topic. Internal Auditor reserves the right to edit/remove comments.

Name:

Email:

Subject:

Comment:


To make something bold:
<strong>Text to bold</strong>

To make something italic:
<em>Text to italicize</em>

To make a hyperlink:
<a href="URL">Text to link</a>

 

April 2014IaCover 

  IPPF_Ap42014 

IIA SmartBrief

Bookstore Digital

 IIA Academic_Nov 2013

 

 

 Twitter

 facebook IAO 

IA APP