Sad example of the need for disbursements controls

(previously posted at my other blog, Nonprofit Update)

 See this article for a sad illustration of disbursement fraud.  The specific technique was opening credit card accounts in the name of the company and then using the account for personal expenses. 

As the author points out, a review of the credit card statements would be useless because their existence was hidden.  However, a careful review of bank statement may have identified this fraud earlier, perhaps several hundred thousand dollars earlier.  It is very possible that an independent review of the bank statements could have detected this fraud very early on.  This is one illustration of the reason I recommend to my clients that they have someone other than the bookkeeper review the bank reconciliations.  See my post here.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: