“Well, either you're closing your eyes to a situation you do not wish to acknowledge, Or you are not aware of the caliber of disaster indicated by the presence of a pool table fraud in your community.” With apologies: Harold Hill – The Music Man YA GOT TROUBLE…

Avenues to Fraud Purchasing Card Fraud Theft of Equipment Travel Reimbursement Fraud Payroll Abuse

Oops…a mistake!? Employee makes a personal purchase on-line. Inadvertently selects the institution’s P-card as the method of payment. Notes the error and indicates in the explanation that it was a mistaken personal purchase and will be reimbursed. Fails to reimburse the institution. “I say, first, medicinal wine from a teaspoon, Then beer from a bottle. An' the next thing ya know, Your son is playin' for money In a pinch-back suit.”

Show me the money!

The plot thickens… Noticing that the approver never questions her P- Card purchases, an employee buys items for personal use. Employee provides fictitious explanation for purchase. If supporting detail is requested, employee “doctors” the invoice to reflect a valid business purpose. Employee sells goods through her internet store which gets great ratings for service and value.

DETAILED VENDOR RECEIPT CLEARLY DEFINED USER NOTES PAYMENTNET LEVEL 3 DETAIL

Reckoning… Lost job at BYU Prosecuted for $53,000 of theft Plead guilty to all charges (felony) Required to pay back the loss

I bought too much… Cardholder purchases computers, toner cartridges, etc. Sells the equipment on e-Bay™ Items sell quickly because of the low price.

Inventory Control

Reckoning… Lost job Prosecuted for $200,000 in theft Plead guilty to multiple felony counts Sentenced to jail Required to make restitution

BYU Examples cont… Manager “can’t be bothered with the mundane activities associated with approval of purchasing card activity,” so delegates it to the cardholder. Over four years, the cardholder purchases over $150,000 in merchandise and sells it via e- Bay™.

Transparency and Accountability

Reckoning… Turned over to police and county prosecutor Charged with multiple felony counts.

BYU Examples cont… Professor buys books, equipment, supplies needed for his class and for “course development.” Items include Nintendo Wii, video games, children’s books, how to books, etc. Items are gift-wrapped and given to professor’s children as Christmas gifts.

Two Sets of Eyes

Purchasing Card… No detailed receipt. Inadequate explanation in “notes” box. Name of book Business purpose Names of personnel being hosted Unusual level of purchasing activity. Purchases noted “personal-to reimburse.” Items appear to lack a good business purpose.

Travel Reimbursements… No travel plans and/or expense reports. Duplicate reimbursement claims. Missing receipts. Personal travel claimed as university business. Upgraded rental vehicles while claiming standard. Lack of detailed explanation of business purpose. Absence of names of persons hosted.

Payroll …. Frequent pattern of edits (corrections for not using time clock) Shifting time between pay period to avoid overtime (create comp. time) Routine or excessive overtime without prior approval. No documentation to support time-card edits. “Pat-my-back” approvers. Pattern of not using time-clock nearest to work station.

Hotline BYU.edu: Hotline rt_custom.asp?clientid= rt_custom.asp?clientid=17652 Ethicspoint.com

YA GOT TROUBLE… Heed the warning before it's too late! Watch for the tell-tale sign of corruption! The moment your son leaves the house, Does he rebuckle his knickerbockers below the knee? Is there a nicotine stain on his index finger? A dime novel hidden in the corn crib? Are certain words creeping into his conversation? Words like 'swell?"