The Haight Ashbury Free Clinic: Internal Control Case Study

agree to published reports, what happened at Height suburb isolated Clinic Is typical of the types of occupyee fraud that happens daylight In and day out at many organizations. It was nothing overly in advance(p) and demonstrated how Insiders who know the peculiarities of differing requirements use their acquaintance for their own enrichment. A motive gibe of the clan took advantage his knowledge that requires nonprofits receiving federal official official grants to return any unspent notes. This bullion Is supposed to go directly to a federal office.However at the open clinic, political science claim the SCOFF created an account statement at a Sacramento bank under(a) a name salary to the federal office. For over both years he had clan workers return these checks. Which he deposited into this account that he actually owned. He allegedly set up several accounts with name calling similar to legitimate venders. The SCOFF had payments intend for these legitimate venders be sent to his button up corporations and later cashed the same checks. These schemes began in June 2001 and went on for over two years.After the irregularities were unveil and investigated, the SCOFF was fired ND the topic was turned over to prosecutors, who miraculously prosecuted and got a conviction. We say miraculously because white-collar iniquity is rarely prosecuted. Even more frightful is the fact that he was convicted. He was sentenced on April 30, 2008 to serve four years in prison, make restitution and pay hold taxes and fines. Returning checks to anyone besides the intended payee is a break in best-practice procedures. What happened here demonstrates all the way why returning checks to anyone but the payee is much(prenominal) a bad practice.Clearly the process for conniption up new endorsed was lax at the clinic. Possible Solutions 1 . ingestion allow for segregation of duties including rule vendor excite responsibilities. 2. Limit access to the master ven dor file and require dual approvals out front a new vendor is added to the master vendor file. 3. Do some separate of verification of new vendors, checking offer and hollo numbers to ensure you are not dealing with a phony vendor. blend W-as from every new vendor forward making the first payment. Run W-as against the IRS TIN (Taxpayer Identification Number) Matching Program to begin with making the first payment.Check to e If counterpart vendors suck up the same TIN. Conclusion age very few organizations will employ all the practices described above, the more a corporation Incorporates Into their policy and procedures, the more backbreaking It Is for a fraudster (either an employee, former employee or mortal else) to steal from the company. The Height suburban area Free Clinic Internal Control Case claim By Saying-Chou Saying Chou concord to published reports, what happened at Height Suburb Free Clinic is typical of the types of employee fraud that happens day in and day out at many organizations.It was nothing overly forward-looking and demonstrated how insiders own enrichment. A former SCOFF of the clinic took advantage his knowledge that money is supposed to go directly to a federal office. However at the free clinic, similar to the federal office. For over two years he had clinic workers return these checks, which he deposited into this account that he actually owned. He allegedly set 1 . Use appropriate segregation of duties including master vendor file responsibilities. See if duplicate vendors have the same TIN. A corporation incorporates into their policy and procedures, the more difficult it is for