ACFE Heartland Chapter Meeting
Tuesday,
January 11th, 2005
Park Inn
Regency Lodge
Heartland Chapter member Don
Holdegraver was the featured speaker for our January meeting. Mr. Holdegraver is the Director of
Operations Analysis at the University of Nebraska-Lincoln. His presentation was titled "P-Card Fraud in
the Heartland, A Post-Mortem."
Mr. Holdegraver stated that in
2003, it was decided that the university should conduct random audits of some
of its operations outside of the Lincoln campus. One of the departments chosen for audit is located in rural
Nebraska. In preparation for the audit,
one of the items selected for review were several transactions with the
department manager's purchasing card.
Upon beginning the review, it
quickly became apparent that there were numerous irregularities in the use of
this particular employee's card. The
employee ultimately cooperated in the investigation. He acknowledged having used the card inappropriately on numerous
occasions, and cooperated in the recovery of over $32,000 of merchandise from
his personal residence. He was
immediately terminated.
The investigation found several
themes common to many occupational frauds.
The perpetrator was a "trusted employee", well liked by everyone both at
work and in the community. There was a
subordinate employee who suspected wrongdoing, but was unsure of who to report
her suspicions to or what the ramifications to her job might be. The office was in a location remote from the
organizations central operations, making it prone to limited oversight. Weak internal controls were also found with
respect to the university's purchasing card system. The p-card system has been completely revamped to strengthen the
internal controls in the program.
