By Rod Smith
An employee received notice that their organization was about to be audited. The auditors provided a list of items to be pulled and have available upon their arrival. As the employee was pulling the requested items, she discovered that some of the documents weren’t routed properly, as they were not signed accordingly. Unfortunately, the employee covered up her mistake by forging the signatures, so she avoided a write-up – temporarily.
Weaknesses in the organization’s systems controls also allowed this employee to purchase items and enter into agreements that were outside of the norm (several items she purchased were personal items).
Several months went by, and one of the managers realized that he hadn’t signed any documents from this employee. Thankfully, this manager had his own system where he had color-coded folders for certain departments that held documents to be signed. The manager noticed that the purple folder, corresponding with this employee’s reports, had been empty for a few months. The manager became inquisitive and alerted superiors, who forwarded their concern to their audit team.
A simple desk review showed that the employee had forged documents and entered into contracts and purchased goods that were not allowable.
(–reprinted from July 2017 Internal Controls)