How Her Staff Stole Millions from the Government
An Auditor’s Diary
Monique was meek and known to be angelic. She handles the collections and disbursement of funds. Years later, the Government’s check bounced. It all pointed out to her. Worst, Monique’s Boss will be literally paying the price.
How did it all happen?
Our job as State Auditors is perhaps one that involves so much intrigue and interest. Though our reports are transparent and open to the General Public, records are treated with utmost confidentiality, such that names used in this article are not their real names and the nature of the agency involved will no longer be detailed for privacy purposes. The mere intention of this write-up is to identify red flags that you might also notice in your workplace. Prevention is and always will be better than cure.
If you wish to know a little background about State Auditors you might want to read my previous article:
It was a demanding afternoon when our Office received a complaint from our Country’s President Hotline-8888 (National Public Service Hotline) where a concerned citizen requested for special audit relating to a certain Government Agency’s financial officer.
Following standardized procedures, collating all the gathered financial documents, relevant data, series of interviews, and inquests, our assessment revealed Millions of Government losses.
1. Disbursements are made through cash advances making all checks predominantly payable to Monique.
Cash advances shall only be resorted to when confronted with impractical and uneconomical situations. Defining this mode at their terms, they have made it a habit to Advance money and liquidate afterward.
2. The missing asterisk that led to Check Tampering
Leah happens to be a newly elected Boss giving too much trust and confidence to the experienced Monique.
On the other hand, it has been Monique’s practice to leave a conservative space before and after the figures when writing for a check. Without the asterisk before and after, the check is exposed to tampering.
For instance, the expenditure was particularly for a travel costing only 2,000. With the missing asterisk before and after the amount and words, she tampered the check by adding 20 before the amount. With the check made payable to her, she was able to withdraw 202,000 instead.
This is a classic example of an inexistent internal control. There are several measures to easily detect this scheme, in the parlance of prudence, review of Bank Statements, and even rechecking the disbursement documents would have saved the Government from losses.
3. Gaining friends for Check Rediscounting
Check re-discounting involves an exchange of cash with a minimal payment often ranging only from 1% to 1.5% of the check amount. This is perhaps the most convenient way instead of queuing in the Bank, it can be easily encashed through rediscounting from third parties (Better if a gained friend).
Right before the Government’s cash is dried out, rediscounting proves to be a brilliant idea leaving collateral damages to the rediscounting party.
4. Tactical delaying of reports to conceal questionable transactions
Had these reports been conscientiously submitted, these could have been reviewed.
Now, who will pay? Laws in our country have made it clear when the Financial Officer absconds, this will all redound to the Elected Head. As of now these individuals have already demanded payments and are solidarily liable for the millions of losses. Accordingly, this case is still undergoing litigation and lawsuit.
These are only one among the number of findings that truly appalled me. Random interviews with concerned individuals made it even known how it is unexpected of Monique to embezzle a large sum of money considering her modest lifestyle.
Trust matters but with caution, as the head of the agency, getting a bird’s eye view of what we are constantly dealing with should have been in place and critically observed. Have you encountered cases like this? I would love to hear your thoughts.
