Missing Disbursement Documents (Part 2)

In my previous column, I discussed fraud case studies that revealed some of the problems fraud examiners can encounter when supporting documents for disbursement transactions are missing. Here we conclude by discussing alternative procedures you can use to determine if the transactions were made to valid vendors for authorized business purposes.

HOW EMPLOYEES DESTROY RECORDS 

Unscrupulous employees usually become desperate if they think their carefully concealed disbursement frauds are about to be discovered. They often remove the irregular documents from the office files, burn them in their home fireplaces or barbecue grills, shred them, or discard them in the trash or landfill.

But some fraudsters will go even further. I've investigated a few cases in which the culprits tried to cover up their crimes with arson. Employers can lose accounting records and sometimes the entire office building to fire. Every time I see a newspaper article about a fire at a state agency or local government I wonder where the fire began and the type of accounting records that might have been destroyed. Here are two cases that will show why I'm often suspicious.

Case 1: Living The Good Life On The Town's Tab  

In an earlier column I discussed the case of Beth, a small-town clerk-treasurer who, for 20 years, had almost complete control of every one of the town's financial transactions.