Establishing Anti-Fraud Programs: Navigating the Academic Waters

USA Today proclaims “Madoff’s gone but Ponzi schemes go on” and Bloomberg notes that the Securities and Exchange Commission is considering establishing a “fraud college” to train staff in detecting market abuses. Job opportunities for college and university graduates with anti-fraud knowledge, skills, and abilities (KSAs in academic parlance) are growing fast. For established anti-fraud professionals interested in promoting higher education, an important question is: How can we help students develop the critical KSAs (see this month's “Starting Out” column) they’ll need to succeed in a career in this field? In this column, we’ll provide guidance on how academicians can navigate the waters for college and university course and program approval.

From 2003 to 2005, the U.S. Department of Justice’s National Institute of Justice (NIJ) funded an important project to develop a model curriculum in fraud and forensic accounting. This model, free online at https://www.ojp.gov/pdffiles1/nij/grants/217589.pdf, outlines the content to consider when developing anti-fraud courses and programs. The ACFE’s Anti-Fraud Education Partnership site offers free syllabi, videos, and other materials to colleges and universities as long as the term “fraud examination” is used in the course or program title.

When these resources are combined with the extensive professional expertise offered by many ACFE members, the issue of “what to teach” is easily solved. The greater challenge is convincing a college or university to adopt a new course or program in these tough economic times when many higher education budgets are being slashed.

In its November 2008 edition, Issues in Accounting Education reviewed the NIJ model curriculum and the creation and operation of programs at four schools: Florida Atlantic University, Saint Xavier University, Utica College, and West Virginia University.

The following is based on the experience at another school: York College of The City University of New York (CUNY). York offered its first fraud examination course in 2004 and, because an impending New York State Education Department accounting regulation soon would require 150 credit hours of university-level education, York recognized that opportunity was knocking! Over a nine-month period during 2005, forward-thinking academics at York College gained approval for a Letter of Intent (LOI) to develop a master’s of science in business with a track in fraud and financial forensics. (Kranacher is spearheading the drive to establish the program. – ed.)

Here are some items to keep in mind when seeking course and program approval (based on York College’s experiences):

Step 1: Develop an overriding rationale for the course or program. The State of New York’s impending regulation for increased course completion levels for accounting students, as well as overall projections that job opportunities in fraud examination and financial forensics would outpace other related fields, was a major impetus for York College to develop a graduate track in this growing field.

Colleges and universities are businesses, and, consequently, are likely to focus on the incremental tuition dollars derived from the creation of a graduate program. Thus, financial considerations play an increasingly important role in curriculum decisions: revisions, additions, and cancellations. Therefore, for professionals hoping to encourage a college or university to create offerings in fraud examination, they need to understand the opportunity from the perspective of the organizational leaders who are focused on expanding revenues and controlling costs while also providing exceptional opportunities for their students.

This might be the most important aspect of this step: Prior to submitting proposals in writing or developing course content and syllabi, meet with campus leaders – including those in charge of budgets (CFO, controller, budget director, etc.), student admissions and placement counselors – to determine their priorities and sensitivities.

At York College, fraud examination program champions had extensive preliminary meetings and discussions with the college president prior to drafting the proposal. Most college or university officials will share their concerns and perceived opportunities when asked. Some ideas are “dead on arrival” if presented from one perspective, but the same idea might ultimately be approved when considered from another vantage point.

Step 2: Develop a program overview. York’s LOI was presented to the university’s graduate council and larger university community. The document’s essential components included: 1) the proposed program’s mission and goals 2) the need for the proposed program 3) the targeted student population 4) the proposed curriculum 5) revenue projections and resource cost estimates, and 6) a description of how the program would be evaluated. The LOI addressed each of these criteria by how it would fit into the university’s mission, goals, and objectives.

Step 3: Gain preliminary approval to advance the proposal to the next and more detailed stage. The approval process can be arduous; few initial proposals are accepted as written. During the preliminary review process, champions of the fraud examination and financial forensics program need to be flexible and willing to negotiate. It’s helpful to decide those aspects of the LOI that are most important or even critical and those that can be adjusted or even eliminated.

Step 4: Identify teaching faculty and develop the program courses. Once the program overview has been approved, flesh out the details in a more comprehensive manner. For example, the full proposal includes the syllabi, course descriptions, and outlines for each of the proposed courses. It also includes details on the current faculty such as background, credentials, publications, and contributions to the field.

Step 5: Gain approval for the program through the appropriate college governance bodies. The university leadership in Step 2 sets the ground rules for approval. However, the devil is in the details at the college level. Normally, the course or program champions need to identify the real decision makers and their advisors, advocates, and detractors. Each group needs to be included in the process along the way to ensure the program approval doesn’t get derailed.

Step 6: Programmatic implementation. Success is never guaranteed, even with a complete set of approvals. Courses must be staffed, students solicited, texts selected, and assignments developed. However, the good news is that course and program champions are now working with those individuals who also believe in the mission and have the expertise to successfully create the courses.

POLITICS AT EVERY LEVEL 

The underlying politics, of course, and programmatic approval is apparent at all levels: university, college, and department.

• At the university level, other colleges will be concerned that the proposed program might directly compete with their established programs.
• At the college level, the challenge is to gain the support of other disciplines for the program. The task is easier if you promote an interdisciplinary program because each department is able to benefit by sharing a “piece of the pie.”
• The primary department-level challenge is to offer faculty members enough topical material in their areas of expertise to get them to buy into the proposed program. After all, you need those department faculty members to accomplish the bulk of the work subsequent to the approval process. You’ll also need a cohort to shoulder the responsibility for developing syllabi and outlines for each of the new courses listed in the program proposal. Those individuals also will be intimately involved in presenting the course proposals to the appropriate college governance bodies and, ultimately, teach the courses.

TIMING IS CRITICAL

Subsequent to the approval of the LOI for the master’s program at York, the driving faculty member behind the initiative took a temporary leave from the college to pursue another professional opportunity. Upon returning two years later, she found that no one had “picked up the ball” during her absence to move the process forward. Because of the time lag, according to CUNY policy, the process had to start again from the beginning. However, there now was a new academic leader at the university and concerns about availability and allocation of resources stymied efforts to move forward. The old adage “strike while the iron is hot” never seemed so appropriate.

Today, York College professors continue to teach the original fraud examination course, and it remains the most popular elective among accounting and business majors. The faculty hasn’t given up on the master’s program and waits patiently for the time when the stars will again align for the master’s program approval.

In the meantime, York College is expanding fraud examination opportunities by developing additional fraud and forensic courses for undergraduates. Students can take these courses as electives as the basis for new undergraduate majors or as part of double majors for accounting or business students. Possibilities of working with other CUNY colleges are also being explored, which would allow for sharing of resources among colleges and capitalize on the related efficiencies.

For those who are committed to fighting fraud and giving students the tools they need to succeed in this field, regardless of how long it takes or the challenges faced along the way to achieving this goal, the results are undoubtedly worth the effort.

Mary-Jo Kranacher, MBA, CFE, CPA, is chairperson of the Accounting and Finance Department at York College of The City University of New York. She is also York’s ACFE Endowed Professor of Fraud Examination, president of the Institute for Fraud Prevention, a former member of the ACFE Board of Regents, and editor-in-chief of The CPA Journal, the official publication of the New York State Society of CPAs. Kranacher is former chair of the ACFE Higher Education Advisory Committee and the originator of the Fraud EDge column. 

Richard “Dick” A. Riley Jr., Ph.D., CFE, CPA, is a Louis F. Tanner Distinguished Professor of Public Accounting in the College of Business and Economics at West Virginia University in Morgantown. He is chair of the ACFE Higher Education Advisory Committee and the vice president of operations and research for the Institute for Fraud Prevention.