Business
Office
“Count on Satisfaction”
Cynthia Villarreal
Accounting Group Manager
872-4610
cvillar@southtexascollege.edu
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What would you do?
It’s 8 am Monday morning and you are waiting to clock
in at your building. You notice the employee in front of
you clocks in, exits the building and drives off in their
car.
a)
b)
c)
d)
e)
You clock in and go on with your day
You inform your supervisor
You inform the Director of Human Resources
You contact TimeForce (Ana Gonzalez)
b or c
What would you do?
You notice one of your coworkers who is always staying
for overtime spends time throughout the day on
Facebook and talking to coworkers regarding personal
matters.
a)
b)
c)
d)
You inform the employee that it’s not acceptable
You inform their supervisor
You inform your supervisor
You don’t say anything

Fraud
•

intentional deception to unlawfully deprive the College of
something of value
Waste
•

Purpose
extravagant, careless or needless expenditure of College
funds, incurring of unnecessary expenses, mismanagement
of college resources or property or the consumption of
College property that results from deficient practices,
systems, controls or decisions
Abuse
•
intentional, wrongful, or improper use or destruction of
College resources; excessive or improper use of an
employee or official’s position in a manner other than its
rightful or legal use
2014 Global Fraud Survey

Occupational Fraud
•
the use of one’s occupation for personal
enrichment through the deliberate misuse
or misapplication of the employing
organization’s resources or assets.
2014 Global Fraud Survey
Three Major Types of
Occupational Fraud

Asset Misappropriation – 85%
•

Corruption – 37%
•
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Theft or misuse of organization’s cash or assets
Off the books fraud that occur in the form of kickbacks,
gifts, or gratuities to employees from
contractors/vendors
Financial Statement Fraud – 9%
•
Deliberate misrepresentation of the financial condition of
an organization through intentional misstatement or
omission
Fraud Triangle
When these three sides of
the triangle are present,
there is a much higher
than normal chance of an
individual committing a
fraud.

Pressure-motivates the
crime

Opportunity-the
method by which the
crime can be committed

Rationalizationmindset and thinking that
justifies the crime to
make it acceptable
Fraud Triangle
Pressure
Serious financial problem that
requires immediate attention and
cannot be resolved by ordinary
financial resources
FRAUD
TRIANGLE
Opportunities
Become aware that financial problem
can be solved by stealing from
organization or falsifying
organizations records
Rationalization
Mindset and thinking that what you
are doing is justified i.e. you haven’t
received a pay raise and it’s ok to
take the money
2014 Global Fraud Survey
Behavioral Red Flags
2014 Global Fraud Survey

Detection Methods


Proactive

Tip – 42%

Management Review – 16%

Internal Audit – 14%
Passive

Accident – 7%

Account Reconciliation – 7%

Document Examination – 4%

External Audit – 3%

Surveillance/Monitoring – 3%

Notified by Law Enforcement – 2%

IT Controls – 1%

Confession – 1%
Factors Contributing to Fraud

Poor internal controls

Management override of internal controls

Collusion between employees

Collusion between employees and third
parties
Examples of Acts of Fraud, Abuse and
Other Improprieties

Theft or misappropriation of funds

Falsifying timecard with time not worked

False overtime

Sick Time abuse

Use of College property for personal benefits

Waste of supplies

Fictitious vendor, employee or student payments

Personal purchases on College credit cards
Examples of Acts of Fraud, Abuse and
Other Improprieties

False reimbursements

Forgery or alteration of documents

Unauthorized use of records or access to information
systems

Falsification of reports to management or external
agencies

Authorizing or receiving compensation for goods not
received or services not performed

Improper handling or reporting of financial
transactions
South Texas College
Guidelines for
Reporting and Investigating
Suspected or Known Fraud, Abuse
and Other Improprieties
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http://hr.southtexascollege.edu/forms/policies/policies_reporting_fraud_procedures.pdf
Introduction

STC is committed to creating an environment
where fraud, waste, abuse and other improprieties
are not tolerated

Responsibilities for educating employees

Responsibilities for internal controls

Responsibilities for identifying and evaluating
risks
Employee Responsibilities

Report the act to:
•
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Immediate supervisor,
Next highest level of management,
Director of Human Resources,
Anonymous Fraud and Ethics Hotline, or
State Auditor’s Office Fraud, Waste and/or
Abuse Hotline
Employee Responsibilities

Employee should prepare written report
 Department where the act is occurring
 What is occurring
 When it occurred
 Who is involved
 How is it occurring

Employee will refrain from further examination of
incident with anyone other than proper personnel
Employee Disciplinary Actions

An employee –

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
found to have participated
who hinders a fraud inquiry or investigation by
making a false or misleading statement
who has knowledge of fraud of a dishonest act,
but fails to report it according to these guidelines
Shall be subjected to disciplinary action
Doing What’s Right

If you don’t feel comfortable
discussing the issue within normal
channels, you may call The Network,
an independent company which
provides an anonymous reporting
service for hundreds of companies
worldwide.
http://finance.southtexascollege.edu/businessoffice/forms/alerts/
Alert_2006_08.pdf
Doing What’s Right

This service is not intended as a substitute for
speaking directly with management.

It is an option that is always available if you want to
help, but prefer not to give your
name.
Doing What’s Right

Anonymous Fraud & Ethics Hotline

1-800-482-5158

This toll-free number is staffed by The Network,
an independent organization operating 24 hours a
day, 7 days a week. You do not have to give your
name. An Interview Specialist documents your
concern, assigns you a personal reference number,
and relays your concerns to the company.
Fraud Survey
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http://finance.southtexascollege.edu/businessoffice/survey.html
Questions