Chapter 6
What type of fraud is a payroll scheme?
Fraudulent disbursement
What category of payroll fraud was committed in this case?
Falsified hours and salary schemes
What type of payroll fraud did bookkeeper commit?
Ghost Employee
How was the bookkeeper from the Ghost Employee case discovered?
Some one from the board recognized a unfamiliar person on payroll.
What are the three categories of payroll fraud?
1.) Ghost employee schemes
2.) Falsified hours and salary schemes
3.) Commission schemes
How much did Harkanell end up defrauding the hospital and how many years was he sentenced to prison?
$1,570 and 35 years.
What is one way to prevent or detect a ghost employee?
1. Personnel records should be maintained separately from payroll files
2. Verify personnel information
3. Run reports to test for no SS numbers, or other missing information
What lie did the bookkeeper tell to hide her fraud?
The employee was a relative.
What are the two ways to commit a commission scheme?
1.) falsify the amount of sales made or
2.) increase his rate of commission
List the three ways that Harkanell had been overstating his hours.
1. Recording hours that he had not actually worked.
2. Posted his hours to shifts for which pay was higher.
3. Reported vacation time as time worked.
Why did the bookkeeper think the chance of getting caught was low?
Because the board gave one person the responsibility paying bills and control of the checking account.
What are the three duties that need to be segregated?
1.) Authorization
2.) Record keeping
3.) Custody
Is a Ghost Employee always fictitious person?
No, a Ghost Employee can be a real person that does not work for the company.
What is one thing that the hospital should integrate into their hiring process?
Conducting thorough background checks on prospective employees.
How much did the bookkeeper steal?
$15,000
What's the largest city in India?
Bombay
Out of the top 5 fraudulent disbursements where does payroll rank?
Number 4
How was Harkanell ultimately found by the police?
He was pictured in an article by a NFP organization, who had just helped Harkanell and his family buy a new home. After this article was discovered, the neighborhood where the house was located was able to be narrowed down and from there they were able to find the house based on the photo he was featured in.
How much jail time did the bookkeeper receive?
0
Who lived at 221B, Baker Street, London?
Sherlock Holmes