Forensics Journal - Stevenson University 2013 | Page 40

FORENSICS JOURNAL

complies with the purchase agreements. The religious organization
should ensure they received the quality goods or services contracted
for and not substandard, unwanted, or non-negotiated goods or
services. In addition, detailed reviews of the vendor’s procurement
history should be conducted to detect any unusual pricing or payments, which could indicate fraud.

CASH DISTRIBUTION
Similar to cash receipts, there are a variety of cash disbursements
schemes, as well as various corruption schemes. In comparing the
two types of schemes, the distinction is where and when they occur
during the procurement process. Corruption schemes attempt to
influence the purchasing process. Thus, when cash is disbursed to pay
an invoice, the payment appears legitimate and justifiable. Cash disbursement schemes misdirect funds in the payment process. Unlike
cash receipt frauds, internal controls cannot be limited to one or two
schemes. Therefore, the Board must implement a network of controls
to provide adequate fraud deterrence.

• Controls to deter check tampering
There are two primary methods used in check-tampering schemes. In
the first method, the perpetrator uses blank checks to create personal
payments. In the second method, the perpetrators redirect checks
from vendors to themselves. Controls over blank checks and checks
ready for mailing will deter most check-tampering schemes.

The most common corruption schemes are kickbacks, bribery, bidding process fraud, and undisclosed conflicts of interest. Kickbacks
are payments to staff members for approving payments on invoices
for goods or services never delivered or with inflated pricing. Bribery
occurs when staff members receive payments to influence the bidding
process. The last corruption scheme occurs when staff members have
a hidden economic or personal interest in the bidding process, which
is adverse to the organization’s best interests.

Religious organizations must start with control of blank checks.
Most forgers will take the last check in a series of checks to create
counterfeit checks. Therefore, the first step is to seal boxes of blank
checks with security tape. Boxes with a broken seal are possible signs
of stolen checks. The unused sealed boxes should be periodically
checked for seals that have been tampered with or are broken. Next,
the Treasurer should ensure checks are used in numerical sequence.
This is especially important when a new box of checks is opened for
use. Any non-sequential checks should be flagged for an audit of the
check register for check sequence numbers. Lastly, any voided checks
should be recorded and the checks destroyed.

Primary cash disbursement schemes are check tampering, bil [