There’s nothing like a couple of high profile embezzlements to get accountants scrambling to review their company’s internal financial controls.
The most recent report involves a former business administrator at the University of Michigan’s Center for AfroAmerican and African Studies who allegedly embezzled more than $85,000 from the university using a UM issued credit card.
He allegedly bought computers which he then sold for personal gain, the UM reported.
And that comes on the heels of the nearly $1 million embezzlement from the Ann Arbor Amateur Hockey Association by Chelsea resident Kimberly Knight, who formerly served as treasurer of the nonprofit.
The AAAHA heist generated a lot of buzz at my house and with friends who had kids that grew up playing hockey in Ann Arbor.
After all, our annual holiday poinsettia sales were supposed to defray the expense of renting ice at the rink, not to be used as a down payment on expensive bling for the association’s bookkeeper.
There have been other local embezzlements in the news recently, but these two stand out locally.
And they were both preventable.
Any system of internal controls should have caught the thieves before their hands got deeper in the cookie jar.
Fact is UM accountants and the board of directors at AAAHA were not tightly administering or auditing a built-in system that would have caught discrepancies and would have exposed the crimes sooner.
For a compelling look at fraud in youth sports programs across Michigan, see Reporter Sherri Welch's story "Be more of a business and less like a family" published Feb. 1 in Crain's Detroit Business.
I’m no CPA, but I know any system should have internal controls that safeguard your assets.
Christine Galli, executive director of Technology In A Box Learning Services LLC in Detroit, outlined tips she published in an article “Spotting Fraud in Your Financials” on the Small Business Association of Michigan’s website.
Galli listed these signs of potential fraud that employers should watch for in financial reporting:
n Irregularities in time, frequency or amount.
n Transactions not entered timely, in wrong period or wrong accounts.
n Lack of original documentation for transactions.
n Missing inventory, physical assets or office supplies.
n Excessive credit memos or adjustments to accounts receivable.
n Common or insider names on customer or vendor lists.
n Duplicate payments or invoices.
n Increases in expenses — small tools, supplies or cost of goods sold.
There are all kinds of reliable internal accounting guidelines posted on the internet. And any CPA can help you review your company’s safeguards.
Two Ann Arborites were elected to statewide office this week:
n Yan Ness, CEO of Ann Arbor-based Online Technologies Corp., was elected first vice chair of the Small Business Association of Michigan at SBAM’s board meeting June 24 in East Lansing.
n Bill Milliken, founder of Milliken Realty Company, was elected treasurer of the Michigan Association of Realtors and will take office Jan. 1, 2011. The association has 21,000 members and 43 local associations across Michigan. Milliken began working in real estate in Ann Arbor in 1987 and previously served as a director of Republic Bancorp. He founded Milliken Realty in 1996.
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