Amar, an accountant who handles the employee reimbursements wing has a very humble personality who respects seniors & treats juniors equally. He has been handling the reimbursements for more than 2 years and constantly appears to be busy.
Here’s the IT tool QEX & the process he has been handling in it:
He prepares an excel sheet which contains the details of the reimbursements to be made and sends it to the payables team for payment. The payables team after checking the payment made clears the ticket.
He identified a loophole in the system, where he can send the payments to the payables team without closing the ticket in the QEX Portal. After the ticket is cleared by the checker at the Payables end, the ticket remains open for Amar to close it.
Amar then decides to process the already paid reimbursement and sends it again for disbursement. This is the test for checker, but the checker must deal with more than 300-line items every week which makes it difficult for him to identify duplicates. Once the payment is made to the same person again, Amar calls up the person and tells an error had occurred and the payment has been processed twice and then gives his personal bank account and asks the person to deposit the amount there under the promise that he will then deposit it in the Company’s account.
Amar assessed and picked only those gullible employees who were sitting far away from the main office in multiple cities.
Amar had been doing this for almost two years without getting caught. How was this identified then? One employee found this to be suspicious as Amar was asking the money to be deposited in a personal account than directly into the company account. This triggered an investigation and the findings were later submitted to the Management.
Fraud Triangle:
Perpetrator Response: I did it because I could, and I did it in small figures so that I could stay out of the radar. Your system lacked the controls, and I made use of the opportunity.
Questions to ponder upon:
- Whose responsibility is it for the fraud having gone unnoticed for almost two years?
- Do you think the checker was also involved in this activity, that duplicate claims went unnoticed in his watch?
- What should have the Internal Audit team done to identify this on time?
Until Next Time !
Interesting read on fraud.
Insightful article. I enjoyed it a lot. Carry on writing such useful stuff.
lucid and quick read, thanks for the info.
Thank you all for your kind words !