1. Sherika Spies is the head of payroll. She is also the wife of Tim Spies who is the Lafayette Branch Manager.
2. Sherika could write extra payroll and bonus checks for her and her husband, which could easily be done since Bernie was usually out of the office and she also had his signature on a rubber stamp. Sherika could set up a ghost employee as well as write other employees an extra payroll or bonus check for them and receive a kickback from that employee.
3. Ghost employees are fake employees or employees that have been terminated and are used to cut a payroll check to, to take money from the company.
4. Check for multiple employees using the same address or the same bank account. …show more content…
There are a few areas of concern with the company that the new controller with Madon, Ona Scott, has come across. Due to the rapid growth of the company, she believes there is a lack of oversight in several areas as well as segregation of duties. Some of these areas include sales transactions, payroll transactions, and accounts payable transactions.
The Team took the following actions to examine the potential issues:
Obtained, reviewed, and analyzed procedures and documents pertaining to the payroll activity. Past and present employee data as well as payroll activity from 2011 and 2012 was obtained including employee IDs, street addresses, active/non-active employee status, and salaries.
Obtained, reviewed, and analyzed Madon’s Accounts Payable from the beginning of 2013.
Obtained, reviewed, and analyzed valve transactions from the past 6 months as well as the past 24 months. The data included invoice amounts when the inventory was sold to customers. It also included minimum and maximum purchase prices from vendors.
Obtained, reviewed, and analyzed the report provided by Ona Scott. On the report, Ona described red flags that came to her attention over the past six months. This data included an overview of the accounts payable process, overview of the payroll process, and an overview of the sales process.