Independent school under investigation over funding
A second independent school has been identified for misappropriating federal money destined for new classrooms and libraries to prop up its operating budget instead.
The federal government is investigating the ”improper or inappropriate’‘ use of Building the Education Revolution money by schools and is unable to rule out others emerging.
”There are two schools that we are aware of [to date],” said a spokesman for Chris Evans, the new federal minister responsible for the $16.2 billion BER program.
Shearwater, the Mullumbimby Steiner School, was placed into voluntary administration in March with debts of $10 million. The receiver, PPB, found the BER money had been spent on keeping the school operational.
It is the second Steiner school to have misappropriated federal money. Last week the Herald reported the Manning River Steiner School used part of its $250,000 grant for a library to patch up its working budget.
The problems involving the Steiner schools shifts scrutiny of the BER program to the independent education sector after the NSW government was pilloried for its handling of the money.
Under an agreement with the federal government, the Association of Independent Schools of NSW distributed the BER money to the two Steiner schools.
Dr Geoff Newcombe, the AIS executive director, said monitoring of all BER projects had occurred. “In both cases cited, the appropriate processes were followed and proved to be effective,” he said, ”No government funds have been lost in either case and all … program requirements have been satisfactorily met.”
(Source: Heath Gilmore, Brisbane Times – September 24, 2010)
Mortgage broker jailed for deceiving clients of money
Mr Michael Cay, 39, of Greenvale, Melbourne, was sentenced in the Melbourne County Court to four years imprisonment following an investigation by ASIC. Mr Cay must serve three years before he is eligible for parole.
Mr Cay, who was the operator of finance and mortgage broking firm, Jewel Financial Services Pty Ltd (Jewel), which is now in liquidation, pleaded guilty to four counts of obtaining property by deception and one count of obtaining a financial advantage by deception.
Mr Cay admitted that he deceived several investors of $475,149.07 to invest with Jewel. Mr Cay told the investors that this money was to be used by other Jewel clients allegedly seeking short-term loans. Mr Cay also told the investors that the loans would be secured either against the borrowers’ property, or property owned by Jewel. Neither of these representations occurred.
Mr Cay was also ordered to pay $381,600 compensation to victims.
The Victorian Court of Appeal dismissed the appeal against the sentence of Mr Michael Cay in November 2010.
(Source: ASIC Press Release 12/12/08 & 17/11/10 )
About Rushmore Forensic
Rushmore Forensic has significant experience at investigating property transactions, the actions of mortgage brokers and money tracing. For a complimentary and confidential discussion, please don’t hesitate to contact Andrew Firth.
Flying Under the Radar: Detecting Employee Expense Claim Fraud
When I’m asked what is the easiest fraud to detect in a business? – Expense Claim Fraud is always the answer. The use of keyword databases, random audits and automated alerts can quickly uncover employee abuse.
Many business managers think that employee expense claims represent a small percentage of their total spend and believe that there is only a small risk to their business. However on closer examination, many businesses find that over 10% of their total expenditure is processed through employee reimbursements and some employees are being reimbursed more than $10,000 per month.
Expense claim anomalies generally fall into 1 of 2 categories. The first is a breach in the company’s policies. This can range from an employee failing to sign the expense claim cover sheet to more serious issues such as breaches in the organisations delegation of authority. It is common for employees to also claim for expense types that are prohibited by the company. This can include use of limousines; hire cars; charter flights and expenditure at adult entertainment venues.
The second category of expense claim anomalies that we encounter is fraud and personal expenses. Recently we have discovered employees claiming iTune song downloads, DVDs, local restaurants, and other electronic purchases.
Whilst it is a relatively straight forward process to detect employee expense fraud, organisations need to ensure that their policies and procedures comply with relevant statutory and common law requirements. We recommend that a Workplace Relations Specialist is consulted from the outset. We also recommend that organisations implement a process to ensure that fraudulent claims are recovered from the individuals concerned.
Some of the high risk categories that we use to categorise potential employee fraud in a keywords database include:
- Clubs
- Cash Withdrawal
- Donations
- Duty Free
- Internet site
- Limousines & Hire Cars
- Memberships
- Seminars
- Restaurants
- Weekend Transactions
- Overseas (e.g. Thailand, Chonburi etc)
- Large values (e.g. over $2,000)
- Resorts
- Fashion & Exclusive Stores
My final piece of advice to finance and other managers in organisations is to find where the expense claims are being filed and at random intervals spend a couple of hours reviewing the claims in detail. I guarantee that the time invested in reviewing the claims will be well spent.