Question

Please answer the following discussion:

The town clerk receives the mail for the Town of Charity, every day. Included in the mail are utility payments, both in cash and check form. The amount of money taken in by the Utility Department is lower than it should be. The Utility Department also takes in checks and cash on a daily basis. No customer has complained that they are not credited for payment of their bill. Different people make the ledger entries in the Utility Department Office. Different people make the bank deposits. How did she commit the fraud?

Please established the theory and solution based on fraud triangle.

Answer 1

Solution:-

I think that the clerk steals some of the utility cash payments when she receives the mail for the Town of Charity. I don’t believe that she is stealing check payments because they are payable to the Town of Charity and checks deposits are easy to track. No customer has complained that they were not credited for payment of their bills because somehow she is applying another kind of credit to the account of those clients from whom she is stealing the utility cash payments when she receives the mail for the Town of Charity. If different people are making the ledger entries for the Utility department, either she has access to apply credits to the customers’ accounts or somebody else who post entries in the ledger is in complot with her to commit the fraud. In my opinion, if she has access (or somebody else do it for her) to apply credits to customer’s accounts, it is irrelevant who makes de deposit. The employees in charge of making deposits will deposit the full payment of those accounts that hasn’t been altered and will deposit the difference between the total bill less applied credit of the altered accounts, therefore thecustomers’ amount due will be zero after the deposit.

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