Question

Case 3 – 1: Green Felt-Tip Pens, a Tape Recorder, and Embezzlement: Where did the Budget Process Fail? Located on pages 150 – 152 in Fiscal Administration (10th ed.) by Mikesell, Case 3 – 1 discusses the role of ethics and financial control processes for public entities. Read the entire case study and answer the following questions (Consider These Questions): 1. What standards of internal control were violated here? 2. How would you revise financial practices in the District to prevent similar fraud in the future? 3. Compare the roles of internal control and post-audit in the war against waste, fraud, and abuse.

Answer 1

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Answer (1):

Violations in Standards of Internal Control:

Isolation of obligations - No single individual ought to be given numerous specialists identified with an exchange , like as Hock, the business director was liable for submitting the requests just as was answerable for making installments, in this way it was simpler for her to hide the realities.

Occasional review - the appraisal of bookkeeping exchanges and frameworks on intermittent premise ought to be done , to discover cheats , if an extortion could proceed for a long time as for this situation it shows that the review technique was not productive enough.

Survey of financial balance - The ledger of a substance must be evaluated so as to be exceptional pretty much every one of the exchanges and installments. This case is an infringement of this inward control.

Physical control of Assets- the stock or merchandise engaged with exchanges ought to be considered genuinely the request for green tip pens was made over and over in any event, when there was no necessity shows that the stock was not checked or tallied.

Answer(2):

Revision in Financial Practices:

To forestall comparable misrepresentation later on the budgetary practices in the District should be altogether reconsidered. As a matter of first importance there is the need to merge the inner control works and guarantee that the parts of detachment of obligations, legitimate examining of books, autonomous checks, appropriate documentation and appropriate physical control of benefits are set up. Besides approaches and practices ought to be set up by the top administration to guarantee that there is an energetic and flourishing control condition. Criminal punishments ought to be forced and the region should make arrangement of genuine fines, jail and punishments in the event that anybody is found of any extortion.

Answer(3):

Roles of Internal Control and Post-Audit

The Internal control arrangement of an association ought to be sufficiently able to manage issues of waste, misuse and misrepresentation. The post review strategy is a sort or case of an organization's inner control. Inside control framework incorporates steps taken up to forestall waste, misuse and extortion.
Post review is directed to show that how well the interior control framework has been actualized, post review can be taken up at any phase after an exchange has been taken up. Post evaluating helps in better basic leadership .They fill in as an inward control work; they help in improving the inner control instruments as any inconsistency in the inside control framework can be checked through post-review. Inward control assists with forestalling any misrepresentation and post review will help in distinguishing any fakes so restorative measures ought to be taken if there should be an occurrence of any issue in the organization's inner control framework and in the event that any extortion is discovered, particular move would thus be able to be made.