How Purchase Order Software Helps Prevent Fraud

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How Purchase Order Software Helps Prevent Fraud
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Fiona Fraud has been working as a secretary for
the School of Nursing at College Town University
for nearly fifteen years. She has a reputation
for being friendly and approachable, and is
generally good at what she does. In addition to
her secretarial responsibilities, Fiona is also
tasked with arranging catering and entertainment
for all of the events that the School of Nursing
puts on each year when their newest group of
graduates is matriculating. It is easier to let
Fiona have full control of the graduation events,
as to split up the task between several employees
would make things more complicated for everyone
involved. That is what Fiona has told her
superiors, and they have no reason not to believe
her or to think of her as a potential fraud risk
or so they think.
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Fiona has credit accounts with several various
vendors and party stores, and also has company
credit cards with several local department stores
and chain stores. Whenever invoices arrive from
the vendors, party stores and department stores,
Fiona hands the receipts over to the accounting
and billing department, who then ensure that the
amounts on the receipts match up to the amount
that appears on the bill. So far there has never
been a discrepancy between any of the bills and
the receipts.
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The problem is that no one is examining the
receipts other than those in the accounting and
billing department and those who work within that
department do not know how much Fiona is supposed
to be spending. Because the amounts that Fiona
spends are about the same each year, the company
has no clue that Fiona purchases her entire
summer wardrobe on the companys dime each year
and that she also buys her Christmas presents for
the next winter by using the company credit cards
in the spring. The company does not realize the
risk they are taking by entrusting Fiona with the
cards and has no idea of the large scale fraud
she has been perpetrating for over a decade.
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The School of Nursing can prevent such fraud from
occurring by establishing a purchase order system
where a supervisor must be notified before Fiona
goes on her yearly shopping trips to gather
supplies for the graduation celebrations. Such a
system can involve various components like
requiring that Fiona fill out a preprinted
purchase order slip, and then placing a call
notifying the stores that Fiona travels to that
there must be a preprinted purchase order or that
the store will not receive the funds for the
purchases.
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If Fionas supervisors are in on the fraud (for
example, Fiona may be shopping for them as well),
things may become more complicated. Having more
than one person sign off on any purchase order is
a great way to further minimize risk and prevent
Fiona from being able to perpetrate the fraud.
The more safeguards are in place and the more
people who are aware of each time Fiona will be
using the companys funds to pay for purchases
the less likely it is that she will be able to
continue her behavior undetected. Purchase order
software has many safeguards built in that
prevent someone like Fiona from perpetrating
fraud upon your company.
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40223, USA
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