vendor bank account he became suspicious that he was living beyond Accounting and human Suggested Action Steps: had set up. Allowing one what his salary should allow (a common red resource managers, as well as agency security individual to request and flag for fraud). She talked with one of Mueller administrators, are currently completing an annual approve payments, and co-workers, who investigated and then reported system security review and verification exercise. take custody of the him. Had supervisors or co-works Managers should view this assignment as an Mueller’s resulting check is a poor been more observant and questioning of his opportunity to improve agency internal controls. segregation of duties and lifestyle, the fraud might have been detected As you complete the review of your staff security a good recipe for fraud. much sooner. Studies show that tips are the roles for reasonableness and proper segregation of most common way that frauds are detected. For duties, keep in mind the lessons from the Mueller - Fraud Red Flags this reason, we all need to watch for unusual fraud case. Mueller used his events that could be red flags for fraud, and gains to fund a If you have questions, please contact Mike Thone, report any suspicious activities through our lavish lifestyle. Internal Control Specialist, at 651-201-8132 or at established reporting channels. agency’s Ultimately, his ex-wife Mike.Thone@state.mn.us
vendor bank account he had set up. Allowing one individual to request and approve payments, and take custody of the resulting check is a poor segregation of duties and a good recipe for fraud. Fraud Red Flags - Mueller used his gains to fund a lavish lifestyle. Ultimately, his ex-wife became suspicious that he was living beyond what his salary should allow (a common red flag for fraud). She talked with one of Mueller co-workers, who investigated and then reported him. Had Mueller’s supervisors or co-works been more observant and questioning of his lifestyle, the fraud might have been detected much sooner. Studies show that tips are the most common way that frauds are detected. For this reason, we all need to watch for unusual events that could be red flags for fraud, and report any suspicious activities through our agency’s established reporting channels. Suggested Action Steps: Accounting and human resource managers, as well as agency security administrators, are currently completing an annual system security review and verification exercise. Managers should view this assignment as an opportunity to improve agency internal controls. As you complete the review of your staff security roles for reasonableness and proper segregation of duties, keep in mind the lessons from the Mueller fraud case. If you have questions, please contact Mike Thone, Internal Control Specialist, at 651-201-8132 or at Mike.Thone@state.mn.us
February-ICB-2015_tcm1059-127470.docx