Accountant resigns over $144,000 in missing receipts

[cautery]

I come from a family full of accountants and book keepers... And my military, IS/IT, et al. experiences have given me the opportunity to see accounting systems in multiple industries, et al. up close (think, how do I automate this manual accounting system... or, How do I transition this corporation from this paper/antiquated accounting system to <insert system here> Yes, I'm old; I've been around that long).

I have absolutely no information whatsoever on this deal... but I do have some experience with organizations/companies using credit cards in the field... be they for regular operational needs, or travel, et al...

Here's the deal... there are almost ALWAYS "unreconciled" transactions... Keeping credit card accounts... especially when there are multiple banks and multiple cards for each bank... is a ROYAL PAIN IN THE ASS!!!

Every transaction on the credit card statement requires a receipt (or suitable replacement) to "back up" the charge. The receipt is "coded" by the book keeper.... meaning that the transaction is assigned to an account number/type on the "books" (e.g. office supplies, travel, et al.)

Typically, receipts are required to be turned in "as soon as practical" after an expense is incurred. IDEALLY, the accountant keeps receipts in a "suspense file" by vendor/credit card company, et al. until the statment/invoice comes in. As the accountant receives the receipts, they typically add transactions in the accounting software/books to reflect the expense and "code" them against a budget aqccount, etc.

In a perfect world, when the statement/invoice comes in, the accountant "reconciles" the statement... meaning to match every transaction on the statement with corresponding transactions in the "books".
If they all match up perfect... same number of valide receipts EQUALS number of transactions on statement, then GENERALLY, everything is great.... This almost NEVER happens...

Typically, there will be expenses on the statement for which the accountant does NOT have a receipt... VERY common. It CAN become a nightmare, and book keepers/accountants HATE it because it is a HUGE pain in the ass to chase people down to get receipts that should have already been turned in....

Now, sometimes this can't be avoided... long road trips, road trips that extend across statement dates, etc...

MOST times, the "missing receipts" show up or are located... Bbob, sue, and Bill turn in their receipts with lame assed excuses (Oh, sorry, I forgot... that one was in my floor board, et al... <---- I formally counsel these people)
Sometimes, a receipt is lost or takes extra time to locate.... another long/pain in the ass process to document a missing receipt properly.

Sometimes, large events or a large number of travel/events produce a LARGE number of "missing" receipts.... (AKA: Accountant doesn't have them in his/her hands, they are "missing")

ANY transaction for which there is not a corresponding receipt is entered into the system from the statement and is placed in the "suspense" or "Ask the Accountant", or other "holding" account UNTIL the receipt is produced/documented lost, and the accountant is provided sufficient information to determine how to "code" the expense.

######################################################################################################

Now, in this instance, I have no first hand information, but with the information currently available, there are more possible plausible scenarios that involve no malfeasance, than there are plausible scenarios with wrong-doing.

Tossing around accusations/inferences alluding to possible financial wrong-doing without PROOF is irresponsible.

The MOST likely scenario in the present situation (again this is a SWAG, because I have absolutely no first hand knowlege), is that:

1) One or more receipts aren't "turned in" on a monthly basis and are suspended... (they are turned in late and cleard later)
2) Perhaps, there are a few transactions which have been pending for an extended period (for MY company, that would be more than 30 days). This should be cleared up... either the receipts located, OR proper procedures followed to justify the expense(s), create a missing receipt substitute, code the expense properly, CREATE PROCEDURES TO PREVENT RECURRENCE.
3) Nationals IS going on, and a huge number of transactions and a large amount of money are created/spent in the months leading up to the event..... perhaps accounting for the large "suspended" balance.

I have no idea why the bookkeeper quit, wrote the letter, or allegedly consulted counsel... maybe its what it looks like... I doubt it. Maybe she is conflating several issues into one to make her situation look better... I don't know.

That that letter is "out" in the open is an issue... If the ex-employee released it, it is a serious issue... Actually, I can't really think of a NON-issue creating person/reason to release that letter...

Bottom Line: Please be careful abbout what you sayy and accusations/insinuations you make... even in jest. It could seriously and needlessly damage reputations, et al. of innocent folks.
Would you want someone launching untrue/unfounded accusations and innuendo at you?

Edited September 18, 2014 by cautery

[Craig N]

Not that it means anything, but I have noticed (as have other folks in the LE world) that the majority of low-level embezzlement cases (credit-card and expense fraud) are middle-aged women. We had one hit our motorcycle club, and I've been involved in a couple internal investigations at work with them as well.

Regarding the first post..... I send my money to uspsa so I can compete in fun and challenging pistol matches. I am getting my money's worth and then some. These kind of allegations are not a good thing, but I believe the vast majority of honest and good people in the organization will get to the bottom of it, and I will continue to compete in fun and challenging matches.

p.s. I pay my taxes too, instead of renouncing my citizenship and moving somewhere else even tho I'm dissatisfied with many aspects of the US government.

Did she get to meet Mr Mayhem?

[Jollymon32]

I own a professional consulting company. I have over 30 employees,each with credit cards, who are traveling most of the time. Our American express bill is not delivered folded in an envelope but rather in a thick 8.5x11 envelope every month. On average the monthly bill is 20 to 30 pages long and contains over $50,000 in charges. It takes my controller two days to reconcile the statement. Never has there been a charge that remains unreconciled for more than two days. All of the employees know that they have to turn in their receipts, physically or digitally.

This is not rocket science, it may be tedious and boring, but nothing that would challenge a Junior bookkeeper. That USPSA cannot get this done points to a lax culture rife with lack of oversight and or general incompetence in the executive ranks in regards to financial controls and processes.

As I have stated before, I have zero confidence in this leadership team.

[Joe D]

And I thought IDPA had enough drama. It's a light weight compared to USPSA.

[MarkCO]

That all sounds just dandy Clay, but these are supposedly credit card charges. With NO RECEIPTS we can still close out our monthly accounting. Receipts are almost a double check. The credit card statement has the charge, and the vendor. If we see one we do not recognize, we call right away and figure it out. Having the receipt is easier, but a merchant can always provide a duplicate receipt, and the merchant ID and phone numbers are on the credit card statement.

You are correct though, with the information available today, the worst we can say is poor accounting practices.

[cautery]

MarkCO - I respectfully disagree... gotta have the receipt or can't finish the reconciliation.... properly. You CAN complete a recon without hard-copy for every transaction... in practice, everyone does.... because you have to make the books balance... but it is done so (properly) by "coding" the transactions with missing receipts as "suspended".

It's about the receipt. The receipt or receipt substitute is required for tax purposes... That's really the only reason the transaction is placed into suspense... simply a device to mark transactions that are missing hard-copy.

If you get audited by the IRS and cannot produce the hard-copy or an acceptable substitute, then they can disallow any deduction/credit you take based on that transaction.... NOT to mention, that missing receipts just make them dig deeper and with more interest into your stuff.... More time to complete "financial rectal exam" = higher cost to your bottom line.

When you choose to close an accounting period is a management policy issue.... has nothing to do with the recon.

The bank and/or CC rec process has nothign to do with "good" or "bad" charges... Simply with accounting for all the documentation and balancing the books...

However, the inability to document/receipt transactions is frequently how "untoward" activity comes to light.

Internal Controls for preventing fraud/theft are separate and apart from proper book keeping... One is to stop stealing/fraud, et al. The other is to satisfy the tax man... Having good books makes it easier to have a good Internal Controls system, usually.

You must have much better CC statements than I do... frequently, I have vendor info on my statements that make litttle to no sense at all.

HOWEVER, MarkCO, I do agree with you on the "calling" thing... Back when I needed one, I had a report that we ran that listed "undocumented" transactions. They were ALL investigated immediately. ALL were resolved within a reasonable period (max 3 days). There were a very limited and strict numbber of ways to "resolve" issues.

Personnel who were "frequent flyers" on the list experienced increasing discomfort every time they had an unreasonable/unexplained line on the list. But all that was management policy/internal controls that I/we chose to use... It is always a cost/benefit thing... Internal Controls cost money/time. The tighter the controls the more expensive... and the "return" is a diminishing one financially.

Edited September 18, 2014 by cautery

[MarkCO]

i agree you have to have a receipt, but maybe you missed where you can get a duplicate from the merchant, we have done so several times, it is really pretty easy. My company was audited by the IRS, exactly three days after I conducted an inspection at their offices related to working conditions complaints by their employees, and we passed with flying colors, so I do know what and how they look at the books and procedures.

[Neomet]

If there is a concern about inappropriate activity/missing/misplaced receipts/accounting practices/whatever why not drop the change for an independent accounting review? It doesn't sound like we are talking about going through 10 years of rfinancial ecords so it can't be that expensive. If it is just Joe Schmuck employee the expense management company we use can deal with it. If it involves an officer of the company and amounts of this size though an outside review is called for.

I would never take this as something unique and horrible and indicative of a need to tear down the organization. If , and a big if at this point please, there was embezzlement or misuse of funds this happens in almost every organization I have seen that deals with money. Churches, governments, insurance companies, condo associations, local softball leagues.... everything. The same goes for complicity or coverups of such actions. You find the people involved and address the issue at that level and try to learn from how they did what they did.

[cautery]

Sorry... yes, I guess you can go through the additional procedure of getting a duplicate receipt (there are also other options). This is getting a bit far afield now...

What I would do/have done. How I would handle it, et al. isn't really relevant here.... First, this would have never come up had it been my office/org to run. I don't let my personal accounts to vary by a single cent, much less an org to whom I have a fiduciary responsibility.

I guess my main deal here is that there is a BIG difference between:

1) Accounting/internal Controls that need work/oversight/enforcement, and

2) Accusations/insinuation of illegal use of funds, or other wrongdoing....

ESPECIALLY without sufficient proof...

[cautery]

it can't be that expensive.

Depends on what you call "expensive".... $250 per hour? $500 per hour? Several DAYS to a WEEK or MORE for an outside person to make a thorough examination of the books? How thorough?

My point is that UNTIL the BOD has determined if there is a need for something like this, why do it.

IF it is just lax enforcement of accounting procedures, then it is NOT needed... Management counseling, instruction, orders, et al. is what would be needed...

I am BETTING that if there is ANYTHING material to these allegations, there's a 90%+ chance that it is simply a need to adhere to/enforce proper procedures. AND/OR establish procedures if they don't exist.

IAW.... IF there is any merit to this letter ( a letter that should NOT have been a public document to begin with), then it's a 90%+ chance that it is a management issue, not a criminal issue.

[Neomet]

Cautery, I was talking about a review of the charges in question, not a complete audit of the books. At $250 an hour probably still worthwhile depending on the actual facts really are. The concern when you have alleged abuse by officers is the possibility of collusion or at least a lack of objectivity by other officers who are charged with internal reviews. I am not throwing stones at the BOD, simply stating a basic protocol which I have seen used in organizations.

As you point out none of us know what the facts are. You will note (reference the first five words of my post) I was not demanding this sort of approach, simply suggesting it if my understanding of what the concerns are is correct. If the facts are different or whoever makes the decision doesn't like the idea ignore it. It was a suggestion, not a call to charge the castle with pitchforks and torches.

[bishop414]

Did she get to meet Mr Mayhem?

Off topic, but great reference.

Edited September 19, 2014 by bishop414

[cautery]

Neomet - I understand.

[ToddKS]

There is software out there that addresses this issue. USPSA should invest.

In the world I live in, you fill out your expense report and provide your receipts or the company does not pay the bill and you are responsible. Mess around with this and the punch line is "You're fired".

Unless the whole thing turns out to be a fabrication, there is no spin you can put on this that makes it OK in my opinion.

Edited September 19, 2014 by ToddKS

[Neomet]

Neomet - I understand.

[pjb45]

Like said, I worked for Deloitte & Touche - $140,000+ is a very big deal. It would absolutely mandate an investigation.

People consult lawyers to understand the risk of a problem and its consequences. There is nothing wrong with consulting lawyers, per se.

My conclusion is the A/P person was worried that it would come back to her. She wanted to know her potential risk.

Nothing wrong with that.

There is a BIG wrong with the issue of $140,000.

[Dr Mitch]

Outside of these conjectural discussions and arguments, I have yet to be affected at all by any of these USPSA "problems". Matches continue to be held, scores get submitted, I continue to improve.

Perspective.

[Ming the Merciless]

This weekend should prove interesting as several hundred USPSA members will have the opportunity to ask Phil "WTF?" at the Handgun Nationals. I plan to ask and if I see Kim I will ask her as well, but I doubt she will be there as that would probably be too much stress.

[justaute]

I don't post much anymore because there's too much twaddle here.

USPSA management reminds me of a few of the investment bankers I worked with in the past -- they couldn't manage their way out of a paper-sack. Just because USPSA HQ's mis-steps don't affect the operations of local clubs, that does not mean everything is copacetic. Not sure whether there's duplicity or just mere incompetence within the organization. Nonetheless, from an outsider's vantage point, there is something amiss with this soap-opera -- any competent manager can see it.

[Round_Gun_Shooter]

This is what really bothers me. The administration continues to talk down to us, the members (customers) of the organization as if it is our fault we are upset.

http://www.uspsa.org/forums/index.php?showtopic=1313&p=14409

Glad I am not the only one

[RangerTrace]

Does anyone "know" if there is going to be a criminal investigation or has it even been referred to LE there?

[Strick]

Does anyone "know" if there is going to be a criminal investigation or has it even been referred to LE there?

An investigation into how someone not on the BOD got an posted the letter and into how Caleb got his hands on it for it to be posted on Gunnuts?

[Nik Habicht]

Does anyone "know" if there is going to be a criminal investigation or has it even been referred to LE there?

An investigation into how someone not on the BOD got an posted the letter and into how Caleb got his hands on it for it to be posted on Gunnuts?

I think he probably meant the other thing......

[blind bat]

Why should communication with the BoD be privileged? I persolally think there should be more transperancy not less.

[Strick]

Why should communication with the BoD be privileged? I persolally think there should be more transperancy not less.

There are certain issues that legally need to be privileged, such as employment issues. I am not saying that members should not be made aware of this particular issue, I am just curious how he got his hands on the letter before the BOD (or atleast at the same time) and who authorized him receiving and posting it.

If we want transparency we could start with that information. I think this is indicative of some of the major problems, personal agendas and not following procedures to correct issues. I keep hearing that we need business people running things, how this was aired is certainly not business like or professional.