Motivation And Pressure Of Perpetrate Fraud Existed Within The Vbsd 's Management

733 Words Nov 16th, 2016 3 Pages
1. Incentive and pressure to perpetrate fraud existed in the VBSD’s management. Every year, the school got limited aid to provide educational service and they also needed to report their performance to the School Board members so they get the pressure to perform well in order to get aid. Within the budget restriction, they may not able to perform the projects that could improve the school performance. Therefore, the Superintendent intentionally committed fraud by executing the unbudgeted project without approval. Also, Superintendent understood the surplus fund will return to City and he believed it is better to spend all the fund. Therefore, he got the incentive to insist on overestimating federal aid to prevent surplus fund. Also, the School Board had minimal punishment for management who is overspending the budget. In the case, even though the superintendent executed the unbudgeted projects without approval, the board did not make any response to his act in a form of a punishment. Therefore, the superintendent understood he would not be punished by the School Board and gave him the incentive to commit a fraud.
The inappropriate segregation of duties gave an opportunity to management to commit fraud. Spigot consolidated the positions of CFO, Director of Accounting, and Director of Budget Development under the CFO title that the duties of each position were conjugated to CFO’s duties. Also, the Associate Superintendent departed so no one supervised the CFO position.…

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