Bret Hodgdon, Audit Partner, Davis & Hodgdon Associates CPAs was recently interviewed by Gareth Anderson of the Rutland Herald and Business Vermont on the subject of embezzlement prevention. See below for the full article:
Experts: More controls can stop embezzlement
By Gareth Henderson
Vermont has seen an increasing number of embezzlement cases in recent years, including a recent case in which the former director of finance for Hunger Free Vermont pleaded guilty to embezzling $165,000 from the nonprofit group.
In that case, Sally H. Kirby, 61, of Essex Junction, pleaded guilty in U.S. District Court in Burlington earlier this year to a felony count of forging securities with the intent to deceive.
While there’s no silver bullet for this problem, there are measures local businesses and groups can take to prevent embezzlement.
Consistent oversight, strong internal controls and division of financial duties are key recommendations from experts.
Bret Hodgdon, a partner at Davis & Hodgdon Associates CPAs, in Williston, is a certified fraud examiner in Vermont. In his work, Hodgdon often finds a need for better financial controls and segregation of duties.
Some nonprofit clients, he said, are satisfied with just the executive director having check-signing authority. However, he encourages nonprofit boards to maintain oversight on the check stock as well, to guard against issues like signatures being forged.
“If you can control the check stock and you manage who has access (to it), then you can prevent the forgery as well,” Hodgdon said.
For small businesses and groups in Vermont, he added, splitting up duties can seem challenging, with few employees and tight budgets. However, adding an additional control can be as simple as getting a development person to open the mail and get images of checks coming in. This requires some cross-training, but not a huge amount.
“I think people overestimate what an internal control needs to be,” Hodgdon said.
For the full article please visit: http://www.businessvermont.com/experts-controls-can-stop-embezzlement/
Bret Hodgdon, CPA, CFP®, CFE, CGMA, Davis & Hodgdon Associates CPAs