Professor Elam

Thursday Dec 18, 2014

Michael Dennehy embezzled $1.7 million form Bexar Waste from 2008 to 2014. As an accounts payable clerk he wrote himnself checks and deposited them to personal accounts.  A stamp forged the proper signature and names were changed for payeesin Quick Books. 

Bexar Waste is garbage collection service based in Schertz.  In my opinon the firm is in need of

improved internal controls

a serious outside auditor who would at least perform a review of the books

What other simple methods could have prevented an ongoing fraud like this?

After osting this news item early this morning I received, no surprise, this via my Interna Audit Membership.

PCAOB to detail internal control audit checklist. The PCAOB is still dissatisfied with the quality of many audits it inspects. While Bexar Waste is a small privately held company, that story highlights the importance of internal controls. 

As I have thought the Bexar Waste case over, it occurs to me that whoever was in charge must not have  known the company very well. If your accounts went missing $1.7 Million over five years, would you notice, that is 340K a year!  I would think that is a significant number in a firm that size.