Receipt Fraud: Would Andy Griffith Steal?

Andy Griffith Steal

In this article we take a look at receipt fraud.ย 

Would Andy Griffith steal? Maybe not. But other law officers do. Thankfully, most don’t.

The Theft: Receipt Fraud

If you’ve watched Andy Griffith as much as I have, you may find it hard to believe a (small town) officer would steal–but it happens.

Receipt fraud

A friend of mine (we’ll call him John) audits a small Georgia city (this is a true story).ย One year he was reviewing the planning analytics for the audit, reviewing five years of comparative data. In scanning the comparisons, he noticed the police fines had fallen off significantly. So John asked the police chief why the fines were down.

The police chief (we’ll call him Robert) responded, “I took it.”

John laughed and said, “I’m serious, why do you think the fine revenue dropped?”

“I said I took it.”

John was stunned. It was hard for him to absorb what he was hearing. After all, fraudsters don’t generally confess on the spot–but this one did. And the chief was well-known and well-liked, a man known for his integrity.

The discussion continued as John inquired about how the chief took the money. Here’s the deal.

Robert had two receipt books, one for cash and one for checks. When checks were received, he would write a receipt from the checks receipt book–those funds were turned over to the city clerk. When cash was received, he wrote receipts from the cash receipts book–those monies went into his pocket. Simple, but effective, as he stole over $50,000.

The Internal Control Weakness

So, what control weakness allowed this receipt fraud?

No one was controlling the issuance of the city receipt books. Also, the city clerk should have noticed the lack of cash payments being received for fines.

Correcting the Receipt Fraud Weakness

How can we remedy this receipt fraud problem?

When governments use physical receipt books, assign the duty of purchasing and issuing receipt books to a particular person. He or she should maintain a log of the receipt books and who has each one.

Surprise audits of those receiving funds is another way to combat theft. These reviews can be performed by the governmentโ€™s internal audit staff or by an outside CPA or Certified Fraud Examiner.

White-collar crime is real, so stay vigilant. (Even so, I still canโ€™t believe the real Andy Griffith would steal.)

Learn from my CPA Hall Talk newsletter!

Get my free accounting and auditing digest with the latest content.

Powered by Kit

5 Comments

  1. Chuck, yes, the drug buy money that is given to officers is impossible to monitor. No way to audit such a system. You can bet theft occurs there.

  2. In the audits of small cities in California, it is often the case that the court fees, meter collections, and fines are not auditable and the forfeited and seized property are a nightmare, and what about those funds set aside to buy stolen property, or bait criminals, fund undercover activities those funds are mostly cash and under no control

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.