Tallahassee Bean Counters Case Harvard Case Solution & Analysis

Tallahassee Bean Counters Case Case Study Solution

Findings of the Case

Evidently, Ben Bill had been enjoying the overlapping authority or position within the Tallahassee Bean Counters when it came to handling purchase orders, selecting the vendors as well as making payments to the vendors. He had an access to all of these actions due to which it was very easy for him to use his position for conducting fraudulent activities or practices.

The findings of the case are as follows:

• The Tallahassee Bean Counters had not established the overall control environment in order to detect, prevent as well as deter the fraudulent practices or activities, which included reporting of financial terms.
• Fictitious or ghost employees had been receiving the salaries without the authorities even having a hint of ghost employees being registered as employees.
• The revenue generated from ticket sales were very contrary to the documented sales recording.
• The transaction of the bank deposits were not verified properly
• The inventory in the financial records of Tallahassee Bean Counters were subjected to the fraudulent alteration.

Recommendation

The party responsible for monitoring the routine functioning of the office has fallen victim of fraudulent activities or practices. TBC has suffered from severe financial loss because of the fraud done by Ben Bill, there fore TBC should contemplate to defy the party involved in such misleading activities, Ben Bill. It is recommended that TBC should file a lawsuit on the Ben on all of the revenues loss incurred because of Ben as well as for the falsification of the payrolls and unethical collection of salaries by him.

One of the largest expenses in any corporation is the payroll, due to which an internal payroll policy should establish internal check and control in order to protect and control the expenses. It would minimize the likelihood of fraud and the incidence of errors. The payroll procedures should be put in place in order to create efficiencies in terms of document processing, time collection, payment & record keeping as well as data entry. Also, embedding advances and automation in the system technology would result in cost-effective payroll procedures. Developing a transparent wage structure would explain the types of wages the employee might collect.  TBC should have a trustworthy manager or payroll specialist who would generate accurate payroll. Only the payroll specialist should have an access to the payroll processes and records. Inspecting the payroll records is critical to assure that everything is accurate. TBC should also have someone who should be entitled to audit the record on a periodic basis. Also, TBC should lock up the records of payroll so unauthorized people can’t have an access to them. The electronic data should be secured with a strong password. General IT control should be in place to define access to data, application and system. In addition, the auditor should conduct an audit of ghost employees. TBC should have someone recruited who would be liable to compare the payroll records regularly to employees’ personnel file and time card reports to monitor the discrepancies, such as: duplicate bank account, duplicate addresses, duplicate social security number and fake employees.

Other Suggestions

In addition to this, TBC should perform a risk assessment and it should perform its  operations under complete security.The risk statement would help in measuring the probabilities and chances of occurrence of any fraudulent event. It is recommended to TBC that it should implemented an anti-fraud internal control, which might reduce the chances of any fraudulent activity. The management of TBC should have a closer look over the transactions made, and try to reduce the risk as well. TBC should conduct internal as well as external control,which might provide some important information regarding misleading quotations in financials of TBC.  It should extensively follow the Generally Accepted Accounting Principles when reporting financials, which would be beneficial in reducing the risk of default or fraud. Most importantly; TBC should have an internal auditor who should provide an insight into the procedures, policies, and the culture of the organization and provide an aid to the management by substantiating internal controls, such as risk mitigation controls and operational effectiveness. The internal auditor should also conduct audits of the employees’ salaries on a periodic basis. The internal auditor should minimize the risk of failure and value TBC by performing consulting and assurance activities.The internal auditor should assess the mitigation processes and monitor the risk, detect frauds, offer objective assurance, add value and improve the operations of TBC. Also, the internal auditor should monitor and track the system and process that would likely keep TBC on track, and he should offer advices and consultations for continually improving procedures and system. For an internal auditor, the scope is broad within the organization and can include any of the following areas:

1. Risk management activities.
2. Controls that the management of the organization have in place.
3. Effectiveness and efficiency of the operations.
4. Management and financial reporting reliability.
5. Compliance with local regulations.
6. Proactive assessment of frauds.

Conclusion

Tallahassee Bean Counters is one of the minor league baseball teams in Tallahassee, Florida. The primary source of the revenue generation for the team comes from selling the tickets, charged parking lots, promotional fundraising, programs and concessions. Ben Bill has been enjoying the overlapping authority or position within Tallahassee Bean Counters when it came to handling the purchase orders, selecting the vendors as well as paying the vendors. He was in full control of monitoring and carrying out these activities due to which it had become very easy for him to temper the financial statements and expenditure records in order to conduct fraudulent activities.Tallahassee Bean Counters did not establish an overall control system in order to detect, prevent as well as deter the fraudulent practices or activities, which includes the reporting of financial terms. The inventory in the financial records of Tallahassee Bean Counters has been subjected to the misleading and altered quotations and calculations. It is recommended that TBC should ask for the lost revenues and file a lawsuit against Ben Bill by taking his active involvement in the fraudulent activities or practices under consideration. TBC should  implement an anti-fraud internal control, which might reduce the chance of fraudulent activities and prevent them from happening again…………..

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