Archive for February, 2010

8
Feb/10
1

Focusing On Our Future: Investing In Our Children

Dealing with fraud and forensic matters, largely involving people stealing, lying, and ultimately ruining their life and the lives of their family, friends and employers, can make one take a dim view of the world and today’s state of society.  All too often individuals make decisions for self-promotion and enrichment, based solely on a heightened sense of entitlement, going well beyond blurring the line between right and wrong, regardless of their rationalization.

Unfortunately, younger generations have been exposed to the same lifestyles in society, where values, pride and ethics have become qualities of the past, replaced by the “get whatever I can at any cost” mentality.  Chivalry, manners and respect have joined the growing list of nearly extinct qualities as well.

While camping this past weekend I read a great article that addressed the issue of raising children, and things a parent could choose to do to instill values and social responsibility.  I strongly agree with the approach that the way we raise our children will be the only way we bring society back on track.  I don’t find myself overly religious, and I respect the individuality of choice when it comes to one’s religion, or no religion at all.  The article I read, while included in a Catholic publication, isn’t specific to any one faith, but rather identifies seven areas a parent can make a significant positive impact on their children and their future.

“Point One – a parent needs to choose to have dinner as a family as many days as possible.  Sitting and eating together has profound cultural and ethnic repercussions in children’s development and perception of what the home means to them.”

“Point Two – the choice to belong to a parish and practice the faith regularly has long-term positive effects.  Living out one’s faith as a family directly correlates with a child’s later sense of self-worth and ability to avoid drug abuse and teen pregnancy.”

“Point Three – a parent can make a big difference by choosing every night to review a child’s homework. Here, children learn they are a priority because you care about their work, achievements and struggles.”

“Point Four – a parent must demand that a child shares the truth of his or her day and relationships.  As the child grows and later faces the harder decisions adolescence and young adulthood bring, this truth-based trust will be a bond in the family.”

“Point Five – every year, a family needs to schedule a vacation away from home that makes the child’s recreation the priority.  What wonderful memories childhood vacations can make, no matter what the destination.”

“Point Six – in many cases, a child benefits when a parent activity helps him or her establish a balanced schedule that allows for a team sport, personal hobby or artistic or musical talent.  Developing these skills helps foster a healthier sense of self-worth that translates into greater achievements in life.”

Point Seven – a parent needs to choose to require social skills and proper manners of their child, in the house, at school and in life.  A child who is required to be accountable for his or her speech and actions will develop a great respect for others and learn to take responsibility for himself or herself in any situation.”

The entire can be found at:

“Making Hard Choices To Help Our Kids.  Father Michael F.X. Hinkley, The Catholic Transcript, February 2010.

Tags: , , , , ,

4
Feb/10
1

Still Writing Manual Checks? What pens do you use?

New schemes never cease to amaze me.  The resurgence of old schemes is even more interesting.

The Pilot Frixion pen series are marketed as erasable gel pens. Other pen makers may offer similar pens. For certain applications, these pens are great.  Make a mistake while writing, simply rub away the error, and re-write it correctly.

Accounting, finance and bookkeeping departments are not appropriate locations to be finding individuals using these pens. The reason is obvious – once a check or other important document is written, it can be easily changed subsequently, as the ink is erasable.  Hopefully I am writing the obvious.

However, even though I brought and tested these and similar pens, I failed to read the fine print, and also failed to identify that the same ink can be hidden (disappears) with temperature. The ink in these pens are heat sensitive.  As little as body heat can cause the ink to go transparent, removing all visible traces of the original writing.

How does this relate back to a significant risk within accounting?  An individual writes out a manual check using these pens. The check is presented to the authorized signer for signing.  Once signed, the check is warmed up (put into one’s pocket), leaving only the signature.  Then the check can be re-written or even typed out, replacing what was originally written manually. The signature is still valid, but the payee and amounts have been fraudulently changed.  What was a check to petty cash for $200 now reads payable to the individual for $5,200.

I also learned cold temperature brings the original ink back to visible status. Take the same check that was warmed up, and put it into the refrigerator.  The original ink comes right back.

To best protect yourself from becoming a victim of fraud or embezzlement, you should be aware of these types of products and risks, and watch for things like these pens, to ensure they never show up on your employee’s desks.

The best way to detect if such a scheme was being perpetrated would be to have the authorized signer review the bank statements and canceled check images each and every month, looking for any checks not familiar to the signer.  If your bank doesn’t return printed images of your canceled checks, request they do so.

Complacency will cost you in the end.

http://www.pilotpen-store.com/product_list.asp?SKW=PILFRIGEL&HDR=FriXion

Tags: , , , , , , , , , , ,

3
Feb/10
0

When $5,000 Doesn’t Really Mean $5,000

Automation and technology, in many regards, has improved our lives.  One area that continues to concern me on a daily basis is within the banking systems.

Finding material to write about isn’t usually an issue, as so many things happen to me personally with my own banking, all of which never ceases to surprise me.

What was today’s bank error – the misapplication of my payment.

I sent in a check for $5,000 to my credit card company (a major bank in Connecticut) in an attempt to get my balance under control.  I used a check from our savings account (has a check feature) to pay the funds, and I wrote the check information into the register.

I monitored my credit card account details on-line each day, and soon a payment was posted to my account.  The issue – the payment was for $500 (not $5,000).  Thinking a payment I had already scheduled for $500 was what I saw, I didn’t think much of it.  A day later I received a confirmation for the withdrawal of the $500 from our savings account.

I looked back at my register, and I had written $5,000.  I figured I wrote the check for $500, when I intended to write it for $5,000 (I don’t write checks of this size all too often, so perhaps subconsciously I couldn’t bring myself to write this one).  I contacted my bank and requested an image of the check I had written.  Checks no longer get returned to account holders, and tracking down images are getting harder as I learned.  Turns out my bank never received an image – only an electronic file with the withdrawal information in the file.

I had to next call the credit card issuer and have them track down the image of my check, to determine if I had written it for $500 or $5,000, another venture.  Turns out I did in fact write it for $5,000 (and not $500).  Their processor entered my check incorrectly.

No big deal?  Well, interest tolls on the unpaid balance of your credit card.  If I chose their solution to send in another check for the difference, I would pay interest on the unpaid balance for the period until they received my second check (because of their posting error).

Rather, I required them to reprocess my payment for the correct amount ($5,000) as of the day they received it, recalculate the interest in my account, and credit me the proper amount.

This is just another example of why you really need to monitor your banking and credit card activity on a daily basis, and stay on top of your accounts and balances.  Don’t become complacent and rely on the systems and procedures of the financial institutions to get things right.

Tags: , , , , , , , ,