Detecting and Investigating Public Sector Accounting Frauds

DETECTING AND INVESTIGATING PUBLIC SECTOR ACCOUNTING FRAUDS

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Duration	3 Days
Course Style & Assessments	Highly Participative with 70% practical application and 30% theory coverage and Participants’ Practical tasks assessed through Presentations
Benefits	Practical skills and knowledge, stimulating, meals and refreshments, presentations, materials, certificate of attendance and Free two-months support service.

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SPECIAL SERVICES FOR OUR INTERNATIONAL DELEGATES In addition to the above listed benefits, the NIT Corporate Training and Events Management team will provide the following to our international delegates:

• Facilitation for entry Visas where required
• Transport from and to the International Airport on arrival and when going back
• Accommodation reservations
• Transport for shopping where needed
• Transport, accommodation and meals to tour one of our Namibia’s beautiful Destinations (Coastal Towns -Swakopmund and Walvis Bay OR Etosha National Park
• A Notepad/Tablet.

DETECTING AND INVESTIGATING PUBLIC SECTOR ACCOUNTING FRAUDS

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Introduction

This three-day course provides an intensive examination of public sector accounting frauds, including asset misappropriation schemes and financial statement frauds that are directed at central, and local (regional, town and village) governments as well as government agencies, ministries, boards and commissions. These frauds undermine public support for government and agency missions and reduce available resources to serve constituents, meaning the price of public sector accounting fraud goes far beyond funding losses – which are estimated in the billions.

This course is particularly focused on assessing fraud risks in the public sector; understanding common forms of accounting fraud in the public sector; evaluating the Auditor General and Anti-Corruption Commission’s recommendations on reducing public sector fraud and corruption; developing appropriate controls and fraud detection responses; methods for detecting and investigating public sector accounting frauds; and how to establish and maintain an effective anti-fraud environment.

Among other areas, the course examines fraud indicators, exposure, and management or administrative responses to fraud reports or incidents. Real-world examples covered in the course are drawn from exposed frauds worldwide including, among others, the entitlement fraud perpetrated using Public Fund programmes; customs duties frauds in different countries; investigations of South African police officials for corruption and executing building leases at far above market rates; allegations of widespread illicit payments to Chinese health officials by large pharmaceutical companies; defense contractors bribing government procurement officials and recovering bribes through marked-up invoices in the USA; sale and auction of Indian government-owned land and telecommunications bandwidth for prices below market value, etc. The program answers questions such as:

• Who commits public sector accounting fraud, and why?
• What are the red flags that might indicate an accounting fraud has occurred or is currently occurring?
• What are the most prevalent and costly public sector accounting frauds?
• How can public sector management or administration limit or reduce opportunities for accounting fraud to occur?
• What controls should be deployed in the public sector accounting environment?
• How is public sector accounting fraud investigated? By whom?

All the National Institute of Technology (NIT) training programmes have been developed by the industry experts to suit the needs of the industry and are aligned with the fundamental National Developmental Plans Goals of Namibia and those of all other SADC member countries thus effectively contributing towards the national and SADC regional economical, industrial and prosperity developments. Our course programs and delivery styles are very stimulating with practical based contents. They provide modern hands-on relevant skills and knowledge that empower all participants at all levels of every organization to practically apply the gained skills and knowledge in their respective duties without difficulties hence being productive, respected and valued by every employer and colleagues. Participants are assessed through group and/or individual tasks which involve presentations.

NIT provides 2 months Free Support service to all the participants to support them in implementing or using the skills and knowledge gained from any of our course programs.

DETECTING AND INVESTIGATING PUBLIC SECTOR ACCOUNTING FRAUDS

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Objectives

Upon completion of this workshop, participants will be able to;

• Understand common public sector fraud schemes that are carried out by employees, management, vendors, and others
• Become familiar with red flags which may indicate the presence of accounting fraud
• Know how to assess the effectiveness of risk management programs and internal controls
• Learn the investigative techniques and skills utilized in the investigation of public sector accounting fraud
• Gain a better understanding of how your government or agency is susceptible to accounting fraud and what your government or agency should do in response

DETECTING AND INVESTIGATING PUBLIC SECTOR ACCOUNTING FRAUDS

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Who Should Attend

The course is primarily aimed at the following Public Service Officials:

• Chief Governmental Financial Officers, Senior level Managers and Government Executives, and Government Accountants
• Inspectors General, Government Auditors, Government Investigative Agents, and Law Enforcement Representatives who investigate and/or Prosecute Accounting Fraud
• Chartered Accountants, Management Accountants, Internal Audit Personnel, and Finance Professionals
• Public Practitioners who provide Accounting, Audit, Forensic and Investigative Services
• Risk managers

DETECTING AND INVESTIGATING PUBLIC SECTOR ACCOUNTING FRAUDS

1.0 Introduction

• Characteristics and objectives of public sector governments and agencies, ministries, boards and commissions
• Prevalence of accounting fraud in regional and local governments
• Factors that increase opportunities for public sector accounting fraud
• Contrasting financial statement fraud and asset misappropriation fraud
• The role of controls and other deterrents
• Internal audit and other detection methodologies

2.0 Reports and Studies regarding Public Sector Accounting Fraud

• Auditor General’s Reports on Public Service Organisations including Government Ministries, Local (Regional, Town and Village) Government, Government Agencies etc.
• Anti-Corruption Commission (ACC)’s Reports on Corruption allegations involving Public Service Organisations including Government Ministries, Local (Regional, Town and Village) Government, Government Agencies etc.
• Association for Financial Professionals: Payments Fraud and Control Survey
• Association of Certified Fraud Examiners (ACFE) Report to the Nations
• Large accounting firm studies

3.0 Who commits Public Sector Accounting Fraud and why

• The face of fraud
• Personality and other traits
• The fraud triangle: incentives to commit fraud, opportunity, and rationalization
• Where fraud is most likely to occur in government organizations and agencies
• Managerial versus non-managerial personnel
• Fraud duration and loss statistics

4.0 Public Sector Accounting Frauds: asset misappropriation schemes

• Cash receipt, check tampering, and other liquid asset misappropriations
• Use of government assets for personal benefit
• Purchased product return schemes
• P-card and procurement/vendor fraud
• Override of controls and fraudulent transaction authorization
• Diversion of entitlement and grant funds
• Bribery, kickbacks, conflicts of interest, and corruption
• Ghost employees and ghost suppliers
• Customs and import duties frauds

5.0 Public sector accounting frauds: financial statement fraud schemes

• The relationship between asset misappropriations and fraudulent financial statements
• Acceleration or delay of expenses
• Fraudulent journal entries
• Pension calculations and disclosure

6.0 Fraud risk assessments

• Identifying fraud risk factors in governments and agencies
• Assessing the control environment
• Brainstorming sessions: internal and external auditors
• Significant accounts, transactions, and processes, including the financial statement closing process
• Preventive and detective controls
• Risks of management override and circumvention
• Testing and monitoring controls
• Internal responses to assessed fraud risks

7.0 Red Flags for Asset Misappropriation Fraud: what is often missing

• Weak control environment
• Segregation of duties/absence of mandatory vacation policy
• Invoice, contract, and supplier reviews
• Purchase order and bidding process reviews
• Benefit eligibility and termination reviews
• P-card usage reviews and procurement program controls
• Positive pay for checks
• IT system access reviews
• Access controls for physical assets
• Spot checks of identifying, address and other information
• Oversight of work hours and consulting engagements
• Travel and entertainment monitoring
• Tax filings compared to earnings
• Product origin, classification, and valuation reviews
• Employee behavioural changes
• Other red flags

8.0 Red flags for financial statement fraud

• Material deviations from past performance
• Deteriorating economic conditions
• Unusual, complex and related party transactions
• High management or employee turnover
• Decentralized management without monitoring
• Unauthorized or unusual IT system accesses
• Subsidiary ledgers that do not reconcile to control accounts
• Other red flags

9.0 Preventive and Detective Controls and Techniques

• Pre-employment screening
• Anti-fraud training
• Whistle-blower hotlines and rewards; encouraging tips by employees and vendors
• Establishing and using a strong internal audit team
• Surprise audits
• Mandatory vacation policies
• Preventive controls, including continuous transaction monitoring
• Inquiries within the organization
• Anti-Corruption Commission recommendations for reducing corruption
• Analysis of the financial statements and significant accounts using database modelling, real time transaction assessment, mathematical models and predictive software
• Trend analysis
• Analytics
• Exception reporting
• Tests of processes
• Document examination
• Auditing procedures
• Computer forensics
• Risk registers

10.0 How to create an Effective Anti-Fraud Environment

• Establishing and monitoring internal controls
• Disclosure controls
• Segregation of duties
• Preventive controls
• Use of internal audit function
• Referral of perpetrators to law enforcement
• Fraud education and awareness
• Fraud incident responses

11.0 Creating an ethical business culture

• “Tone at the top”
• Meaningful actions, not just words
• Creating a positive culture

METHODOLOGIES

• Live group instruction in a workshop format
• Review of fraud risk assessment programs, standards and guidance
• Extensive use of real-world public sector accounting frauds to illustrate who commits fraud, how it is committed, and how it is discovered
• High level of attention to individual participants
• Interactive participation is encouraged
• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

 

DETECTING AND INVESTIGATING PUBLIC SECTOR ACCOUNTING FRAUDS

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How to Register for this Training

To register, please complete the attached registration form and e-mail or fax it back with proof of payment to: The Conference Organizing Committee; contact Person: Mr. Frederick Chizu Simpungwe at:

1. E-mail:info@nit-edu.org
2. Fax No.: +264 886559294 & Cell: +264 81 3294977

We also have Conference Sponsorship and Exhibition Opportunities. If your organization is interested to sponsor or exhibit at this important conference, please contact the office on info@nit-edu.org

Please find attached herewith a registration form with rates and the conference draft program. If you need any further information, please feel free to contact the undersigned.