WHO’s WHO IN THE GAAP ZOO

PCAOBPublic Company Accounting Oversight Board

Audit

Quality

Control

StandardsIndependence

Inspection

&

Enforcement

COSOInternal Control

measurement criteriaCommittee of Sponsoring

Organizations

SEC

FASB

Accounting Rules

GAAPState Oversight & Enforcement of CPA License

Writes & Scores CPA exam

In 1973, FASB replaced the AICPA as the developer of GAAP. AICPA

has input into new accounting rules and nominates FASB Board

members.

Federal Reserve U.S. Treasury

PCAOB is a nonprofit corp. established by congress through the Sarbanes-Oxley

Act of 2002. Congress gave SEC oversight of PCAOB’s rule making and

budget. SEC appoints board.

Widely Recognized

Industry Practice

AICPA Interpretations

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AICPA

OVERVIEW

GAAP – Generally Accepted Accounting Principals

Government Fraud

Government Finance Officers Association of Alabama (GFOAA) February 6, 2019

Rob Stuart, C-ECFESpecial Agent

Alabama Attorney General’s Office, Special Prosecutions Division

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TAKEAWAYS

Things are rarely as they appearTrust but verifyAsk questions

DocumentMake notes immediately after the interactionHave a witness with you

Audio recordingVideo recording

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Revenue to Remember . . . .

Little MoneySale of PermitsAdmission FeesRecords Fees

Easy MoneyGrant FundsReturned or Refunded GoodsOther Unbudgeted or Unexpected Income

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Alabama Zoo in Make-believe, Alabama

State of the Art Point of Sale System (POS)Print TicketsScanned for Entrance

Access regulated by turnstiles with ticket readersSecurity GuardsSecurity Cameras

Daily ReconciliationRevenue ReceivedTickets Printed Visitors Admitted

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Alabama Zoo in Make-believe, AlabamaZoo worker walks around selling petting zoo food for $1

per cup, cash only. Cash turned in to the Finance OfficeFood and cups obtained from Animal Care barnFinance doesn't know quantity of cups or food usedAnimal Care doesn’t know how much

money turned in to Finance. Worker sells 500 cups a day and keeps $250

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Case Study

Autauga County Commission Chairman

Chief - Autaugaville Fire Department

Manager – Autaugaville Water Dept.

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Invoice KickbacksElectrical Contractor

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ReceivablesPipe Billing

Cash LarcenyScrap Sale

Asset Requisition and TransfersCell Phones

Personal PurchasesMotorcycle, Credit Card

Purchasing and Receiving

Tractor

Invoice KickbacksElectrical Contractor

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ReceivablesPipe Billing

Cash LarcenyScrap Sale

Asset Requisition and TransfersCell Phones

Personal PurchasesMotorcycle, Credit Card

Purchasing and Receiving

Tractor

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Autaugaville Volunteer Fire DepartmentFunded primarily by 3mil county tax

Danny Chavers chief – appointed by City Council

Board became defunct

All business handled exclusively by Chavers by 2007Moved bank account

Fraud “blew up” when could not pay insurance

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Fire Department Checking Account

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o$240,675.04o8 Credit Card Companieso1 Finance Company for Motorcycle Paymento1 Utility Companyo1 Satellite TV Companyo1 Gas Credit Card

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Equipment Theft

Tractor - $2,019Water Department Purchased UsedRecovered from Chavers HomePainted and New Tires

Disc Harrow - $600Water Department Purchased UsedSold for Scrap 2 Months After Purchase

$284 Received by Chavers

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Water Line Funding

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Autauga County Commission $49,000

Autaugaville Water Department $49,000

Autaugaville Fire Department $49,000

Chavers Purchases

Autaugaville received ADECA grant to fund the water line

Generator Funding

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Autaugaville VFD approved for $4,800 grant

Autaugaville VFD submitted $3,599.99 generator invoice and check (not cleared) to granting agency

Autaugaville VFD submitted false $1,268.42 install invoice and check (not cleared) to granting agency

Autaugaville VFD received $4,800 check from granting agency

Autaugaville Water Department paid $3,599.99 for generator

FORGET THE ACCOUNTING

FOLLOW THE CASH

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QUESTIONS?

Rob StuartSpecial Agent

Alabama Attorney General’s Office501 Washington Avenue

P.O. Box 300152Montgomery, AL 36130-0152

rstuart@ago.state.al.us(334) 353-0421

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