Roslyn School District Case
1) The primary individuals involved the Roslyn fraud were former assistant superintendent for business and finance Pamela Gluckin and Former superintendent Frank Tassone. Also the former accounting clerk Debra Rigano was charged with the fraud too.
2) Frank A. Tassone; the former business manager, Pamela Gluckin; and an accounting clerk, Debra Rigano, who is a niece of Ms. Gluckin embezzled money in a scheme in which Dr. Tassone and Ms. Gluckin and nine of their family members and friends charged $5.9 million for personal items and cash advances on 74 personal credit cards. Then Ms. Gluckin and Dr. Tassone used district checks to pay those bills. The audit found that Dr. Tassone and Ms. Gluckin would obtain cash advances on their credit cards at A.T.M.'s. Ms. Gluckin, whose salary and benefits in her final year were $87,250, charged $559,176 in cash advances to the district over six years. Dr. Tassone, who received a salary of $230,000, charged $541,596 to the district in cash advances. Once the cash advances and the credit card charges - among them, for Tiffany and Tourneau jewelry, Coach leather accessories, carpet and furniture for him; and clothes from Nordstrom and Sears, electronic equipment, pet supplies and art and furniture for her - were executed, those amounts were submitted to the district, the audit said. To pay those bills, district checks were sent directly to the card issuers. The audit found that the district's financial software could be easily manipulated and had fraud controls that had never been activated. Using a legitimate vendor account number, the name of the check's recipient would be changed from a vendor of school supplies to the creditors. After the check was issued, the name of the payee would be changed back in the computer records to the legitimate vendor to conceal the fraudulent payment, according to the audit.
When a budget category came close to its limit, the audit said, school officials were able to shift funds among accounts. Dr. Tassone had been granted unlimited authority by the school board to make those transfers even though state education regulations required the board to set limits on the amounts that can be transferred without board approval, according to the audit.
No check warrants - lists of payments awaiting approval by the district's internal claims auditor - were maintained. In fact, the audit found, the claims were barely reviewed by that auditor. The extent of the review by the internal auditor, an acquaintance of Dr. Tassone who received $6,200 in unexplained payments from the district, consisted of thumbing through and initialing the vouchers, the audit said.
The district's treasurer, who is the custodian of all district funds, rarely attended board meetings and infrequently reported on the budget, the audit said. Although state law requires that a district's checks are to be signed by the treasurer, in Roslyn, the checks were signed by Dr. Tassone's secretary.
Dr. Tassone and Ms. Gluckin consolidated their control over the district's finances by installing clerks responsible for monitoring both accounts payable and accounts receivable. Standard accounting practice is to separate those duties to prevent fraud.
3) The red flags that was present in Roslyn organization that should have been identified are a) The Lack of oversight by the board of education and others. b) Significant or unusual transactions especially close to year end c) A lack of appropriate systems for approving or authorizing transactions d) Spending more than was appropriated for specific budget items and executed an unusually large number of budget changes, primarily due to the alleged theft occurring. The accounting firm never looked into this transactions. e) Weak internal controls that should have been investigated further example of this lack of supporting documentation for purchases, blank checks kept in an unlocked...
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