Goodworks Non-Profit: Case Study

You are the new Director of Development in Goodworks non-profit. You are currently reviewing the internal controls over donations that are sent directly to Goodworks in the form of checks. Your review reveals that the checks are promptly endorsed "For Deposit Only, "but no list of the checks is prepared by the person opening the mail. The mail is opened either by the mailroom employee or by the employee who maintains the accounts receivable records. Mail receipts are deposited in the bank weekly by the manager of Accounts Receivable. Discuss the weaknesses in internal control and your recommendations for improving the system.
Remember to provide additional information to the discussion that would be informative; elaborate and expand on previous
documentation is the only formidable practice that is truly acceptable. With this practice, fraud or input errors are bound to occur, by human error or fraudulent means to attain financial gain. Let’s remember that nearly a decade in previous, fraudulent reporting previously occurred in multiple public companies such as WorldCom and Enron. Now lets also consider that often times management will not see certain practices, whereas an auditor may (Chao, 2012). Goodworks practices seem to neglect the proper effective internal control or demonstrate a rather slow pace of internal control development, when they most certainly do have the abilities to control internal practices. These impeding issues were plentiful, therefore the United States government developed the Sarbanes Oxley Act of 2002 that we have previously
This individual was the director of IT at Aultman Hospital in Canton, Ohio. The gentleman actually set up companies that he was the beneficiary of and awarded contracts to said companies for IT support. Ironically, he was the individual that was in charge of authorizing the payments to these companies. Aultman Hospital’s internal controls were unable to see that this was occurring because the internal controls lacked a checks and balance system. Ironically this occurred for many years and approximately $846,877 dollars were being paid out for services not rendered (Balint, 2014). The gentleman even billed for certain IT related services that were performed, unfortunately these services were at an exaggerated cost. Had Aultman not been so financially secure and properly insured, they may have faltered. Often times when issues arise such as this change occurs. In Balint's article Mullen expressed that,” New safeguards have been put in place in light of the fraud case, Mullen said, “A person in a trusted position who has no prior indication of problems can create challenges for any organization,” he wrote. “We have revised controls and procedures for an even more extensive verification of vendor activities. Our processes were strong before; now they are even stronger” (Balint, 2014).

Balint, E. (2014, August 06). Former Aultman employee sentenced in fraud case. Retrieved March 28,