Triangle Ball Club: A Forensic Analysis

Report
Triangle Ball
Club: A Forensic
Analysis
Daniel Simon
Justan Bristow
Jessica Greenberg
William Mosconi
Minor League Baseball
Overview
•
•
•
•
Promotes local community business
Focuses on both entertainment and sport aspects
Declining Industry
Revenues: Ticket Sales, Parking, Programs,
Concessions, Promotional Fundraising
Assignment
• We are CPA’s hired to audit the books of TBC
• Team owner Franklin Kennedy wants to investigate
the possibility of fraud
The Characters
• Phil Ackers
o President
o Liason with owner, fundraising and operations
o Was previously suspected of tax evasion
• Terri Hughes
o Assistant to Phil Ackers
o Worked with Phil previously
o Guards his office “like Fort Knox”
The Characters
• Ben Hill
o Office Manager
o Filed for bankruptcy four months ago
o Has many financial transaction-based responsibilities
• Candie Harris
o Secretary to Ben Hill
o Dislikes Ben
o Recently purchased a new motorcycle
The Characters
• Tucker Johnson
o General Manager
o Former ballplayer with seven kids
• Michelle Shelton
o Accounting clerk
o Her uncle is Tucker Johnson
o Works directly under Ben in all accounting responsibilities
Operations Overview
• Equipment Purchases
o Originate with Tucker Johnson
o Ben Hill chooses vendor
• Just chose new one that he is quite close with
o Reports and orders are checked and verified between Michelle
and Ben
• Concessions
o
o
o
o
Holly Hope
Cash-based
Money is counted by Michelle and Ben
Either Ben, Terri, or Phil deposit money
Operations Overview
Continued
• Parking
o 5 employees
o Cash-based
o Verifies cash with number of sold tickets
• Payroll
o Subcontracted to ADP Payroll Services
o Paid bi-monthly except game day employees
o Candie creates timesheet, Ben Hill verifies her numbers and sends
to ADP
Operations Overview
Continued
• Promotions (fundraising)
o Phil Ackers hosts promotional activities throughout Southeastern US
o Phil returns all trip expense receipts to Terri Hughes who verifies and
forwards receipts to Michelle
o Ben Hill deposits promotional receipts
• Ticket Sales
o
o
o
o
Three elderly women run the ticket booth
Only accept cash or checks
Ben and Myrna recount money and verify ticket log
At end of night, Ben is responsible for taking ticket log and cash back to
his office
First Glance Suspicions
• Ben Hill
Has too much autonomy- tyrant leader
No system of checks and balances
Is constantly the last person to handle cash
Relationships with Michelle and Candie raise
suspicions
o Over sees all day-to-day activities
o Over bearing boss
o
o
o
o
Concession Revenue
Tracking
Concession Revenue
Chechbook
2-Apr
$7,920.00
3-Apr
$9,360.00
4-Apr
$8,873.00
25-Apr
$5,739.00
26-Apr
$12,238.00
13-May
$9,720.00
14-May
$8,259.00
15-May
$13,595.00
6-Jun
$12,482.00
7-Jun
$13,171.00
8-Jun
$11,346.00
25-Jun
$7,569.00
26-Jun
$5,339.00
27-Jun
$9,772.00
10-Jul
$14,342.00
11-Jul
$12,602.00
$162,327.00
COGS
$10,465.00
$5,685.00
$13,130.00
$15,690.00
$7,625.00
$5,765.00
Rev
$7,920.00
$9,360.00
$8,873.00
$5,739.00
$12,238.00
$9,720.00
$8,259.00
$13,595.00
$12,482.00
$13,171.00
$11,346.00
$7,569.00
$5,339.00
$9,772.00
$14,342.00
$12,602.00
$162,327.00
HB
HD
$4.00
440
520
492
311
672
540
482
689
722
752
630
441
296
560
760
700
POP
$3.00
660
780
738
461
1024
810
725
1256
1108
1202
945
662
445
842
1140
1050
PN
$2.00
440
520
502
352
682
540
475
777
752
772
630
445
298
562
658
700
Soda
$2.00
330
390
380
204
512
405
362
548
544
571
473
332
224
421
782
525
Beer
$1.00
880
1040
987
752
1362
1080
982
1521
1322
1523
1265
885
592
1124
1802
1402
Cond
$4.00
440
520
485
312
682
540
375
725
589
587
630
345
296
479
800
700
$0.00
1000
1200
1300
0
0
1500
0
0
1500
1500
1500
1000
0
0
2000
0
Analysis
• Checkbook Deposit and Revenues add up
• We observed lack of information, however,
about concession purchases
o Total COGS is shown and cost breakdown is given, yet specific
quantities of purchased concessions are not given
o Without specific quantities of products purchased (all with
different profit margins), specific profit and revenue cannot be
accurately reported
Ticket Revenue
Tciket Revenue
2-Apr
3-Apr
4-Apr
25-Apr
26-Apr
13-May
14-May
15-May
6-Jun
7-Jun
8-Jun
25-Jun
26-Jun
27-Jun
10-Jul
11-Jul
$24,400.00
$28,200.00
$26,150.00
$15,850.00
$35,296.00
$28,850.00
$25,300.00
$38,652.00
$37,700.00
$40,088.20
$34,050.00
$23,900.00
$15,360.00
$29,600.00
$40,205.00
$36,049.00
$479,650.20
St Sold
Balc
$12.00
1800
2000
1800
1000
2358
1900
1700
2640
2500
2725
2400
1700
1000
2000
2650
2559
dis St
$7.00
400
600
650
550
1000
550
700
996
1100
775
750
500
480
800
975
763
Dis Bal
$9.60
0
0
0
0
0
200
0
0
0
194
0
0
0
0
150
0
Revenue
$5.60
0
0
0
0
0
50
0
0
0
18
0
0
0
0
25
0
$24,400.00
$28,200.00
$26,150.00
$15,850.00
$35,296.00
$28,850.00
$25,300.00
$38,652.00
$37,700.00
$40,088.20
$34,050.00
$23,900.00
$15,360.00
$29,600.00
$40,205.00
$36,049.00
$479,650.20
Ticket Revenue
Transaction Faults
• Ben controls the cash count at the end of the
games, submits the log, and deposits the money
• Revenues add up, however, there is no double
check as to tickets and it is all cash & checks
• Ticket sales have a very old-fashioned approach
Further Investigation
• Concessions- Analyze concession order
summaries to understand quantities of
purchased concessions
• Tickets- Implement a standard transaction
check.
o Have the President sign off on all sales at the end of each game
and/or series
Payroll Fraud
• While observing the payroll payments we found
discrepancies in the payroll invoices from ADP
• Salaried employees are paid directly into their bank
accounts, however, the temporary game day
employees are paid by check
• Game day employees are paid after each home
games series and the rest of employees are paid biweekly
Payroll Fraud
• Each employee’s time card is signed by his or her
supervisor and co-signed by the person in the front office
responsible for that division
• Ben and Candie are the only ones in the office
responsible for
verifying the numbers and names before they are sent
to ADP
• Ben and Michelle are the only people who verify the
payments after ADP sends them, which is done when
they
reimburse ADP
Payroll Fraud
• There are no problems with the direct deposits to
the office workers and baseball players
•
The ADP payroll invoice and Candie’s game day
employee timesheet do not reconcile
• In both sending and receiving from ADP Ben is the
only employee that is responsible for signing off on
the numbers
• There is no oversight for this process within the
company
Payroll Fraud
6-Apr
28-Apr
17-May
10-Jun
29-Jun
13-Jul
ADP Payroll Invoice
$1,648.50
$1,118.25
$1,680.50
$1,701.63
$1,705.75
$1,143.50
Candie's timesheet
$1,546.50
$938.25
$1,500.50
$1,518.63
$1,525.75
$963.50
$102.00
$180.00
$180.00
$183.01
$180.00
$180.00
Discrepency
Total Missing
$1,005.01
• We found a total of $1,005.01 of unaccounted
Payments to ADP for employees that do not exist
Conclusion
• There is a general lack of oversight throughout the
entire Triangle Ball Club
• Equipment and Concession purchases are done
without supervision and there are many
opportunities for fraud, Ben’s friend is the equipment
contractor
• Ticket sales are very old fashioned there is no sales
system and Ben and Myrna are the only ones
accountable for the cash at the end of the day
• While the payroll fraud is the only one we can
prove, the Triangle Ball club is filled with
opportunities

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