1. Managing the Risk of Fraud in Higher Education
Robin Woods Stacey M. Walker
Internal Audit Director Internal Audit Director
Texas A&M System Auburn University

2. Topics What is fraud? Where does fraud occur?
What are the red flags of fraud?
What are the characteristics of a fraudster?
What can I do to help prevent fraud?

3. Fraud Occupational Fraud
A willful or deliberate act or failure to act with the intention of
obtaining an unauthorized benefit such as money or property, by
deception or other unethical means.
Occupational Fraud
The use of one’s occupation for personal enrichment through the
deliberate misuse or misapplication of the employing organization’s
resources or assets.

4. Examples of Fraud Use of purchasing card for personal use
False/duplicate travel claims
Misuse of university property or resources
Theft of funds or property
Fictitious (ghost) employees
Conflict of Interest

5. Where does fraud occur?
Source: Report to the Nations on Occupational Fraud and Abuse, Association of Certified Fraud Examiners

6. How is fraud discovered?
Source: Report to the Nations on Occupational Fraud and Abuse, Association of Certified Fraud Examiners

7. Why Do People Commit Fraud?
The Fraud Triangle
Source: Yellowbook-cpe.com

8. Red Flags of Fraud Behavioral Organizational Document
Living beyond your means
Financial issues
Close relationship with vendors
Not willing to share duties
No vacations or time away from office
Organizational
Poor “tone at the top”
High turnover
Lack of documented policies and procedures
Document
Missing documents
Altered documents
Unusual billing addresses
Employee and vendor addresses match

9. Characteristics of a Fraudster
Gender: _______
Age: _________________
Length of Time with Victim Organization: ______________
Degree Level: _______________
Criminal Background: ___________
Employment Background: _____________________
Source: Report to the Nations on Occupational Fraud and Abuse, Association of Certified Fraud Examiners

10. What Can You Do? Set good “Tone at the Top”
Increase perception of detection - Regular reviews (both internal and external)
Create good segregation of duties – no one should have total control of a process
Training
What are internal controls?
Who is responsible?
If you see something, say something!
Make sure employees know how/where to report

11. Questions?