This is why you never have one person responsible for finance without oversight. Who was reviewing budgets, checking the bank balance etc? How could one person make payments alone?
this post was submitted on 30 Dec 2023
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Isn't this why a lot of companies have essentially mandatory vacation for their accountants? Gives a baked in reason to have another set of eyes on the practices of the department.
A company large enough would have internal auditors so that would probably be unnecessary. But best practice is to have segregation of duties and layers of authority, so that no one person has too much power. (source, am an auditor)
In some countries/provinces it’s actually legally mandated. The idea is that if someone is committing fraud there will be a period where it isn’t committed, to help make the fraud discoverable. Those mandatory vacations are also often when audits happen, both internal and by government.
My corporate bank requires their management to take at least one two-week vacation a year so that any schemes they might have running fall apart.
I worked for a medical imaging company that got acquired many years ago. The CFO was a nice enough guy, with the perfect blonde wife, huge suburban house, matching Lexuses for him and missus, and his son was the handsome, curly-headed quarterback with the giant fancy pickup truck (that no teenager NEEDS unless they're the spawn of cattle ranchers...) at the best high school in the county.
But, as I said, we got acquired, and the new company sent over a junior-junior (ie, just out of school) accountant to do the boring duty of running the books. Poor kid tried and tried but he just couldn't get the numbers to add up, so he went to his boss and apologized for not being able to do his first assignment. Boss took a look, cocked an eye, patted the kid on the back for doing an excellent job, and took it to legal.
Seems the CFO was just writing himself $50,000 checks once a month to fuel his lifestyle and "nobody knew it". He ended up in the prison, divorced in a hot second, and his former wife and kid skedaddled out of town before the thing even went to trial.
FYI, it is not dead yet.
The paper has launched a fundraising effort that included the creation of a GoFundMe page. As of Friday afternoon — just one day after the paper announced its financial troubles — the GoFundMe had raised more than $11,000.
Now that the former employee suspected of embezzlement has been fired, “we have a lot of hope that this paper is going to come back and be self-sustaining and go forward,” he said.
How is 90k enough to kill a company? Payroll likely dwarfs that number. And creditors will usually work with you if there’s an issue like that and you can show them what happened and how it’s fixed.
While I have no idea of specifics, 90K missing plus 100K in debt to several places, including to the paper’s printer, might be the real issue. The debt stretches back months, and it's possible companies were threatening to stop doing business with the paper. If the printer cuts you off, you can't print the paper that would make up lost revenue. And it's going to be hard to get financing for a new printer when you have outstanding unpaid debt.
The paper also became aware of at least $100,000 in unpaid bills — including to the paper’s printer — stretching back several months
I feel like many of those vendors would be willing to setup payment plans or forgive some of the debt outright if the lapsed can prove they were victims of embezzlement (theft) and criminal negligence (not paying the bills of the company as the one responsible for such)
I’m sure many of my vendors would work with me, several of them I approve paying this entire debt amount to them monthly.
I feel like many of those vendors would be willing to setup payment plans or forgive some of the debt outright if the lapsed can prove they were victims of embezzlement (theft) and criminal negligence (not paying the bills of the company as the one responsible for such)
Many companies are not that cash rich, if that was most of their bank balance, and they have $100k debt, suppliers may refuse to any more service until debts have been repaid. Can't acquire what you need, can't produce what you need to sell to raise the cash, so you go under.
Maybe 90k is all they can prove at the moment, but it's really a larger number.
It also seems like something you'd have insurance for.
Eugene isn’t big, and paper is dying. They probably operated on a very tight budget.
That dude is fucked when he gets arrested and there’s just a super clear paper trail leading back.
I hope the paper manages to survive this, and maybe recoup some of the money lost through legal means. And I hope they can hire their staff back soon! I bet none of them would be against going back considering!
The clever part is that there is no paper trail: the printer hadn't been paid. 🤓
Disappointing! I read it quite regularly at my local coffee shop when I lived in Eugene. It wasn't the best journalism, to be sure, but it was quite good for a free paper!
My dad worked for a major bank. Sometimes when an employee stole money from the bank, it made the news. Other times, the bank kept quiet about it. You don't always hear about this stuff because the business is too embarrassed to make it public.
Greed, the one thing the left and right can unite on.