YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2000-61
July 27, 2000

The following areas of concern were discovered as a result of a special review conducted by our office of the Missouri Southern State College Vendor Refunds and Payments.

According to college officials, in December 1999 the internal auditor at Missouri Southern State College discovered a discrepancy in a transaction initiated by the accounts payable clerk.� Subsequent review by the internal auditor and the Missouri State Auditor�s Office noted additional discrepancies and identified a misappropriation of at least $22,190 between March 1, 1999 and December 31, 1999.

Between March 1999 and December 1999, thirty-one checks totaling $21,785 made payable to Missouri Southern State College or college checks payable to college vendors were deposited into a bank account of a local association of which the accounts payable clerk� served as treasurer.� In December 1999, the college became aware of some of these discrepancies and this clerk subsequently reimbursed the college $1,560 with a check from the association�s bank account, and $1,995 with a cashiers check purchased from her personal bank account.� An additional $331 also appears to have been reimbursed to the college in April 1999 with a money order.� It is not clear what the source of funds for the purchase of this money order is.� In addition, a Missouri Southern State College check for $405 was used to pay the accounts payable clerk�s personal credit card bill.� As a result, $18,304 ($21,785 less $1,560, $1,995, and $331 plus $405) is still due to the college.

Twenty-four of the thirty-one checks totaling $13,332 represent refunds from vendors to Missouri Southern State College for returned merchandise or overpayments.� Five checks totaling $6,458 were Missouri Southern State College checks made payable to college vendors.� The remaining two checks totaling $2,195 were Missouri Southern State College checks made payable to the association based upon invoices of which $1,995 was fictitious.� These invoices appeared to be copies of valid invoices from the association that had been altered.

While the majority of the checks were not made payable to the association, they were still deposited into the association�s bank account.� Several of these checks contained no endorsement; however, six checks were endorsed� with a stamped endorsement reading, �Missouri Southern State College, Pay To The Order Of�.

In one instance, a vendor file name in Missouri Southern State College�s computer system appears to have been changed, prior to the check being printed so the check would be made payable to the association, of which the accounts payable clerk served as treasurer.� Subsequent to the check being printed, the vendor file name appears to have been changed back which helped to conceal the misappropriation.� A representative from the local association into whose bank account these checks were deposited indicated the association was unaware of this matter until December 1999.� The association then contacted the college concerning this matter.� They also indicated the misappropriated funds from Missouri Southern State College are no longer in the association�s bank account.

In addition to the checks noted above, irregularities may have occurred with other checks written to or from the college.� Along with the college, we are continuing our efforts to review certain disbursement records and will notify appropriate legal authorities of any additional misappropriated funds.

Rhonda Branham became an employee of Missouri Southern State College in May 1990.� She became the accounts payable clerk in October 1997 and resigned in December 1999.� As accounts payable clerk she was responsible for preparing invoices for payment, entering disbursement information into the computer system, and although not authorized to do so, received refunds from vendors.� The local association to whose account the college�s checks were deposited, indicated she served as treasurer from July 1996 until December 1999.

Information regarding this misappropriation has been turned over to the Jasper County Prosecuting Attorney and the city of Joplin Police Department.

The college has also identified unauthorized transactions totaling $1,284 which appear to have been initiated by the former accounts payable clerk and paid for with Missouri Southern State College funds.� These transactions include purchasing supplies and equipment for personal use and establishing two unauthorized cellular phone accounts.

Complete Audit Report