TAX BENEFITS AVAILABLE FOR CHILDCARE EXPENSES

Sarah McCraine, CPA

As parents excitedly plan for the arrival of a new addition, they may be in for a bit of a surprise when they calculate the cost of childcare. According to 2015 data from Child Care Aware of America, the cost of full-time infant childcare can take up as much as 15% of median family income. Currently there are two tax benefits that parents may consider using towards their childcare expenses.

The first is the Child Dependent Care Credit, […]

December 8, 2015 Accounting, Tax Read more...

Larry’s Laws of Larceny- Law 15: You can Drive a Mack Truck Through an Internal Control Hole

Larry Beebe, CPA

An organization must have excellent internal control systems to insure that its accounting records and financial statements are complete and accurate. An employee benefit plan has many internal control systems including cash receipts, cash disbursements, benefit payments, payroll and participant data. A person working at the plan who wants to steal only has to find a small flaw in the internal control system to steal. In no time, that small flaw in the internal control system becomes […]

December 1, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 14: Your Online Bank Statement may not be Adequate

Larry Beebe, CPA

Many organizations have gone paperless. As a part of going paperless, many organizations get bank statements online. The problem with an online bank statement is that the organization may shortcut the process by not getting copied of their cancelled checks.

A fraudster in an employee benefit plan was aware that the organization never saw copies of its cancelled checks. He was able to have checks drawn to dormant participants in a vacation plan. These were participants who had […]

November 24, 2015 Accounting, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 18: Two Signatures on a Check may be no Better Than one Posted on Decemb

Larry Beebe, CPA

Many organizations have a requirement that any check drawn for more than a certain amount must be signed by two people. The assumption is that two signatures are better than one. If each person signing the checks takes their responsibility seriously, and examines the supporting documentation for each check, then two signatures are better than one. The fictitious scenario in the next paragraph shows how two signatures could be worse than one.

Rotten Rodney has had it with […]

November 22, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 13: Collusion is Hard to Catch and to Prove

Larry Beebe, CPA

The American Heritage Dictionary defines collusion as “a secret agreement between two or more parties for a fraudulent, illegal, or deceitful purpose.” In an employee benefit fund, certain people in the organization have the responsibility of handling the income receipts of employer contributions. Other individuals are responsible for maintaining the accounting records of the plan. For example, an account receivable clerk is responsible for posting employer contributions to the accounting records.

When a person responsible for handling plan […]

November 17, 2015 Accounting, Audit, Forensic Accounting Read more...

HOW TO CHOOSE A TAX PREPARER

Glenn Bailey, CPA

If you need help with your tax returns, the best time to choose a preparer is before the end of the year. That way you have time to find someone with the appropriate skill level for your situation and time to get on their schedule. Having a preparer with advance knowledge and understanding of your life can make your tax return preparation more efficient for the preparer and less stressful for you. Waiting until March can leave […]

November 11, 2015 Accounting, Tax Read more...

Larry’s Laws of Larceny- Law 12: Petty Cash Sometimes Isn’t

Larry Beebe, CPA

How much time is the external auditor of the financial statements going to devote to the audit of petty cash? The auditor probably will not spend any time on petty cash because it is not a material item in the plan’s financial statements. Plan auditors spend most of their audit time in five major areas- investments, benefits, contributions, expenses, and participant data.

There is one exception. Transactions in petty cash can be indicators of fraud and, as such, […]

November 10, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 11: The Happy Homemaker Knows Nothing About Window Dressing

Larry Beebe, CPA

Window dressing as a technique used by investment advisers to make their investment portfolios look good at the end of an accounting period. The investment adviser accomplishes this by selling securities with large losses just before the accounting period end and replacing them with stocks where cost and market will be similar at the accounting period end. The adviser hopes that the losses will be absorbed in the clients gain and loss on sale of securities account […]

November 3, 2015 Accounting Read more...

Hiring a Payroll Audit Firm, Question 19: How can we Streamline our Payroll Audit Process?

Posting by Larry Beebe, CPA

A prospective firm should answer this question by stating it constantly considers how to streamline the audit process for its clients. Each year, trustees and the audit firm should review the previous year and discuss how the audit program can be more efficient in the year ahead.

A payroll audit program should not remain the same year after year. It should be constantly evolving program. A frank discussion annually about the strengths and weaknesses of the […]

October 29, 2015 Payroll Audit Read more...

PREVENTING NONPROFIT FRAUD

ISSUE
Nonprofits, like other businesses, are vulnerable to all categories of fraud, but there is general reluctance among nonprofits to prosecute employees due to fear of notoriety, fear of legal action, concern about personal safety and compassion for the offender. While nonprofits often devote their greatest attention to protecting cash and checking accounts, other assets such as inventory and contracts for services can be at risk for employee fraud abuse. Some conditions that may increase incidents of insider theft include […]

October 28, 2015 Accounting, Forensic Accounting Read more...