A grumpy former employee calls the Executive Director of audit to report misappropriation of funds by the financial operations supervisor. Tests of the work subsequently verify the allegations. The Executive Director of audit should proceed, with which of the following actions based on the above information?

Notify the local authorities implementing laws

confront the supervisor of financial operations with the allegations

report to the Treasurer and the Chief Financial Officer of suspected fraud

notified the insurance agency

Explain and discuss the appropriate action given the allegations of fraud verification