ACCOUNT 790 Fraud

Initial Discussion Questions for Responding to Fraud Suspicions/Allegations Discussion

In the case analyses, you have been analyzing New Day Products (NDP). Recall the details of the opening scenario in Case Analysis 2:

Jamie Davis, the administrative assistant to executive director Nancy John, stared at the letter from the IRS in shock and disbelief. The letter asserted that NDP owed over a million dollars in back payroll taxes with associated interest and penalties. While Jamie suspected something amiss with how Nancy managed the organization, she scarcely imagined things were this bad.

One of Nancy's rules was she was the only one allowed to open mail. However, this time, Nancy had taken a week in December off for the holidays. Early in the week, a certified letter requiring a signature arrived from the IRS. Jamie signed for the letter and, believing it was urgent, opened it so she could call Nancy to report on its contents. What she saw shocked her.

Jamie had no idea what to do but felt strongly that calling Nancy was not an option. She reached out to Joy Robbins, the current board chair. When Joy arrived, Jamie showed her the letter and shared misgivings about Nancys potential improprieties. Joy instructed Jamie to keep everything confidential until the board could form an action plan. Two of the four remaining board members were traveling that week. Consequently, a meeting would have to wait until the following week.

Joy contacted NDPs attorney, advising him of the situation. Nancy returned on Monday, unaware of the circumstances. That evening, the board discussed the IRS letter and decided to place Nancy on paid leave until further notice. The next day, Jamie and other key staff members began documenting questionable transactions. On Wednesday, they contacted the local police department to report the fraud. A report was filed, and the investigation commenced immediately after the holiday.

Over the next few weeks, rumors began circulating among the staff and clients that Nancy was being investigated for fraud. Concerns arose that NDP was in danger of dissolving. The local newspaper caught wind of the investigation and called Joy for comment. Joy admitted an investigation had begun but no one had been charged. Joy explained she was very concerned about the clients and the trauma a news story might trigger. She asked the paper to hold off reporting the story until more was known and until NDP had a plan to cope with the consequences. Surprisingly, the editors agreed to hold off for the time being.

Meanwhile, rumors continued to spread, as months passed. Staff and clients became increasingly agitated and angry. Some repeatedly called the newspaper and police to ask why they were not reporting the crime or investigating it more aggressively. The newspaper and police department requested that Joy ask the staff and clients to stop calling them. The board initiated a series of meetings with the staff, the clients, and their families. The board used the meetings to inform NDPs stakeholders and to help manage the resulting anger and stress. They brought in extra counselors and social workers, but things remained rocky for a long time until the investigation was concluded.

In your initial post, identify three (3) things you believe NDP could/should have done differently. You responses may be things that could/should have been done previously and/or during this stage of the scenario.

When grading your discussion posts, I consider the quality of your responses including evidence of critical thinking and consideration given to the questions as well as ability to tie in relevant points from readings and videos, ability to draw in evidence from experiences, and ability to tie together course concepts.