Overview of Case

Second Chance Homeless Shelter is a local overnight shelter for adult men and women operating as a not$-$for$-$profit $501($c$)(3)$ company. In April of $2011,$ the Director of the shelter, Allison Wright, discovered that the Administrative Assistant, Dean Brown, had forged her name on checks and used a purchase card to embezzle almost $$12,000$ from the shelter. Once the forensic investigation was completed, it was determined that Brown forged Wright's name on $26$ checks he made out to himself and on three other checks made out to K$-$Mart and Staples to pay bills for personal purchases he had put on the shelter's credit card. In total, Brown embezzled $$11,571$ between June $2010$ and April $2011$

Phase I: Case Background

On Friday, April $15$th$,2011,$ Allison Wright, the Director of Second Chance Homeless Shelter, opened the purchasing card $($often used by organizations to simplify the purchase process at frequently$-$visited stores$)$ bill and noticed that the bill had a higher balance than she expected. After reviewing the detailed statement, she noticed some unexpected purchases from K$-$Mart. She also saw that the purchases were charged to the card assigned to Dean Brown, the administrative assistant at Second Chance.

Allison and Dean had separate purchasing cards for the Second Chance account and each month two separate bills were received from the bank in one envelope, so it was easy to know what charges were made to each card. Allison and Dean used the cards to purchase office supplies, coffee, tea, sugar, towels, sheets, blankets, and other small items the shelter needed. Moreover, Allison did not remember sending Dean to K$-$Mart during the past several months.

Usually Allison reviewed the bills each month when she signed the checks for payment but occasionally she would sign the checks without reviewing the statement. With a cold feeling in her stomach, Allison went to the accounts payable file and pulled out the other purchase card statements. Sitting down behind the desk in her office, Allison started looking carefully at the purchase card statements from the past few months. She was relieved to see nothing else out of order in the statements.

Allison sat back and took a deep breath. Second Chance was a small homeless shelter with about $15$ full$-$ and part$-$time employees that took care of approximately $50$ individuals each night. The shelter operated as a $50$l$($c$)(3)$ not$-$for$-$profit and Allison had been the Director for the past eight years. She loved her job and she loved "her family": the employees and "residents" of the shelter. After a few minutes, Allison realized that she still had a problem with Dean for charges she found on the statement she opened earlier this morning, but he would be out of the center until the following Tuesday, so she had some time to think about what to say to him.

Allison relied on Dean to take care of the administration of the center. He had worked at Second Chance for eleven years. He sat at the front desk each day, greeting the "residents" as they came and went. He opened the mail, collected contributions, and prepared the bank deposit slips so Allison could make the bank deposits after work on Fridays. He kept the checkbook, although every check required Allison's signature. He recorded all of the financial transactions to the small$-$business general ledger system the shelter used, and prepared the monthly reports for Allison and the Shelter's Board of Directors. If he was not trustworthy $...$ Allison didn't even want to think about it$.$ But she had to think about it$.$ Allison got her key, unlocked the bottom drawer of Dean's desk, and removed the checkbook. Allison set the binder containing the checks for the shelter on Dean's desk and flipped it open.

Phase II: Discovery

Allison slowly turned the pages of the checkbook, carefully looking at the check stubs with Dean's handwriting on them. The shelter only used about $15$ checks each month for regular expenses so she was surprised to see more than ten check stubs marked "void" just in the past few months. She made a list of the check numbers for the checks marked "void" and went to the file cabinet where the bank statements.