Comm3 Company, a communications equipment manufacturer, recently fell victim to an embezzlement scheme masterminded by one of its employees. To understand the scheme, it is necessary to review CommS’s procedures for the purchase of services.

The purchasing agent is responsible for ordering services (such as repairs to a photocopy machine or office cleaning) after receiving a service requisition from an authorized manager. However, since no tangible goods are delivered, a receiving report is not prepared. When the Accounting Department receives an invoice billing Comm3 for a service call, the accounts payable clerk calls the manager who requested the service in order to verify that it was performed.

The embezzlement scheme involves Kim Mira, the manager of plant and facilities. Kim arranged for her uncle’s company. Gear Industrial Supply and Service, to be placed on Comm3’s approved vendor list. Kim did not disclose the family relationship.

On several occasions, Kim would submit a requisition for services to be provided by Gear Industrial Supply and Service. However, the service requested was really not needed, and it was never performed. Gear would bill Comm3 for the service and then split the cash payment with Kim.

Explain what changes should be made to Comm3’s procedures for ordering and paying for services in order to prevent such occurrences in the future.