Montana Hosts Internal Controls Enforcement Seminar with Ralph Summerford

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GUEST BLOGGER

Scott Patterson
ACFE Media Relations Specialist

Montana state officials recognize the threat that fraud poses to any government organization, and the responsibility that rests upon managers to help prevent and detect it. During International Fraud Awareness Week, Montana’s Department of Administration, Risk Management & Tort Defense Division hosted a four-hour seminar on fraud prevention awareness for managers.

The seminar was presented by Ralph Q. Summerford, CFE, CPA/ABV, CFF, CIRA , a distinguished fraud expert and the ACFE’s Cressey Award winner for 2010. Summerford is president of Forensic/Strategic Solutions, PC, and an ACFE faculty member, where he is a regular speaker and instructor at programs across the United States and abroad.

The seminar addressed a key dilemma: While many organizations have basic internal controls to limit the risk of fraud, managers do not always understand or enforce them. The apparent "disconnect" between the presence of internal controls and management's shortcomings in enforcing them must be addressed through training and education.

More than 400 managers participated in Helena and remotely from other parts of Montana. The slides from the presentation are available for download here.

A portion of the seminar addressed corruption, and bidding and billing schemes. Summerford included a rundown of the major red flags for fraud in the bidding process:

  • Complaints from employees or other vendors
  • Bid prices drop when a new bidder submits a bid
  • Qualified contractors refrain from bidding
  • Geographical or rotational pattern to winning bidders
  • Different bidders make same mathematical or spelling errors
  • Bidders frequently change prices by comparable amounts at about same time
  • Competitors regularly socialize, hold meetings, visit each others’ offices, travel together
  • Statements acknowledging territories, such as, “we do not bid in ‘X’ county”
  • Winning vendor always last to bid
  • New vendors receive disproportionate number of winning bids

The presentation ends with an apt quote from Mark Twain: “I trust everybody - but I always want to cut the cards!” Once again, thank you to Summerford, the State of Montana and all of the Official Supporters of International Fraud Awareness Week.