University Whistleblower

Summary

Allegedly, between the dates of May 2007 and April 2010, two senior employees of York University, were responsible for laundering more than $1.23 million in funds from the university. They are both being brought up on charges of fraud and laundering proceeds of crime. Apparently, they did this by billing the university for goods and services it did not receive, and it excess of market value.

In order to be able to do this, there needed to be more than one person involved, also, policies and procedures that needed to be put in place to deter something like this from happening. If the two people involved had not been upper management, something could possibly have been done to prevent it, but with these positions, they were able to breach in some aspects the current procedures that were in place, that people in a lower position may not have been able to do. The other employees that knew what was going on were reluctant to report them for fear of losing their jobs because of not having a whistleblower policy in place, as an example.

The board members should have had a procedure in place to periodically (annually) re-evaluate the effectiveness of the governance, and by doing this also evaluate the overall effectiveness of the organizations risk management program, along with its key officials. Doing this, they may have got away with it once, but shouldn’t have been possible for 4 years. According to their governance structure, the president of the university is the person who has the power and control over most aspects of the affairs of the school. It states that the president has the power to establish committees to study and recommend action on different matters affecting the university. So either these committees weren’t performing their job up to standards, or they may not have had one to detect this type of fraud. There is no list of the committee’s involved, or if adjustments have been made in light of this recent event.

The internal control issues...