Wednesday, April 18, 2012

Justice for Fraud Victims

Assistant Professor of Accounting Kevin Dow describes himself as "simply a dealmaker, putting particular people together to create this service-learning project."  Professor Dow also stresses that the UAA project is a replication project, modeled after a program developed by Dr. Sara Melendy at Gonzaga University.  The official pilot of the project was fall semester, and spring semester continued the pilot.  Fall 2012 will see a full Justice for Fraud Victims program instituted.

The project is a partnership, involving law enforcement agencies and the local chapter of the Association of Certified Fraud Examiners (ACFE).  Dow says it's an opportunity for students "to experience forensic accounting in a unique and exciting way while simultaneously providing a valuable service to the community."  He raised $18,000 to purchase computers, printers, software, office supplies, etc.  It was important to be independent of the College of Business & Public Policy and to have a "wall" between the two for protocols and security procedures.

According to Dow, between 5 and 7 percent of all firms' proceeds are lost to some kind of fraud, and entry level fraud examiner reports cost upwards of $30,000.  A "victim" comes to the program through Certified Fraud Examiners or the police - they can't afford the professional audit and are willing to share details with the students.  An example from the spring semester's work is a $2,000 fraud from a local non-profit with a total operating budget of $6,000.  A team of students work on the case under the supervision of a CFE, and the CFE signs off on the final report.  The CFE is a buffer between the students and the Court, and the students have no exposure on the case.  Their goals are to increase the number of cases being investigated and prosecuted and to increase awareness in the community, possibly decreasing the occurrence of fraud.
The Team:  Detective Michele Logan, Law Enforcement Liaison, Anchorage Police Department; Pat Berry, CFE Liaison, Vice President & Chief Audit Executive, Credit Union 1; Kevin Dow, JFVP Program Director, UAA; Soren Orley, JFVP Faculty Coordinator, UAA; Minnie Yen, Computer Forensics, UAA.  Dow points out that Pat Berry is one of only 23 Certified Fraud Examiners in the state of Alaska - 17 when accounting for those employed by the IRA and FBI.  There is a need for CFEs in Alaska, and students are being trained to go into these careers.  Dow says that this program can make a difference and remedy the shortage over time.

Forensic accounting applies the use of audit and consulting techniques to a legal question; the training is invaluable to future accountants.  Students are gaining experience in conducting victim interviews, preparing workpapers and a final work product, drafting a report with recommendations, and providing a formal presentation of the findings to local anti-fraud professionals.  Dow observes that the training not only enhances oral and written presentation skills but also trains students in how to treat people.  "The last final report went through eight drafts," Dow said.  "Students have to reflect their way through it to create a professional work product, taking out their opinions and reactions, which is difficult for them."

Students who want to be a part of JFVP have to be senior accounting students and must go through an application process.  They should have a serious interest in forensic accounting, be willing to meet the time commitment, and demonstrate a reasonable level of writing proficiency.  For the accounting students, the work of a semester gives them four months of work experience that they can put toward the two years required to be certified as a Fraud Examiner.  In addition, the Certified Fraud Examiners that volunteer as mentors to the students are able to get 10  continuing education credits for the semester to count toward their requirements for professional education.

A sideline of this project has been a presentation on Fraud Literacy & Awareness, developed for small businesses.  Two students at UAA developed the presentation and are available to speak in the community.  In addition, the MBA program has a capstone course in which one team is working on a business plan for jFVP.  Dow says, "The real world environment provides a unique setting in which students actually learn and apply these skills." Other universities across the U.S. are now interested, and Dow and Melendy from Gonzaga are writing a very large grant to get a national Justice for Fraud Victims project going!