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July 2
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Universities unwittingly promote employee theft
Its a matter of simple economics. The basic cost and benefit structure at universities seems to promote constant stream of employee fraud, theft and embezzlement.
When frauds occur, they create work for the auditors and other administrators. Hence university embezzlement and theft can become little more than a source of employment security for the internal auditors.
Did anyone ask why the internal auditors had not identified the internal control weaknesses which permitted the thefts at Tufts to occur in the first place?
Universities should be putting much more emphasis on theft prevention.
The political structures at universities discourage auditors from aggressively questioning middle-level managers. At the same time auditors and administrators are rewarded for investigating these problems after they occur.
This situation could be reversed by altering the underlying organizational economics at universities, i.e. by reducing organizational barriers to fraud detection and prevention and by increasing the costs to non-participants actors when frauds do occur.
Shift the emphasis, and hold people accountable for prevention, and the problem of employee embezzlement and theft at our universities will be greatly diminished.
Ken D., at 12:10 pm EDT on July 2, 2008