IntegrityStar UCF Compliance & Ethics Newsletter UCF Compliance & Ethics Newsletter

Questions to ask yourself – Part 1 – Approving Invoices

by Tina Maier, CPA, CFE, CIG, Associate Director University Audit

In this issue, I wanted to share some basic questions that you should ask yourself before approving payment of invoices from vendors and contractors or any other documents that cause cash to be disbursed. At some point we have all fallen victim to the rubber-stamping syndrome. We may have been pressed for time to complete our work tasks or there are so many invoices that approvals become perfunctory, or you have relied on others (unbeknownst to them) to review the information. We may have thought to ourselves that “I’m sure it’s fine because we have used this vendor before” or “I’m sure Mary-Jo looked over the invoices before giving them to me for approval.”

One case of misplaced reliance here at the university involved a supervisor admittingly rubber-stamping an employee’s fraudulent Pcard purchases amounting to thousands of dollars. The university submitted the case for criminal prosecution and was seeking restitution, but the State’s Attorney declined to prosecute because of the supervisor’s neglect of duty to properly review and authorize transactions. Rubber-stamping contributed to the university’s financial loss from fraud and also prevented the university from having the opportunity to re-coop its losses.

“Signatures without thought” significantly increase the likelihood of mistakes and make it easy for fraudsters to fool us. To help prevent fraud on your watch, please take a few moments to ask yourself these questions before putting your signature (digital or handwritten) or approval on any transaction:

  1. How well do I know this vendor or contractor? Do I have firsthand knowledge that they even exist?
  2. Do I know that they actually provided the goods or services identified in the invoice or other billing statement?
  3. Do I know that they are using the correct amounts for price (including unit prices used), sales tax, freight, and other variables that make up the amount invoiced?
  4. On what basis do I know that the prices are reasonable in the first place? What standard have I used in determining that the price charged is fair?
  5. How do I know that the quantities make sense? On what basis have we agreed to purchase the stated quantities?
  6. How do I know that the invoice and other documents are mathematically correct?
  7. Do I know that this invoice has not already been paid?