Page 29 - The Edge - Summer 2020

WINTER CONFERENCE

BY DON HARRIS
Scott Evans

Red Flags Should Alert School Officials of
Fraud or its Possibility

Schools may be vulnerable to fraud due mainly to a lack not enforced or monitored. Other factors could include a
of controls or too much trust, so AASBO members need to poor tone set by those in charge and placing too much trust

recognize the obvious red flags. in fellow employees.
In his keynote address at the Winter Conference earlier this
year, Scott Evans, Managing Director of Simon Consulting

in Phoenix, told AASBO members what causes red flags
and how to prevent fraud. Three elements can lead to fraud
– rationalization, pressure/motivation and opportunity. He
calls it the fraud triangle.

Rationalization covers the reasons why someone commits
fraud. For example, that person may feel they’re not
paid what they’re worth, they might take out revenge for
perceived poor treatment by the employer, a family member
is in need of medical assistance, or the person considers it
“only a loan.”

“Addiction, either gambling or drugs, causes a person to
steal,” Evans said.

External pressure can be the result of debt, greed or an
over-extended lifestyle. Again, medical needs of a family
member or an addiction can put external pressure on an
employee.

Internal pressure involves a need to perform better on the
job or to cover up poor performance, Evans said. “Maybe
the person has too much work to do,” he said.

Even with those conditions, the opportunity to steal must
be there. Evans said it’s like “leaving the barn door open.”

He asked AASBO members: “Is your organization creating
an opportunity for fraud?” He quickly assured school
workers that the opportunity for fraud is controllable.

A weakness in internal controls is often the obvious
problem in schools. Perhaps there are no controls or they’re
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