Would Microsoft Dynamics GP Have Stopped a Connecticut Man Who Embezzled $300k?

According to a New Haven Register article a man in Connecticut was sentenced to almost three years in prison after being convicted for embezzling over $300,000 from his place of employment. The man reportedly used the company's accounting software to swindle it out of money, and the incident raises a valid question. Could a company running Microsoft Dynamics GP have prevented such an incident? 

First, it is important to know the facts. The man, William Lavimoniere of Plainfield, CT worked as the chief financial officer for Project Genesis, Inc, a Willimantic, CT based non-profit. Over the course of three years, he was accused of manipulating the company's accounting software so that employees who had been terminated would remain on payroll. Any money paid to those employees was then funneled to the man's personal accounts. The U.S. District Court in Hartford sentenced the man to 33 months in prison. 

If the company had used Microsoft Dynamics GP, could the man still have managed to pull off his scheme? Possibly, but there are some ways to prevent this type of corruption. 

As with any business misconduct, it is ultimately a flaw in the people working for the organization rather than in the software. Our guess is that this person changed the terminated employee’s direct deposit account to his own.  The bank would typically verify the name in the file to the name on the account.  But we have seen that the person processing the payroll is also the person who approves those exceptions. Microsoft Dynamics GP would not know the terminated employee is terminated if the payroll person did not terminate them in the system. 

The first important task would therefore be to make sure there are checks and balances in place using internal controls. Using role-tailored modules in Dynamics GP for a company's departments, you can isolate tasks like removing employees from a system and handling payroll. Any discrepancies during routine security audits should set off red flags. Then email alerts can be set up to notify higher level managers to investigate the discrepancies.

When we do a Dynamics GP implementation CAL Business Solutions can review internal controls and make the principals of the organization aware of possible issues.  We can provide regular Connecticut based Microsoft Dynamics GP training and annual audits to make sure those controls have not been changed. Connecticut non-Profit agencies using Microsoft Dynamics GP need to be especially vigilant about these kinds of audits. 

There is no foolproof way to prevent employee corruption. A company must be diligent about compliance and have safeguards in place to prevent it or quickly mitigate its effects. With a good implementation of Microsoft Dynamics GP, that task should be considerably easier. 

By Anya Ciecierski, CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner