AP audit uncovers alleged ‘good faith’ embezzlement

Most instances of embezzlement are wilful efforts by the perpetrator to misappropriate funds for their own personal use. However, a case involving the office manager of a small teachers' credit union in Muskegon, Michigan, may be an exception, the Muskegon Chronicle reports.

A 2008 accounts payable audit revealed that Kenneth Richard Doctor had used more than $6,000 of Muskegon Teachers Credit Union funds to pay his property taxes and other personal expenses.

However, Doctor's attorney, Michael Walsh, claims that the company operated on an old-fashioned system that did not provide members with their own checkbooks. Instead, company checkbooks were used to make loans from credit union funds. Doctor used one of these to pay personal expenses and reimbursed the funds later. He claims he was honest with the board about the practice, but forgot about repaying some of the money until an AP audit identified the misappropriation.

Regardless of whether Doctor's story is true, a system of checks and balances would have prevented him from "borrowing" the money in the first place. Tightening payment protocols and carrying out regular internal AP audits can reduce opportunities for embezzlement. 

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