Skillz, who has been in prison since 2006, had his 24-year sentence reduced today by 10 years by virtue of a "court-ordered reduction and a separate agreement with prosecutors." This has been an ongoing battle ever since JS appealed his sentence and it was vacated in 2009 because "a sentencing guideline was improperly applied." Persistence pays off! [AP, Earlier, Earlier]
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Happy (Belated) First Anniversary Satyam Fraud!
Technically it was last week but dang, it’s been a helluva year for Satyam and PwC.
Two auditors in jail, the PwC Chairman resigned, Jim Quigely couldn’t wait to tell everyone that Deloitte was the new auditor and P. Dubs would really, really be stoked if everyone just forgot the whole thing ever happened.
Despite the non-existent coverage in the U.S., our contributor Francine McKenna has covered this story from the beginning so we got her thoughts:
What do we know about the scandal one year later – its causes and how to prevent similar frauds in the future? Not much. The experts we should look to for answers, Satyam’s auditors Price Waterhouse India, are accused of being complicit and are still in jail. Who’s guarding the guardians? We’ll have to wait for the shareholders’ lawsuits and the SEC here in the US to hear what really happened, who all benefitted, and who is ultimately responsible.
Judging by the pace of things, we’re guessing the lawsuits won’t be resolved in our lifetime. While we are around however, we’ll keep you updated on what does happen whether it’s reasonable requests from PwC to jailhouse brawls (please God).
GAO Audit Uncovers Fraud at Head Start Programs
The Head Start Program, under the Department of Health and Human Services, provides child development services to mostly low-income families and their children. Up to 10% of Head Start-enrolled families can be over-income, with an income 130% above the poverty line.
Of course, things don’t always work out as they are supposed to and the GAO has discovered problems with about half of the centers it examined through the investigation, just a small sample of the 1,600 nonprofit centers running 3,000 Head Start programs.
GAO received allegations of fraud and abuse involving two Head Start nonprofit grantees in the Midwest and Texas. Allegations include manipulating recorded income to make over-income applicants appear under-income, encouraging families to report that they were homeless when they were not, enrolling more than 10 percent of over-income children, and counting children as enrolled in more than one center at a time. GAO confirmed that one grantee operated several centers with more than 10 percent over-income students, and the other grantee manipulated enrollment data to over-report the number of children enrolled. GAO is still investigating the other allegations reported. Realizing that these fraud schemes could be perpetrated at other Head Start programs, GAO attempted to register fictitious children as part of 15 undercover test scenarios at centers in six states and the District of Columbia. In 8 instances staff at these centers fraudulently misrepresented information, including disregarding part of the families’ income to register over-income children into under-income slots. The undercover tests revealed that 7 Head Start employees lied about applicants’ employment status or misrepresented their earnings.
GAO managing director for special investigations Gregory Kutz told a House education committee last month that “the system is vulnerable to fraud.” No kidding.
While unable to determine the motivation of Head Start employees to commit fraud by adjusting income levels on applications, Kutz theorized that management of nonprofit agencies receiving Head Start funds pressured staff to fudge, fiddle with, or straight up fake figures on applications in order to keep federal funds coming in.
Head Start has served over 25 million children since 1965 and there are currently over 1 million children enrolled in Head Start programs.
Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here.