Forensic Accounting Experts Support Higher Education Institutions

Helping to preserve your institutions’ resources and reputation

In American parlance, the phrase “It’s all academic anyway,” has come to mean a gratuitous mental exercise of no practical consequence. Your team is down 49 – 0 in the final minutes of the fourth quarter and you wonder what offensive adjustments they might make on the ensuing possession. It’s all academic anyway, because your team is destined to lose. But imagine a mental exercise that concerns the commission of fraud. And not just any fraud, but fraud against an institution of higher learning. You could say the theft is “all academic,” but it’s certainly not inconsequential. In fact, fraud against colleges and universities is a growing concern, threatening the integrity and very survival of revered institutions.

To protect your institution’s reputation and resources, you must guard against several types of fraud targeting admissions, financial aid, academic credentials, and institutional funds. Additionally, the rise of online education has amplified risks that include identity theft and cheating. Fortunately, the investigative experts at North American Forensic Accounting can help safeguard your institution from bad actors at all levels. Acts of fraud can seriously undermine the public trust in your institution and divert precious resources away from your students and faculty. NAFA can detect and deter a wide range of unethical and illegal activities, so you can strengthen your core mission of expanding human knowledge.

Common fraud schemes attacking academia

If you’re wondering where your college or university is vulnerable to fraud, the quick answer is “Everywhere.” Fraud is theft by deception, so wherever you hold assets of value, you can find fraudsters running scams. Let’s start with access to cash, where you can expect:

  • Financial aid fraud — Funds for higher education get siphoned off in various says, including:
    • Student identity fraud: Fake students or stolen identities used to obtain federal or state financial aid.
    • Collusion schemes: Real students working with outside parties or internal employees to inflate financial need or submit false documentation.
    • Ghost students: Enrolling fake students in online courses to collect aid, especially in for-profit institutions.
  • Research grant fraud — Money coming in to support myriad studies can get misdirected via:
    • Misappropriation: Using grant money for personal expenses or unrelated projects.
    • Falsifying results: Fabricating or manipulating research data to secure additional funding.
    • Double dipping: Charging multiple grants for the same expenses or time.
  • Procurement and vendor fraud — Your institution has expenses, which unscrupulous insiders can manipulate to enrich themselves with schemes involving:
    • Kickbacks: Employees directing contracts to vendors in exchange for personal benefits.
    • Fictitious vendors: Setting up fake vendors and approving payments to them.
    • Overbilling: Vendors charging more than agreed or billing for goods/services not delivered.
  • Payroll and time theft — Wherever employees are paid, there is a threat of theft:
    • Ghost employees: Listing non-existent staff on payroll.
    • Timecard manipulation: Employees claiming hours they didn’t work, especially in grant-funded projects.
    • Unauthorized stipends or bonuses: Inflated salaries or unauthorized compensation to certain faculty or staff.
  • Misuse of institutional funds — Employees who have direct access to funds do not always manage them with integrity. Thus, you might find:
    • P-Card (purchasing card) abuse: Using institutional credit cards for personal expenses.
    • Travel expense fraud: Inflated or fake travel reimbursements.
    • Misallocation of endowment funds: Diverting funds from restricted purposes to cover unrelated or operational expenses.

Turning to less tangible assets, you might find deception in academic processes, such as:

  • Admissions and enrollment fraud — Gaining entry to the institution in an underhanded manner, which might include:
    • Bribery in admissions: Paying for guaranteed admission
    • Falsified credentials: Applicants or internal staff submitting fake transcripts, test scores, or degrees.
    • Enrollment manipulation: Boosting enrollment numbers to secure more funding or grants.
  • Academic fraud — Credit without work can include:
    • Grade manipulation: Changing grades in exchange for bribes or favors.
    • Diploma milling: Awarding degrees with little or no academic work.
    • Plagiarism and ghostwriting: Faculty or students submitting work that isn’t their own, sometimes for pay.

Finally, there is the security of all the personally identifiable information your files hold. In the digital age, your institution is vulnerable to fraud via IT data breaches, which can include:

  • Unauthorized access and data sales: Hacking, then selling or misusing student data, research data, or intellectual property.
  • Credential stuffing: Using breached credentials to gain access to student accounts, financial info, etc.

These areas of vulnerability cannot be ignored. They threaten not just the fiscal health of your institution, but your reputation, which is your greatest asset.

Robust forensic services focused on detecting and deterring fraud

The experts at NAFA can play a vital role at institutions of higher education by helping to ensure financial integrity, transparency, and compliance. Here are some examples of the kind of support we can provide.

  • Fraud detection and mitigation — Our investigators can detect embezzlement, misappropriation of funds, or unethical financial practices. We can design internal controls and procedures to prevent future fraud. If you have been presented with allegations of misconduct, we can spearhead your investigation.
  • Grant and research fund oversight — Our NAFA team can verify that research grants and funding are being used according to the terms and conditions set by donors or government agencies. We can also detect any misuse or misallocation of restricted funds.
  • Audits and financial reviews — We conduct thorough reviews of financial statements, particularly when there are concerns about transparency or accuracy.
  • Litigation support — When misconduct calls for legal action, we provide a wide range of expert witness services. Importantly, we can assist in quantifying any economic damages in cases of fraud, breach of contract, or mismanagement.
  • Mergers, acquisitions, or collaborations — Our experts perform due diligence to analyze the financial health of another institution or partner before collaboration or acquisition.
  • Donor fund accountability — Institutions that rely on charitable contributions must be transparent and fully accountable to donors. We can scrutinize whether endowment funds, scholarships, and other donations are used according to donor intent. These efforts improve confidence in your financial stewardship among alumni and other donors.
  • Policy development and training — To support an ethical culture that does not tolerate fraud, our NAFA team works with clients to create guidelines for ethical financial conduct and reporting. We also educate staff and faculty on how to recognize and prevent misconduct.

Institutions of higher learning are a pillar of our society, but they don’t always reflect the best practices of a business. This is unfortunate, because the more ethical and financially effective an institution is, the more confidence the public has in it.

With NAFA guiding your efforts, fraud detection is never merely academic. We help you eliminate fraud, so your school’s finances remain strong and your reputation above reproach.

Contact North American Forensic Accounting to obtain support services tailored to higher education.

North American Forensic Accounting helps all kinds of businesses throughout the United States detect fraud and assess losses due to internal misconduct. NAFA serves clients from offices throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area. To learn more, call us at 347-286-4860 or contact us online to schedule an appointment.