In a two (2) page response, describe internal controls that should have been in place at the Air Force to help prevent such fraud.
The U.S. General Accounting Office (GAO) Office of Special Investigations was responsible for investigating a potential purchase fraud case. The man who allegedly committed the fraud was Mark J. Krenik, a former civilian employee of the U.S. Air Force. Mr. Krenik was the Air Force's technical representative on contracts with Hughes STX. Hughes STX provided hardware, software maintenance, technical support, and training to the Air Force. Part of Mr. Krenik's alleged fraud included opening accounts under his control at banks in Maryland. The accounts were opened under the names Hughes STX and ST Systems Corporation. A section of the GAO report on this fraud investigation reads as follows:
On December 15, 1992, Mr. Krenik opened post office box 215 in Vienna, Virginia, in his own name. On December 24, 1992, Mr. Krenik delivered to the Air Force Finance Office 11 bogus invoices totaling $504,941.19. Accompanying the invoices were the respective DD‐250s, on which Mr. Krenik had falsely certified that work had been performed and deliveries made. Special instructions on the invoices directed that payments be remitted to ST Systems Corporation at the Vienna, Virginia post office box.
Mr. Krenik deposited the checks in the accounts he controlled at the Maryland banks. His fraud was unsuccessful because bank employees became suspicious when he tried to withdraw large sums from the accounts.
In a two (2) page response, describe internal controls that should have been in place at the Air Force to help prevent such fraud.
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