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The Southeastern Economic Development Corp.’s finance director, Dante Dayacap, “decided how much to pay himself and other SEDC employees, including the SEDC President” in bonuses and extra compensation, an audit of SEDC states.
For the five years reviewed by the auditors, President Carolyn Y. Smith received $228,068 in bonuses and extra compensation, excluding money she received for vacation or sick leave buyouts and car allowances, the audit states. Dayacap received $183,000 in such payments, it states.
Dayacap also approved all of Smith’s buyouts for vacation and sick leave, which amounted to $65,431 over the five years. Dayacap admitted to the auditors that he had no authority to do so, and the auditors concluded that he shouldn’t have been approving such payments.
From the audit:
At no point should management have junior personnel approve a request for reimbursement, because it places the employees in a precarious position in that they are less likely to deny the request for fear of retribution.
The audit states that at the minimum, compensation matters should’ve been approved by the board chairman.
The audit also makes a point about Smith’s claim that she has not taken a day off for sick leave or vacation because she enjoys her position.
A risk factor for fraud in any organization is presents when key employees work for many years without taking time off.