15 Feb Quality-Best, the company for which Christie Bowers works, manufactures and sells components for the aerospace industry. In her position as chief internal auditor, she has investig

Quality-Best, the company for which Christie Bowers works, manufactures and sells components for the aerospace industry. In her position as chief internal auditor, she has investigated several suspected frauds over the years and she was reviewing a new one. The current case began when a tip was submitted through an anonymous hotline. The tipster said that Johnnie Grant, an employee in the purchasing department, was receiving money from a supplier of Quality-Best.
Christie’s first step was to review the personnel structure of the purchasing department. Just as she suspected, Johnnie was the person in charge of ordering components for all manufacturing processes. She wasn’t surprised; Johnnie had been at Quality-Best for more than 20 years and had risen in the ranks to become supervisor.
Johnnie had three assistant buyers. Christie decided to interview these buyers before she interviewed Johnnie. The first buyer, Donna Malone, who was the most recent hire in the purchasing department, was rather quiet and seemed to answer questions in a straight-forward manner. The second buyer, Alan Fuentes, had been at Quality-Best for six years. He explained that each buyer had been assigned 10 unique parts to order. Each buyer was to purchase an adequate amount of high-quality parts that are used in the manufacturing processes. His supervisor, Johnnie, reviewed the purchases of these buyers and must sign off on the orders to indicate that he approved them.
The third buyer, Karen Rosen, has been at Quality-Best for 12 years. Portions of the interview with her follow.
After introducing herself, Christie proceeded to ask Karen about her work.
“I work here at Quality-Best in the internal audit department,” Christie said. It’s the one that usually does the analysis of whether to buy equipment around here. Today, I’ve been looking into the ordering function to determine whether it can be improved, so I’d like to talk with you about your position and what you and others in ordering department do. If you have any suggestions for improving its function, let me know.
Even after our chat, my door is always open, and I’d be interested in your views.
“First, please describe your duties here in the department.”
“I’d be happy to. I’m one of four buyers here at Quality-Best. Alan, Karen, and I are responsible for purchasing 10 different parts for various manufacturing processes. We have an approved vendor list that we use and can’t purchase from any company not on the list unless we ask for approval from Johnnie.”
“You mentioned four buyers. Who is the other one?”
“Oh, that would be Johnnie. A few years ago, he took on some of the parts I was handling and then, as new ones were added, he took responsibility for those, too.”
“How many unique parts do you think he purchases?”
“Now?” asked Karen.
“Yes,” Christie replied.
“Well, I think he orders for about 15 different parts. I’m not really sure because only he knows.”
“You mentioned that Johnnie must approve your purchases. Have there been any times that Johnnie hasn’t approved them?”
“Well, yes,” replied Karen, as she shifted positions.
“Would you tell me about one of those times?”
“Could we talk about this later? I really have a lot of work to do.”
“Just a couple more questions, Karen. I promise. Now, would you tell me about one of the times that Johnnie has not approved your purchases?”
“Ok, ok. It’s usually about quality. Sometimes Johnnie says that a particular vendor doesn’t provide a part that has the quality that another vendor has. Sometimes he’s even recommended a vendor who’s not on the approved list.”
“And did you question him about ordering from a vendor who’s not on the approved list?”
“Yes, and he always says he’ll add the vendor later.”
“Does he?”
“Most of the time, yes, but there were a couple of times that he did not. I didn’t ask him about these. After all, he’s my boss, and he’s the one who does my personnel evaluation.”
“You mentioned that sometimes the issue is the quality of a part provided by a particular vendor. Would you tell me about that?”
“Yes,” said Karen. Christie could sense a feeling of reluctance to answer. “I know Johnnie is trying to save money, but I don’t think these parts have nearly the quality that the parts that I had chosen have.”
“What about the cost?how does that compare between the items?”
“Now that’s the strange part. The parts that I don’t think are as good as those I’ve recommended cost more, not less.”
Abruptly, Karen says, “I’ve talked enough. I have to get back to my work.”
“May I talk with you again if I have additional questions?”
“I … I … yes, I suppose that would be fine. But I really don’t know anything more, so I don’t think I could help you.”
“One last thing, Karen: Please don’t mention what we’ve talked about here today to anyone. Can you do that?”
“Yes, I suppose I can,” replied Karen.
Christie left Quality-Best that day thinking that Karen knew more than she was saying but was reluctant to talk.
a. Before interviewing Johnnie, is there any information from his personnel file that you would like to know?

b. Before interviewing Johnnie, would you like to ask Donna and Alan any additional questions?

c. Before interviewing Johnnie, what documentation would you like to see and why? (Hint: Think of information that might indicate vendor fraud.)

d. Before interviewing Johnnie, is there anything else you might have wanted to know about him that perhaps Donna, Alan, and Karen could tell you because they see him almost daily?