Nick Lynch

Article Dean Dorton

In today’s regulatory environment, companies must be proactive in addressing environmental and safety concerns. A third-party hotline encourages disclosure of critical issues and protects both the company and its employees.

Voluntary Protection Program Act

OSHAOSHA’s Voluntary Protection Program Act is garnering support from both political parties. Introduced on April 28, the proposed legislation would signify a long-term commitment to OSHA’s program recognizing exceptional worksite in terms of safety and health performance. Worksites that successfully participate in VPP are exempt from certain OSHA inspections.

Sens. Michael Bennett (D-CO) Mike Enzi (R-WY) are partnering in introducing the legislation. Enzi said in a press release: “It is important that Congress cement this successful program to help ensure that it persists, as well as to ensure that it can grow to include more of America’s small businesses.” Bennett said “Our bill ensures that OSHA can continue to use this successful and cost-effective program to ensure the health and safety of Colorado workers.”

Since its 1982 inception, over 2,200 worksites have participated in VPP; the VPP Act would codify the program and secure funding against Congress. At this writing the bill is still before the Senate’s Health, Education, Labor and Pensions Committee.

EPA Initiatives

EPAFor the first time since 2011, the United States Environmental Protection Agency will update its initiatives starting in October. The newly selected national enforcement initiatives will guide inspection and enforcement resources for the next three years.

The EPA will also increase focus on metals manufacturing, mining, chemical manufacturing, and food processing industries. Increased inspections for facilities under the Clean Air Act are planned, especially where there is a risk of catastrophic releases. Industrial facilities with substantial air emissions and large agricultural facilities are also in line for an expanded EPA focus.

The EPA’s limited enforcement budget makes this announcement noteworthy. Between FY2010 and FY2015 there was a 20% budget decrease. With that tight budget, the EPA’s top priority will switch to larger, complex cases. While this strategy entails fewer cases for the EPA to pursue, the conclusion is it will provide greater environmental and health gains.

Within this structure, the EPA’s attention will continue in focused priorities at facilities: expand targeting toxic air pollution emissions for storage of hazardous waste; ensure large industrial facilities comply with the Clean Air Act; examine energy extraction activities; pursue unpermitted raw sewage discharges; target concentrated animal feeding operations that hinder natural resources.

To compensate for reduced physical inspections and limited enforcement resources, the EPA plans to better engage technologies to gather information about compliance at facilities.

News

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EEOC sues Mobile Destination, Inc. for disability discrimination

For more information about Red Flag Reporting, the third-party hotline offered by Dean Dorton, please contact Nick Lynch at nlynch@deandortonstg.wpenginepowered.com or 859.425.7635.

Article Dean Dorton

Organizations face numerous risks to their success every day including regulatory risk, economic risk, disaster risk, supply-chain risk, and technology risk, just to name a few. Fraud risk is universally one of the risks faced by all businesses, from individually-owned to government entities and every type of business in between. Unfortunately for many organizations, their greatest assets are endangered by their own employees. Those who have been hired to help the organization succeed are potentially the biggest threats to a company.   For the past nine years, the Association of Certified Fraud Examiners has studied occupational fraud, the victims, and various methods used to commit these crimes. Between January 2014 and October 2015, 2,410 cases of occupational fraud were investigated in 114 different countries throughout the world. Highlights of the findings include:

  • The total loss caused by the cases in the study exceeded $6.3 billion, with an average loss per case of $2.7 million.
  • Asset misappropriation was by far the most common form of occupational fraud, occurring in more than 83% of cases, but causing the smallest median loss of $125,000. Financial statement fraud was on the other end of the spectrum, occurring in less than 10% of cases but causing a median loss of $975,000. Corruption cases fell in the middle, with 35.4% of cases and a median loss of $200,000.
  • Among the various forms of asset misappropriation, billing schemes and check tampering schemes posed the greatest risk based on their relative frequency and median loss.
  • The median loss for all cases in the study was $150,000, with 23.2% of cases causing losses of $1 million or more.

Tips were the most common detection method in the study, representing 39.1% of cases. Organizations that had reporting hotlines were much more likely to detect fraud through tips than organizations without hotlines (47.3% compared to 28.2%, respectively). Having a hotline in place allows for employers to address a situation early rather than letting it continue and end in the courts. A hotline also eliminates the employee excuse that they had nowhere to turn.   We believe that organizations should make it easy for their employees to report suspected fraudulent activity/theft, misconduct, or unethical behavior. Operating an effective fraud tip function is neither too complicated nor overly expensive. Dean Dorton can provide a safe, secure, and anonymous way to report these concerns 24/7 through our secure fraud hotline service, Red Flag Reporting. By putting this hotline in place, you will convey to your employees that your organization is committed to an ethical culture. As an employer, you will have comfort in that the hotline provides you with a safeguard that may identify employee concerns or complaints before they develop into a crisis situation. Utilizing a third-party expert provider provides your employees with comfort that their concerns will be handled in a confidential and anonymous manner.Download 2016 Report to the Nations

To learn more about our Red Flag Reporting service or how to investigate potential fraudulent activity, contact Elizabeth Woodward (ewoodward@deandortonstg.wpenginepowered.com) or Nick Lynch (nlynch@deandortonstg.wpenginepowered.com).

View Elizabeth Woodward’s Bio

Article Dean Dorton

We are excited to announce our team of forensic accounting and litigation consulting experts have been chosen as the featured presenters at the National Business Institute’s Forensic Accounting 101 for Attorneys! The program will take place in Louisville, KY on Friday, December 4, 2015 from 9:00 a.m. – 4:30 p.m.

Our team members, David Angelucci, Missy DeArk, John Herring, Nick Lynch, and Elizabeth Woodward will present relevant and pertinent fundamental tools and practical tips to help attorneys, paralegals, business directors, and executives discern financial statements, business valuations, and tax returns as well as indicate potential areas of fraud or other associated risks.

  1. Accounting Key Terms, Definitions and Lingo
  2. Assessing Misrepresentations in Financial Statements (With Real-World Examples)
  3. How to Calculate Damages Like a Forensic Accountant (With Real-World Examples)
  4. Business Valuation – Dissecting Closely Held Entities
  5. Savvy Ways to Locate Hidden Assets, Interests and Income (With Real-World Examples)
  6. Fraud Prevention, Detection and Response (With Real-World Examples)

Register online via the National Business Institute: Forensic Accounting 101 for Attorneys.

In the meantime, do not hesitate to reach out to us at if you have questions. To learn more about how our Litigation and Forensic Accounting team can help you, contact Elizabeth Woodward at ewoodward@deandortonstg.wpenginepowered.com or Missy DeArk at mdeark@deandortonstg.wpenginepowered.com.

Our consulting team specializes in a range of services for law firms to help your case, your clients, and your firm’s operations. This includes:

  • Expert Testimony
  • Litigation Consulting
  • Matrimonial Disputes (ex: tracing, calculations, income and cash flow analysis)
  • Business Valuation
  • Forensic Accounting
  • Mergers and Acquisitions Analysis
  • Bankruptcy Services
  • Technology Services


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Article Dean Dorton

We are excited to announce that some of our construction industry experts, Simon Keemer and Nick Lynch, will play integral roles in this year’s Construction Financial Management Association’s (CFMA) Ohio Valley Construction Conference at the Horseshoe Hotel and Casino on October 22-23, 2015.

Nick Lynch, one of Dean Dorton’s certified forensic accountants, will discuss current trends seen in fraud cases from professionals working in the construction field during the Fraud Panel on October 23, from 1:00 – 2:15 p.m. Panelists will use real life scenarios to highlight areas where you can reduce the risk of fraud in your business. Simon Keemer, leader of our construction industry team, will moderate the panel.

The Ohio Valley Construction Conference offers members and nonmembers from the Louisville, Indianapolis, Evansville and Lexington chapters of the CFMA and the Kentucky Society of CPAs the opportunity to participate in two full days of education (16 CPE credit hours) and networking. The conference also provides unique opportunities for construction industry financial leaders to discuss the issues they face on a daily basis. We hope to see many of you there.

CFMA Ohio Valley Construction Conference:
When: October 22-23, 2015
Where: Horseshoe Hotel and Casino (Elizabeth, IN)
Cost: KyCPA and/or CFMA member: $325; Nonmember: $350

View the full conference schedule here or register now.

For questions or additional information, contact Simon Keemer at 502-566-1036 or skeemer@deandortonstg.wpenginepowered.com.

View Simon Keemer’s Bio

Article Dean Dorton

According to the 2014 Report to the Nations on Occupational Fraud and Abuse, a study by the Association of Certified Fraud Examiners, the typical organization loses 5% of revenues to fraud each year and the median fraud loss in the manufacturing industry is $250,000. Billing schemes, corruption (kickbacks/conflicts of interest) and theft of non-cash assets are the most prevalent types of fraud in the manufacturing industry. Companies must be proactive in identifying and managing fraud risks that can be an expensive and potentially devastating drain on a company’s financial resources. A strong internal control environment will help you safeguard your assets and attract and retain capital by increasing the confidence investors, regulators, audit committee members and the general public have in the integrity of your organization’s financial reports.   We recommend that companies periodically consider having a fraud prevention checkup.

To determine the health of your internal control environment and the need for a fraud prevention checkup, answer the following questions:

  • Has your company ever performed a fraud risk assessment?
  • Are you setting a strong ethical tone in your organization that starts at the top?
  • Are you managing fraud risk through management review and monitoring of key metrics?
  • Do your employees know what to do if they observe unethical behavior (fraud, theft, safety concerns) and is there a mechanism in place to report concerns anonymously?
  • Do you have proper segregation of duties surrounding your cash disbursement and receipt processes?
  • Do you have proper controls in place to prevent and deter the misappropriation of inventory and fixed assets?
  • Do you have proper controls surrounding vendor management?
  • Do your employees have unusually close relationships with vendors or customers?
  • Do you have policies in place to restrict or require disclosure of related party relationships?
  • Do your employees understand what represents a conflict of interest?

Is it time for a fraud prevention checkup at your company? We have a team of Certified Fraud Examiners that can help. For more information on protecting your company’s assets, contact Nick Lynch at 859-425-7635 or nlynch@deandortonstg.wpenginepowered.com or Lance Mann at 502-566-1005 or lmann@deandortonstg.wpenginepowered.com.

View Lance Mann’s Bio

Article Dean Dorton

There is a director at Dean Dorton that claims to be a belt and suspenders type of person.  Some may call this thorough and others may call this inefficient.  One thing we can all agree on is that this is effective.  I recently took a trip to the Dominican Republic.  Upon entering the airport, I stood in line for about 15 minutes and was then asked to pay a $10 entrance fee to get in to the country.  Then I stood in line for another 15 minutes and I was asked to provide proof (in the form of a receipt) that I had actually paid the $10 at the first checkpoint.  Only then was I allowed to get in another line to get through immigration.  Most people in line complained about this process because it took so much time and seemed redundant.  I walked through the line quite impressed with how this country has embraced internal controls over cash receipts.  They wanted to make sure no one had skipped through the lines in order to avoid this payment.  This control served another purpose to ensure that the individual collecting the $10 entrance fee was not misappropriating it in some way.  The airport could reconcile the receipts collected at the 2nd checkpoint to the actual cash collected at the first checkpoint.

This type of control is called a compensating internal control.  Another thing to call it is a double check (not to be confused with a discount double check).  Internal controls are only as good as the systems and people executing the internal controls.  You do not need compensating controls over every process.  However – companies should consider the need for compensating controls over their most important processes.  Generally I think the most important areas relate to cash.  Cash receipts and disbursements are two of the most important processes for every company.  One example of a compensating control over cash receipts is to have the person who opens the mail create a log of all incoming checks before giving the checks to the person who creates the deposit.  Then after the deposit has been made – you go back and compare the deposit slip to that log.  This control ensures that the person who is in charge of relieving accounts receivable is not somehow misappropriating checks for their own benefit.  One example of a compensating control over cash disbursements is to implement a positive payment system at your bank.  You implement all of the correct controls over paying your bills but then someone outside of the cash disbursement cycle reviews a list of checks sent to them directly from the bank before the bank approves the check for payment.  This ensures that the person writing checks isn’t writing them to a phony company or to themselves directly.

Compensating controls add that extra layer of safeguarding to your most important assets.  Take a minute to review your internal control structure and consider if there is any need to add a double check to the system.  If you would like assistance in reviewing your internal controls or have any questions on where to look, feel free to contact Lance Mann (lmann@deandortonstg.wpenginepowered.com) or Nick Lynch (nlynch@deandortonstg.wpenginepowered.com).

View Lance Mann’s Bio