Information Governance and Fraud Prevention in Healthcare Organizations

Information Governance 1
INFORMATION GOVERNANCE
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Information Governance 2
Question 1
Fraud is considered a deliberate course of deception with the aim of gaining an unfair
advantage (Lotich, 2017). Over the years, employee fraud has led to the loss of billions of
dollars. According to the Association of certified fraud examiners, about 2.7 billion dollars is lost
daily (Lotich, 2017). Fraud is a common occurrence and therefore, organizations that fail to deal
with the threat end up facing increased vulnerability to fraud.
In the case in HH hospital, the following reasons contributed to the prospect of the fraud;
One, we have technical reasons. After Matt Harris lands another new job from the company, his
accounts payable vendor file was not deleted by his boss Tracy Downs. This provided an
opportunity for Matt to forge about six disbursement authorization forms without much struggle.
For example, Max was able to input the data in his fraudulent forms into the accounts payable
accounting module that was under his vendor account. Another technical issue that promoted his
fraudulent activity was being left in charge of semi-weekly cash disbursement. This allowed
Matt to conduct his activities without suspicion.
Secondly, we have organizational reasons. According to the hospital's policies, it was
prohibited for members of the same family to be working together in a sensitive department. This
is because, it could negatively impact the integrity or safekeeping of corporate documents and
assets. Matt Harris who was to be hired as the accounts payable clerk was a son to Sharon Harris
who was the senior accounts, payable clerk. At first, this was considered a red flag since it
indicated an environment suitable for a potentially fraudulent activity. However, when Mr.
Walters, the internal audit manager brought the issue to the James Smith, the CFO, he
disregarded the matter even though it was against the company’s policy.
Lastly, we have people related reasons. Since Matt’s mother was one of the most
dedicated members in the accounts payable department and had won numerous employee awards
as the best employee, the CFO, James Smith saw no problem with Matt working under the same
sensitive department with his mother. He felt since Matt’s mother was honorable, his son would
be like her mother. Even after being warned it was a ground that could encourage fraud, James
did not agree to reassign Matt to another department. Also, when Sharon Harris recommended
her son to Tracy Downs for employment, she immediately hired him without considering other

Information Governance 3
candidates or even understanding why he was laid off from a similar job he was holding before
at a manufacturing company.
Question 2
Before the fraud happened, the Internal Audit Manager had detected some red flags that
provided an environment for fraudulent activity. This could have been of assistance to the
organization, but the CFO disregarded the idea. The Internal Audit Manager can handle the
situation through various ways. One, we have acquisition of the information on fraud. This will
include either a testimony from the victim of information found during the process of auditing
(Matriciani, 2014). Secondly, we have the management of the information relating to the fraud.
This will involve the strategies on how the fraud will be addressed on the basis of the
information collected.
Thirdly, we have the management of the database of information on fraud. Since the
transactions that were carried out included cash disbursements through the information system,
managing the information in the system is crucial. This would help determine other vulnerable
areas that are difficult to identify. Fourthly, we have dissemination of the audit report. This
would help the interested parties understand the source and reason for the fraud. It would also
pinpoint areas that need to be reevaluated in order to prevent such incidences (Botha, and Boon,
2003, pg. 34). Lastly, we have the management of various fraud schemes. This would ensure that
fraud prevention is key since when the red flags are identified in different organization practices,
the risk of fraud incidences would be eliminated.
Question 3
Information governance is a crucial aspect in all organizations since it assists with
controlling information through supporting organizational activities hence ensuring the
compliance to duties. Information governance establishes accountability for managing
information, policies, and protection of informational assets thus making it vital for healthcare
institutions (Primeau, 2018). Information governance assists in improving healthcare quality,
reduction of costs and risks and lastly increase operation efficiency.
The various information governance considerations in a hospital include; One, we have
accountability. The governing body of a healthcare organization is responsible for ensuring the