Image via WikipediaEvery year, many organizations suffer misappropriation of funds and white collar crimes of various dimensions that are either prosecuted in courts of law or neglected altogether due to laxity of organizational rules and regulations. Such improper behaviors resulting from poor book keeping and distorted accounting procedures ultimately result in the loss of millions of dollars. According to Franklin and Raadschelders (2004), bureaucracy can cause hardships on a state's economy. Political and self-interests are some factors that can impede budgetary operations of a state like in Oklahoma where disproportional distribution of services, kickbacks, unethical behaviors, and corruption have been the norm for some time. Budgetary wranglings is not limited to the state of Oklahoma only. In essence, it is a widespread practice that can be found in both private and governmental organizations. Bureaucrats or office-bearers driven by the desire to get-rich-quick have caused bankruptcies to many financially stable organizations. Failure to uphold constitutional values, conflicting ideologies, disregard for budgetary control and mismanagement are some of the causes that lead to budgetary breakdowns. According to DeThomas, Oliver, and Seereiter (1987), organizational success can be achieved by laying down an impressive financial planning that will serve as a guiding force.
Corporate financial scandal has become a global problem and that it is not limited to the U.S. alone. The latest financial scandal that shook Australasia happened in Victoria, a region of Australia. Located in the city of Melbourne, Sonray Capital Markets Pty Ltd. is a marketing company that deals in investments, derivatives, futures, and international and domestic equities. Former CEO of Sonray, Scott Murray, started a two-year jail-term without the prospect of parole for deliberately shuffling client money from one account to another leading to the subsequent collapse of Sonray in June of 2010. In total, Sonray lost a staggering $46.7 million (Wood, 2011). According to court documents, Murray, working surreptitiously in cahoot with his boss Russell Johnson, dragged money belonging to clients to Sonray's operating budget. This was done to rectify the financial afflictions faced by Sonray and also to fulfill the directives of his immediate boss who, in a separate court proceeding, was also charged with twenty-four counts including conspiracy to commit theft and making false accounting.
In order to resolve past financial follies, Sonray Capital Markets Pty Ltd. has hired a new external administrator who is tasked with overseeing its day to day activities until such a time when it can be determined if it can continue with its normal operations or go into liquidation. The new administrator has set up a line of communication that include telephone numbers, a postal address number, and a web site with e-mail addresses exclusively for people intending to lodge grievances. This is a commendable action as it will help Sonray deal with shareholders, creditors, and employees in an amicable manner without resorting to grueling court proceedings that could result in challenging financial settlements.
DeThomas, A., Oliver, J., & Seereiter, D. (1987). Designing the strategic financial planning system. American Business Review, 5(2), 23–31.
Franklin, A. L., & Raadschelders, J. C. (2004). Ethics in local government budgeting: Is there a gap between theory and practice? Public Administration Quarterly, 27(4), 456–490.
Woods, L (2010). CEO jailed for Sonray theft. Retrieved from http://www.theage.com.au/business/ceo-jailed-for-sonray-theft-20111014-1lp77.html