Fighting fraud through the numbers

Sara (Melendy) Kern.

Most people don’t think of accountants as crime-fighting superheroes, but to many people in the Spokane area, Sara (Melendy) Kern, PhD ’05, is just that.

Kern, an associate professor of accounting at Gonzaga University, runs the Justice for Fraud Victims Project (JFVP), where accounting students provide assistance to victims of white-collar crimes. The JFVP is a joint partnership between Gonzaga, local and federal law enforcement and the Association of Certified Fraud Examiners (ACFE).

The program was launched in 2009, when K. Jill Bolton, an assistant U.S. attorney, approached Kern with a call to help victims of financial fraud who needed full forensic accounting investigations but were unable to afford the services, which can cost up to $20,000.

Kern eagerly took up the cause. With the hard work of Kern, Bolton, Gary Weber, associate professor and director of accounting programs at Gonzaga, Stacey Carr, detective at the Spokane Police Department, Shane Smith, Spokane County deputy prosecuting attorney, and Marie Rice, president of the Spokane Chapter of the Association of Certified Fraud Examiners, the JFVP was born.

The cases the students work on are referred to the JFVP by various law enforcement agencies in the Spokane area and are selected based on several criteria, such as the condition and availability of the books and records and the likely cooperation of the victim.

The most critical factor in the case selection is the victim’s financial need. Cases are only accepted if the victim cannot afford a commercially available forensic examination. This allows the JFVP to serve a pressing need for small businesses and nonprofit organizations in the local community.

Students who participate in the program undergo a rigorous selection process, then work in teams of three along with a mentor from the ACFE. In addition to assisting fraud victims, the students receive academic credit for this hands-on, service-learning opportunity.

“They are helping real victims. They’re looking at real books and records and they’re able to take what they’re learning in the classroom and bring it out to the community and actually use it to provide a good service,” Kern says.

The program has been a resounding success, resulting in national awards for Kern and Weber, serving as a model for several other universities and, most important, helping those who have suffered from fraud, scams or embezzlement.

“We have substantiated hundreds of thousands of dollars in losses for victims,” she says. “Our students’ work has led to the investigation and prosecution of suspects who might otherwise have gone unpunished because of lack of forensic accounting resources in the community. That’s what’s most exciting about this project.”

Kern first became interested in forensic accounting because of Ronald Huefner, SUNY Distinguished Teaching Professor Emeritus in the Department of Accounting and Law, while she studied for her doctorate at the UB School of Management.

“Ron had been teaching the fraud examination class for several years,” she says. “I approached him about dissertation topic ideas, and he invited me to work on a project related to corporate governance. It eventually became my dissertation topic. Ron recognized the valuable opportunity for me to develop expertise in a traditionally underserved area of accounting education which eventually gave me a competitive edge in the job market.

“I definitely owe my success to Ron,” Kern says. “We have co-authored several published papers together and he continues to provide me with valuable career advice. I could not ask for a better mentor.”

Written by Cathy Wilde


Update, August 2022: Kern, now a professor of accounting in the Gonzaga University School of Business Administration, was named associate dean of Gonzaga’s undergraduate business programs in July 2022. The Justice for Fraud Victims Project, which she founded, is still going strong at Gonzaga—and has been incorporated into more than 15 other business schools around the country, too.

Among other professional accomplishments, Kern is a past president of the Western region of the American Accounting Association and currently serves on several national award committees for the association. This year, she also was promoted to associate editor at the Journal of Accounting Education.