Presently, the Full of Hope Center facility accommodates a maximum of 20 children at one time, although

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Presently, the Full of Hope Center facility accommodates a maximum of 20 children at one time, although more children enroll and attend part-time. Sometimes, especially during school vacations, daily attendance is less than 20. Hours are from 7:00 a.m. until 6:00 p.m. each weekday, with lunch and snacks provided for the children. The fee is $500 per week per child, with payment due at the beginning of each week. However, fee payments often trickle in during the week as the services are provided. Each day, three employees operate the Full of Hope Center—the salaried director, one full-time employee, and one part-time emplo

But, within a few days, Ruth noticed the cash collected did not match the number of children she observed at the Center during the week. When Ruth asked Miriam if there was additional cash that had been collected, Miriam reached into a desk drawer and handed Ruth currency that totalled $1,000. Miriam explained that she failed to put the cash in the normal place when the parent paid. Ruth was uncomfortable with this situation and thought it prudent to investigate further.

She scanned the weekly attendance record and the receipt book. She noted no cash receipt for a family she personally knew, even though their children were listed as attending that week. When contacted by Ruth, the family showed her a receipt for the payment, even though none appeared in the Center’s receipt book.

Although uncomfortable about confronting Miriam, Esther and Ruth knew they needed to speak with her about the Center’s cash collection procedures and her salary. Especially, they needed more details concerning the $1,000. When questioned, Miriam confessed that the Full of Hope Center had a past due Food Market grocery bill that she was paying with cash from daily receipts.

Esther and Ruth next visited the Food Market office where they learned that the Center indeed had an outstanding bill of approximately $5,000. The unpaid Full of Hope Center bill had been almost $6,500 earlier in the year.

Within the same week, a letter from the IRS arrived at the church office. The letter included a notification that the Full of Hope Center failed to file a payroll tax return. Again, Esther and Ruth questioned Miriam. Upset, Miriam responded that she made all the tax deposits but did not know reports needed to be filed.

Within a few days, Miriam notified Pastor Michael that she would be leaving the Full of Hope Center in two weeks. She stated that her departure was due to the additional stress from dealing with Esther and Ruth and the Center’s financial problems. Esther and Ruth were neither surprised nor disappointed by Miriam’s decision, but Pastor Michael tried to convince Miriam to reconsider.

During the final two weeks that Miriam was director of the Full of Hope Center, she told parents that she was starting a childcare service in her home. Parents related that Miriam said, “The church has lots of money but just will not support this Center adequately. That is the reason I am leaving.”

Additional Details Uncovered

After Miriam left the Center, Ruth was able to obtain some additional financial information on Miriam activities during the past three years. The records revealed that in 2018 Miriam had a modest property that she purchased for $45,000.

She had a mortgage on that same property in the amount of $40,000. Other public records indicate that Miriam also owned a property that cost $135,000 and the balance on the mortgage was $92,000 in 2019. Ruth further discover that in 2018, Miriam had a car that cost $4,500 and there was a loan taken out for that car in the amount of $2,750. Miriam also had $5,500 in savings with National Commercial Bank in 2018 and one year later, had $10,000 in savings at National Commercial Bank.

She also has a credit card with National Commercial and had paid $1,875 to the bank for credit card payments in 2019. The car she currently drives cost $23,000 and the balance of the loan on that car was $13,275 in 2019. Miriam salary in 2019 included a salary of $25,325 and extra income from doing side jobs for the church in the amount of $3,400. Her living expenses have been estimated at $16,825 in 2019.

By 2020, she had savings of $16,500 and had made credit card payments in the amount of $2,540 in that same year. She still owned the same property but the balance on the mortgage was now $73,000. She still drove the same vehicle but the loan on the vehicle was now $7,850. Miriam bought a piece of land that cost $23,000 and a jet ski for one of her kids that cost $2,500 in 2020. Her compensation for 2020 included a salary of $28,250 with extra income of $7,000. Her living expenses were estimated at $18,725

Using the net worth method, estimate the amount of the possible embezzlement by Miriam in 2019 and 2020.