Macy's says employee hid up to $154 million in expenses since 2021.

[sds71]

Macy’s said it found “an issue related to delivery expenses in one of its accrual accounts” while preparing its quarterly results. After an independent investigation, the company found that one employee who handled “small package delivery expense accounting” made erroneous entries to hide about $132 million to $154 million in delivery expenses from the fourth quarter of 2021 through this year’s fiscal third quarter. The company said it had about $4.36 billion in delivery expenses during that time.

The retailer added the actions did not affect its cash management and vendor payments, and said the employee no longer works at the company.

https://www.cnbc.com/2024/11/25/macys-posts-preliminary-results-delays-full-earnings-release.html

 

[amandab]

I'm in finance, and I'd *love* to see more information on this. What was the reason for hiding the expenses, if it didn't affect cash management? This feels purposeful (or a habitual error), but to what end?

 

[ChatteringBirds]

https://edition.cnn.com/2024/12/11/business/macys-employee-expenses-earnings/index.html

I saw this article from today on CNN and remembered this thread. They still don't explain why an accountant would hide expenses like this. Any thoughts?

 

[ChatteringBirds]

@amandab

I see an update in my Newsfeed that explains why the employee did this.

https://finance.yahoo.com/news/macy-employee-responsible-151-million-185209969.html

The employee told investigators they had mistakenly understated the amount of small parcel delivery expenses in late 2021... and they continued to intentionally make erroneous accounting entries to mask the mistake.

 

[amandab]

WOW. So that must have been a hell of a mistake they made in 2021, if it took at least $151M in adjustments to try and offset. Whoo boy.

 

[Inthedetails]

WOW. So that must have been a hell of a mistake they made in 2021, if it took at least $151M in adjustments to try and offset. Whoo boy.

It's bizarre, but I'm thinking it was an error compounded over time rather than embezzlement. Why did nobody catch such big errors is what is so strange. 2020 was a game-changing year for deliveries, but seems like no one was actually looking at the numbers to question what they meant.

I think more than one employee needs to be called to the carpet, imo.

jmo

 

[amandab]

It's bizarre, but I'm thinking it was an error compounded over time rather than embezzlement. Why did nobody catch such big errors is what is so strange. 2020 was a game-changing year for deliveries, but seems like no one was actually looking at the numbers to question what they meant.

I think more than one employee needs to be called to the carpet, imo.

jmo

Oh absolutely - there's no way the fault of this rests solely on one person.

 

[Mr.Dandy]

I used to work for a retailer as the “counter”. My job was to count specified product every day, counting the entire store 4 times in a year, then an overall count by other people. It kind of showed how good of a counter you were if your numbers were good on the main count. But, the inventory numbers were completely my responsibility and I had a lot of power because of it.
One time another store had some sort of theft occur where they were down a ton of product. Like high end product that they shouldn’t be missing. So rather than be honest and claim the loss, they stole another stores entire truck full of merchandise. The store they stole from was having all kinds of trouble too so I guess they figured no one would notice. But all of that stuff is specified on paperwork so it was just a matter of time before someone put it together.
With this case I feel like someone made a huge mistake and maybe employees benefited from costs being so low because of the initial mistake…. They felt they had to keep hiding it. When you only have one person in charge or that person is deemed trustworthy, it’s easy for these things to happen. I guarantee the person had an “oh sh*t” moment when they realized the initial error and couldn’t bring themselves to tell anyone above them what had happened…. So they just kept hiding it until they got caught.