The CFO of Zale Corp., Mark Lenz has been placed on administrative leave indefinitely. His offense: not disclosing delayed [tag]vendor payments[/tag] done to improve 2005 cash flow. Vendor payments scheduled for the last two weeks of the company’s fiscal year were delayed until the beginning of the next fiscal year. The [tag]delayed payments[/tag] totaled $8.2 million, and while they did not affect revenue or earnings, the delayed payments did affect the reported free operating cash flow of $89 million.

Zale has had lower-than-expected sales of late, and a plan to raise sales this past Christmas failed. The company’s president, Paul Leonard, resigned in February, and the COO, Sue Gove, resigned in March.

In April, the company announced that it was being investigated by the [tag]Securities and Exchange Commission[/tag] for [tag]accounting practices[/tag] related to the timing of vendor payments. The [tag]SEC investigation[/tag] also includes accounting for extended-service agreements, leases, and payroll accruals.