HomeMy WebLinkAboutPolicy 50 - Antifraud PolicyOTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANTIFRAUD POLICY 50 10/03/07 01/04/12
Page 1 of 5
PURPOSE
The purpose of this policy is to establish guidelines and assign
responsibility for the development of controls and conducting of
investigations to aid in the prevention, detection and reporting of
fraud against the District.
SCOPE
The District has zero tolerance for fraud and will investigate any
fraud or suspected fraud without regard to the length of service,
position / title, or relationship to the District of the suspected
wrongdoer(s). Violation of this policy is an act of misconduct
meriting dismissal without prior warning or disciplinary action in
accordance with the District’s Discipline Policy and Procedures.
Further, an employee who directly observes or otherwise knows of
fraudulent activity and fails to report it is in violation of this
policy and may be subject to discipline as a result of this failure to
act, up to and including termination of employment.
BACKGROUND
The Otay Water District’s Pre-Employment Policies require a through
background investigation which includes fingerprinting to ascertain a
candidate’s criminal history. The Employee Standards of Conduct
requires all personnel to observe high standards of business and
personal ethics in the conduct of their duties and responsibilities.
As employees and representatives of the District, we must practice
honesty and integrity in fulfilling our responsibilities and comply
with all applicable laws and regulations. This policy applies to all
directors, officers, employees, volunteers, and agents of the
District.
POLICY
1.Definition of Fraud:
Fraud is defined as the intentional deception, false
representation or concealment of a material fact,
misappropriation of resources, or manipulation of data to the
advantage or disadvantage of a person or entity. Fraud is not
restricted to instances in which monetary or material benefits
are received or denied, but may include intangible benefits such
as status, power, position, and avoiding discipline.
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANTIFRAUD POLICY 50 10/03/07 01/04/12
Page 2 of 5
2.Actions Constituting Fraud:
Examples of fraud include, but are not limited to, the following:
Forgery, falsification or alteration of documents or
instruments such as, but not limited to, timesheets, payroll
records, travel and expense claims, checks, bank drafts,
promissory notes, securities, invoices, purchase orders,
receipts, other financial documents, contracts, vendor
agreements, electronic files, etc.
Misappropriation of funds, securities, supplies, inventory, or
any other assets achieved through the use of deception or
willful concealment.
Impropriety in the handling or reporting of money or financial
transactions.
Profiteering as a result of insider knowledge of District
activities.
Bribery and corruption.
Authorizing or accepting payments or payments in kind for goods
or services not performed, or for hours not worked.
Destruction, removal, theft or inappropriate use of records,
furniture, fixtures, equipment, or any other assets achieved
through the use of deception or willful concealment.
Any violation of Federal, State, or local laws related to fraud
or dishonest activities.
Any similar or related irregularity or action.
3.Management Responsibilities:
The General Manager’s Office is responsible for the prevention
and detection of fraud, misappropriations, and other
irregularities. District management shall identify the risks to
which systems, operations and procedures are exposed, and
develop, maintain and ensure compliance with an appropriate and
effective internal control system to provide reasonable assurance
for the prevention and detection of fraud. Each member of
management shares in this responsibility and shall familiarize
themselves with the risks and exposures inherent in their area of
responsibility and be alert for any indication of irregularity.
4.Reporting Responsibilities:
Employees who know, or should reasonably suspect under the
circumstances before them, that another employee is committing
fraud, have a duty to report such knowledge or suspicion to
District management, including the facts and/or observations upon
which such knowledge is based. Failure to so report may result
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANTIFRAUD POLICY 50 10/03/07 01/04/12
Page 3 of 5
in disciplinary action, up to and including termination of
employment. In most cases, an employee’s immediate supervisor is
in the best position to address an area of concern. However, if
an employee is not comfortable speaking with their supervisor or
is not satisfied with their supervisor’s response, they should
speak with the Manager of Human Resources or anyone in management
whom they feel is more appropriate, including District’s Legal
Counsel.
Employees must not attempt to personally conduct
investigations/interviews/interrogations, or discuss any details
of the suspected fraudulent act with unauthorized personnel.
5.Acting in Good Faith:
Anyone filing a complaint concerning suspected fraudulent
activity is presumed to do so in good faith and have reasonable
grounds for believing the information disclosed indicates
improper or illegal activity. However, based on the totality of
the circumstances, any allegations found to be unsubstantiated
and made in bad faith or for malicious reasons may constitute
grounds for disciplinary action under the District’s Discipline
Policy and Procedures against the person filing the complaint.
6.No Retaliation:
No executive, manager, supervisor, or employee who in good faith
reports suspected fraudulent activity shall suffer harassment,
retaliation or adverse employment consequences. An employee who
retaliates against a person who has reported a violation in good
faith is subject to disciplinary action under the District’s
Discipline Policy and Procedures.
7.Confidentiality:
Violations or suspected violations may be submitted on a
confidential basis by the complainant. Reports of violations or
suspected violations will be kept confidential to the extent
possible, consistent with the need to conduct an adequate
investigation. Information pertaining to the investigation shall
not be disclosed or discussed with anyone other than those who
have a legitimate need to know for the proper discharge of their
duties.
8.Investigation:
The General Manager, or designee, shall investigate all
fraudulent or suspected fraudulent acts. Based on the severity
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANTIFRAUD POLICY 50 10/03/07 01/04/12
Page 4 of 5
of the allegations, an immediate decision will be made concerning
coordinating the investigation with the appropriate law
enforcement officials. District legal counsel may also be
involved in the process, as deemed appropriate. The
investigator(s) shall take immediate steps as needed to secure
statements, physical assets including computers and any records
thereon, and all other potentially evidential documents.
Affected employees shall cooperate fully with investigators,
including regulatory or law enforcement personnel.
Where an initial investigation reveals that there are reasonable
grounds for suspicion and to facilitate the ongoing
investigation, the suspected wrongdoer(s) may be suspended in
accordance with District policies and procedures.
9.Reporting:
The investigator is responsible for keeping the General Manager
informed of the status of all investigations and findings. Upon
completion of the investigation the General Manager will then, as
deemed appropriate, report the findings to the President of the
District’s Board of Directors. If an investigation substantiates
that fraudulent or illegal activity has occurred, decisions to
prosecute and/or refer the investigation results to the
appropriate regulatory agencies for independent investigation
will be made in conjunction with legal counsel.
10.Corrective Action:
The District will take the necessary steps, including legal
action, to recover any losses arising from fraud or attempted
fraud. This may include action against third parties involved in
the fraud whose negligence contributed to the fraud. Management
is responsible for taking the appropriate corrective action to
ensure adequate controls exist to detect and prevent a recurrence
of fraudulent activity.
11.Waste and Abuse:
Nothing in this policy shall preclude the District from
investigating alleged or possible waste or abuse of District
property, funds, or resources, regardless of whether the actions
investigated constitute fraud or arise from an investigation of
alleged or possible fraud. Nothing in this policy shall preclude
the District from taking disciplinary action, where appropriate,
for substantiated waste or abuse, regardless of whether the
OTAY WATER DISTRICT
BOARD OF DIRECTORS POLICY
Subject Policy
Number
Date
Adopted
Date
Revised
ANTIFRAUD POLICY 50 10/03/07 01/04/12
Page 5 of 5
discovery of the waste or abuse arose from an investigation of
alleged or possible fraud.