The California JPIA recognizes the importance of protecting the organization, its operations, its employees and its assets against financial risks, operational breaches and unethical activities. Therefore, it is incumbent upon the Authority’s Executive Committee and management to institute and clearly communicate the fraud prevention policy to both internal and external stakeholders.
The Authority maintains a zero tolerance policy regarding fraud and corruption. All matters raised by any source will be taken seriously and properly investigated. This policy covers all Authority employees and officers. Additionally, this policy covers all Authority vendors, customers and partners to the extent that any Authority resources are committed or used.
II. ASSIGNMENT OF RESPONSIBILITY
The Chief Executive Officer is responsible for the administration, revision, interpretation and application of this policy.
A. Fraud is defined as an intentional deception, misappropriation of resources, or the manipulation of data to the advantage or disadvantage of a person or entity. Some examples of fraud include:
- Falsification or inflation of expenses and invoices
- Misappropriation of the Authority’s assets (funds, supplies, furniture, equipment, etc.)
- Unauthorized alteration or falsification of records
- Improprieties in handling and accounting of monies collected, cash or otherwise
- Knowingly providing false information on job applications, time sheets, requests for reimbursement or funding, and other forms
- Profiteering as a result of insider knowledge of confidential activities
- Computer-related activity involving unauthorized alteration, destruction, forgery, manipulation of data, or misappropriation of Authority-owned software
B. Corruption is defined as the offering, giving, soliciting or accepting of an inducement or reward that may improperly influence the action of a person or entity. Some examples of corruption include:
IV. REPORTING FRAUD OR CORRUPTION
Allegations and concerns about fraudulent or corrupt activity may come from various sources including:
- Members of the public
- Results of internal or external audit reviews
- Any other interested parties
All employees have a duty to report any information or suspicions about the possible fraudulent or corrupt activity of any officer, employee, vendor or any other party associated with the Authority. Such duty includes reporting this immediately to the employee’s supervisor.
If reporting this to the employee’s supervisor compromises the integrity of the information in any way, the employee should contact the Chief Executive Officer and arrange for a meeting. Similarly, if the information cannot be discussed with the Chief Executive Officer, the employee should contact the Assistant Executive Officer and arrange for a meeting to discuss the matter.
An anonymous written complaint can instead be provided to the Chief Executive Officer. It is strongly recommended that complaints be made no later than 12 working days of having knowledge or suspicion. It is also strongly recommended that a written and signed statement of the complaint be submitted to the Chief Executive Officer within eight working days of the initial anonymous complaint report. Anonymity in the complaint procedure may compromise the Authority’s ability to complete a thorough investigation.
Complaints must include the following information:
- The employee’s name and position title.
- The name of the alleged person or persons committing the fraud, including their title(s).
- The specific nature of the fraud, and if known, how long it has gone on.
- Witnesses to the fraud, if any.
No attempt should be made by anyone other than those authorized to personally conduct investigations or interviews/interrogations related to any suspected fraudulent act.
Retaliation and retribution will not be tolerated against any employee or officer who reports suspected fraudulent or corrupt activities. All reports will be taken seriously and will be investigated by appropriate staff or legal counsel. If deemed necessary, the Authority will notify and fully cooperate with the appropriate law enforcement agency. Any investigation resulting in the finding of fraud or corruption will be reported to the Authority’s Executive Committee. Fraudulent or corrupt activities that result in disciplinary action will be reported to the Board of Directors.
If an employee is determined to have acted maliciously or with deceit in making a false accusation, the employee will be subject to disciplinary action.
V. DETERRING FRAUD AND CORRUPTION
The Authority has established internal controls, policies and procedures in an effort to deter, prevent, and detect fraud and corruption.
All new employees, plus temporary and contract employees, are subject to background investigations including a criminal background check. Prior to making an offer of employment to any applicant, the Authority will also verify some or all of the following items: employment history, education, and personal references.
All vendors, contractors, and suppliers must be active, in good standing, and authorized to transact business in the state of California. Vendors, contractors and suppliers are also subject to screening.
Contractual agreements with the Authority may contain provisions prohibiting fraudulent or corruptive acts and will include information about reporting fraud and corruption.
The Authority employees will receive fraud and corruption awareness training before policy implementation and on a regular basis. New employees will receive training as part of orientation at the commencement of employment.
VI. CORRECTIVE ACTION
Final determination regarding action against an employee, vendor, recipient or other person found to have committed fraud or corruption will be made by the Chief Executive Officer. If the fraud or corruption was found to include the involvement of the Chief Executive Officer, the Executive Committee will take appropriate action.
Offenders at all levels of the organization will be treated equally regardless of their position or years of service with the Authority. Determinations will be made based on a finding of facts in each case, actual or potential damage to the organization, cooperation by the offender, and legal requirements.
Depending upon the seriousness of the offense and the facts of each individual case, action against an employee can range from written reprimand to legal action, either civil or criminal. In all cases involving monetary losses, the Authority will pursue any and all means of legal recovery.