RESPONSIBLE CITY AGENCY: Finance Department, Finance Director
KEYWORDS: Fraud, waste, abuse, misappropriation, theft, irregularity, misuse, misapplication, resources, assets.
Scope
This policy applies to all city employees including part time, temporary, contract employees, contractors and vendors.
1. General
1.1 The city does not tolerate fraud, misappropriation, theft, misuse, misapplication, waste or abuse of city resources or assets by any employee, vendor, or contractor.
1.2 This policy is established to facilitate the development of controls that will aid in the detection and prevention of fraud, waste or abuse. It is the intent of the city to promote consistent organizational behavior by providing guidelines and assigning responsibility for the development of controls and the conduct of investigations.
1.3 This policy applies to certain irregularities, or suspected irregularities, involving employees, consultants, vendors, contractors or any other parties with a business relationship with the city.
1.4 Employees who are found to have violated this policy may be disciplined. Employees who abuse this policy by filing frivolous or malicious reports may also be disciplined.
1.5 Vendors or contractors who are found to have violated this policy will be subject to potential termination of their contract, purchase order or relationship with the city as well as collection or legal action.
2. Fraud
2.1 Fraud is defined as a wrongful or criminal deception intended to result in financial or personal gain. Fraud has a direct and material effect on the financial viability of the city. Each employee should be familiar with the types of improprieties that might occur within his or her area of responsibility and be alert for any indication of irregularity.
2.2 Fraud includes the following examples:
A. Theft or misappropriation of funds, supplies, or other assets.
B. Impropriety in the handling or reporting of money or financial transactions.
C. Profiteering as a result of insider knowledge of city activities.
D. Authorization or receipt of compensation for hours not worked.
3. Waste
3.1 Waste relates primarily to mismanagement and inadequate oversight. Waste involves a thoughtless or careless act or omission by persons with control over or access to city resources. These acts may, directly or indirectly, result in unnecessary costs to the city. Each employee should be familiar with the types of waste that might occur within his or her area of responsibility and be alert for any indication of wasteful practices.
3.2 Waste includes the following activities regarding city resources:
A. Incurring unnecessary expenses.
B. Mismanagement, misuse, or squandering of city resources.
C. Inefficient or ineffective practices.
D. Poor attendance or time mismanagement.
E. Unnecessary idling in city vehicles
4. Abuse
4.1 Abuse involves questionable behavior that is inconsistent with city policies and practices. Abuse also includes excessive or improper use of an employee’s position or authority for personal financial enrichment.
4.2 Abuse includes the following activities:
A. Using one's position with the city to gain an advantage when conducting personal business.
B. Disclosing confidential and proprietary city information to outside parties.
C. Accepting or seeking anything of value, including gifts, from contractors, vendors, or persons providing services/materials to the city
D. Destruction, removal, or inappropriate use of city property.
5. Controls
3.1 The Finance Department will establish and maintain proper internal controls through city policies and procedures to aid management and employees in preventing, detecting and reporting suspected fraud, waste or abuse.
3.2 The city will establish and maintain a hotline for reporting cases of fraud, waste and abuse in which the individual filing the report feels the need to remain anonymous. Procedures will also be established to guide employees in the use of the hotline. Issues that do not meet the definitions of fraud, waste or abuse in this policy and do not require anonymity should be reported to the employee’s supervisor or through the city’s grievance procedure.
3.3 The city will establish a Fraud, Waste and Abuse Review Committee with representation from the following departments: Finance, Human Resources, Attorney’s Office, Mayor’s Office and Council Staff. The purpose of the Committee will be to review all complaints and allegations of fraud, waste or abuse and determine the appropriate direction the investigation into each matter should take. The Committee will also make recommendations of appropriate action at the conclusion of each investigation.
3.4 All employees should be made aware of this policy and the Fraud, Waste and Abuse Reporting and Investigation Procedures as part of the new hire orientation.
CURRENT REFERENCES: Fraud, Waste and Abuse Reporting and Investigation Procedures, Small Purchase Check Procedures, Petty Cash Procedures.
EFFECTIVE DATE (DATE SIGNED BY MAYOR): MARCH 9, 2017