Reporting of Suspected Fraudulent Transactions
Date of Current Revision: September, 2006
Responsible Office: Director, Audit & Management Services
- PURPOSE
The purpose of this policy is to establish procedures for reporting suspected fraudulent acts involving University property or resources. - AUTHORITY
The Board of Visitors has granted the President the authority to create and manage policies for the effective operation of the University. In addition, Code of Virginia Section 30-138 requires the President to notify the Auditor of Public Accounts and the State Police of circumstances suggesting a reasonable possibility that a fraudulent transaction involving University employees has occurred. - DEFINITIONS
Fraud:
The intentional deception perpetrated by an individual or individuals, which could result in a tangible or intangible benefit to themselves and/or could cause detriment to the University, the Commonwealth, or others. Fraud includes a false representation of a matter of fact (whether by words or by conduct, by false or misleading statements, or by concealment of that which should have been disclosed) that deceives and is intended to deceive. Fraudulent transactions can include but are not limited to the following prohibited acts:
- misappropriation of cash or funds with falsification of documents;
- falsification of documents;
- unauthorized use of University property or resources;
- unauthorized access to (or misuse of) computer systems or equipment;
- falsifying entries to payroll or travel records;
- charging personal purchases to the University; and
- unauthorized use of University employees.
- APPLICABILITY
This policy applies to all University departments, activities, employees, students, and student organizations. - POLICY
The University will not tolerate theft, waste, abuse or misuse of State or University property or other resources through fraudulent means. University employees and students will be required to report suspected irregularities or possible fraudulent transactions to Audit and Management Services. All reported allegations will be fully reviewed, and substantiated fraudulent activities will be reported to the proper authorities. - PROCEDURES
6.1 Upon the discovery of circumstances which suggest that a fraudulent transaction may have occurred, it is the responsibility of University employees and students to immediately notify the Director of Audit and Management Services. Upon such notification, the Director of Audit and Management Services will ensure that the appropriate Vice President and the President are informed of the questionable transaction or specific event.
6.2 Audit and Management Services will perform audit procedures to determine whether there is a reasonable possibility that a fraudulent transaction has occurred. Audit and Management Services will also attempt to quantify any losses and make recommendations for improving internal controls.
6.3 Employees and students are required to cooperate fully with those performing investigations. Employees, departments, students, and organizations (i.e., other than those responsible for conducting investigations pursuant to this policy) shall not conduct investigations on their own, since this may compromise official investigations.
6.4 If the University determines that there is a reasonable possibility that a fraudulent transaction has occurred and involves a University employee (including student employees), Audit and Management Services will prepare a letter for the President's signature to report the possible fraudulent transaction to the Auditor of Public Accounts and the State Police in accordance with Section 30-138.A of the Code of Virginia.
6.5 Audit and Management Services will also consult Public Safety for their opinion on whether a reasonable possibility exists that a fraudulent transaction has occurred. Further investigation of the transaction or specific event with the objective of prosecution is the responsibility of Public Safety and the Commonwealth's Attorney. The decision to prosecute is the responsibility of the Commonwealth’s Attorney. Audit and Management Services will assist with further investigation if requested.
6.6 The University may request restitution of funds and take appropriate administrative action. Recovery of funds will be the responsibility of the Assistant Vice President for Finance unless otherwise decided.
6.7 JMU employees (including student employees) may also anonymously report suspicious activities to the State Employee Fraud, Waste and Abuse Hotline (1-800-723-1615), maintained by the Division of State Internal Audit (DSIA). Audit and Management Services may be required to investigate these activities and report findings to DSIA.
6.8 Audit and Management Services will report incidents involving students to Judicial Affairs and, if applicable, Student Organization Services. - RESPONSIBILITIES
Employees and students are responsible for notifying Audit and Management Services of circumstances that suggest that a fraudulent transaction may have occurred.
Audit and Management Services is responsible for performing audit procedures to determine whether there is a reasonable possibility that a fraudulent transaction has occurred. The office is also responsible for preparing letters for the President's signature to report possible fraudulent transactions by employees to the Auditor of Public Accounts and the State Police in accordance with Section 30-138.A of the Code of Virginia. Audit Management Services will report incidents involving students to Judicial Affairs and, if applicable, Student Organization Services.
Public Safety is responsible for performing investigations for the objective of prosecution.
The President is responsible for reporting possible fraudulent transactions by employees to the Auditor of Public Accounts and the State Police in accordance with Section 30-138.A of the Code of Virginia.
- SANCTIONS
Regarding employees (including student employees), sanctions will be commensurate with the severity and/or frequency of the offense and may include termination of employment.
Regarding student organizations, sanctions will be commensurate with the severity and/or frequency of the offense and may include termination of the student organization.
Regarding students, sanctions will be commensurate with the severity and/or frequency of the offense and may include suspension or expulsion.
In addition to the above administrative actions, individuals may also be subject to criminal prosecution.(See 6.4 and 6.5) - EXCLUSIONS
None - INTERPRETATION
The authority to interpret this policy rests with the President, and is generally delegated to the Director of Audit and Management Services.
April, 2004
Dr. Linwood H. Rose, President
Previous Version: April, 2004
Index Terms
Audit
Fraud