Suspected Dishonest or Fraudulent Activities

Handbook of Operating Procedures 3-1021

Suspected Dishonest or Fraudulent Activities

I. Policy Statement 

The University of Texas at Austin (“University”) prohibits fraudulent and dishonest behavior by members of the University community and University affiliates. It is the policy of the University to prevent and detect dishonest and fraudulent activities and consistently investigate suspected cases brought to the attention of University officials.

II. Reason for Policy 

To provide administrative steps to promptly identify and investigate suspected cases of dishonest or fraudulent activities, demonstrating expectations of ethical behavior from members of the University community and University affiliates.

III. Scope & Audience 

This policy applies to University employees, students, and affiliates. It assigns responsibilities to specific University employees involved in handling suspected cases of dishonest or fraudulent activities.

IV. Definitions (specific to this policy) 
Affiliates:

Individuals who have a business relationship with the University outside of traditional employment. They can be paid or unpaid, and include but are not limited to, affiliations associated with research, visiting scholars, employees of contractors and volunteers. A more complete listing can be found at the HR website at http://www.utexas.edu/business/erp/hrms/help/UniversityAffiliateTypes.php.

Dishonest or Fraudulent Activities:

May include, but are not limited to, any or all of the following situations whether in tangible, paper or digital form as applicable:

 

  • Misappropriation of University property or other fiscal irregularities.

 

  • Forgery or inappropriate alteration of checks, drafts, promissory notes, or securities.

 

  • Forgery or inappropriate alteration of employee benefit or salary-related items such as time sheets, billings, claims, surrenders, assignments, or changes in beneficiary.

 

  • Forgery or inappropriate alteration of records relating to health.

 

  • Forgery or inappropriate alteration of student-related items such as grades, transcripts, loans, or fee/tuition documents.

 

  • Forgery or falsification of any official University document.

 

  • Misappropriation of funds, securities, supplies, or any other state asset.

 

  • Illegal or fraudulent handling or reporting of money transactions.

 

  • Acceptance or solicitation of any gift, favor, or service that might reasonably tend to influence the employee in the discharge of his or her official duties.

 

  • Willful and unauthorized destruction of records, furniture, fixtures, or equipment.
V. Website (for policy) 
https://policies.utexas.edu/policies/hop/3-1021
VI. Contacts 
Contact Details Web
Office of Internal Audits Phone:512-471-7117 Fax:512-471-8099Website:
Compliance & Ethics Hotline Phone:1-877-507-7321 (Available 24 hours a day, 365 days a per year. Allows anonymous reporting with confidentiality maintained within confines of the law.)Website:
State Auditor's OfficePhone:1-800-TX-AUDIT (892-8348)Website:
VII. Responsibilities & Procedures 

A. Responsibilities

 

  1. Department management must:
  1. Establish and maintain a system of internal controls which provides reasonable assurance improprieties are prevented and detected.
  1. Be familiar with the types of improprieties which might occur in his or her area and be alert for any indication of dishonest or fraudulent activity.
  1. Assure notification is made to an appropriate University official and to the Office of Internal Audits when dishonest or fraudulent activity is suspected.
  1. Support the University’s fiduciary responsibilities and cooperate with law enforcement agencies in the detection, investigation, and reporting of criminal acts, including prosecution of offenders.
  1. Maintain the confidentiality of information regarding suspected cases of dishonest or fraudulent activity under investigation to the extent permitted by law.
  1. Maintain paper and electronic records in accordance with the University’s records retention schedule.
  1. Office of Internal Audits must:
  1. Ensure a link to the State Auditor’s Office Fraud Hotline is included on the homepage of the University’s website.
  1. Coordinate and or work with The University of Texas Police Department (“UTPD”) and the Vice President for Legal Affairs to provide assistance to federal, state, and local law enforcement agencies.
  1. Assist UTPD in investigations of suspected criminal activity that require accounting or auditing knowledge.
  1. Secure and limit access to investigative work papers to those individuals or entities designated by the Director of Internal Audits.
  1. Maintain the confidentiality of information gathered regarding dishonest or fraudulent activity under investigation to the extent permitted by law.
  1. Determine if additional work is needed in order to provide the University’s Internal Audit Committee and appropriate University officials with a basis for taking corrective action following notification of a related investigation.
  1. As delegated by the Office of the President, notify the State Auditor’s Office of suspected fraud or dishonest activity related to the operation of the University. The Office of Internal Audits shall report the reason and basis for the alleged fraud to the state auditor as required by Texas Government Code Chapter 321, Sec. 321.022.
  1. Coordinate with the Chief Information Security Officer or any other University office necessary to sufficiently investigate suspected dishonest or fraudulent activity.
  1. Supervise all audits of allegations of defalcation, misappropriation, and other fiscal irregularities.
  1. The Director of Internal Audits must:
  1. When appropriate, notify the President, UTPD, the Vice President for Legal Affairs, and the UT System Chief Audit Executive when the investigation of an allegation reveals suspected criminal activity which may constitute a felony offense. The President, or his or her designee, is responsible for notifying the UT System Executive Vice Chancellor for Academic Affairs.
  1. Consult with the Vice President for Legal Affairs about all requests for information and assistance related to investigations conducted by federal, state, and local agencies.
  1. Consult with the Associate Vice President for Human Resource Services or his or her designee about an investigation when appropriate.
  1. The University of Texas Police Department (UTPD) must:
  1. Coordinate investigations of all suspected criminal cases involving Financial and Administrative Services.
  1. Coordinate assistance provided to federal, state, and local law enforcement agencies as required by the Office of the Vice President for Legal Affairs.
  1. Notify UT System Director of Police about criminal cases as required by UT System Policy UTS118.
  1. The Vice President for Legal Affairs must:
  1. Advise on legal issues associated with investigations and subsequent actions.
  1. Notify the UT System Office of General Counsel about issues related to 5.a above when appropriate.
  1. Chief Information Security Officer must:

Collect, secure, and preserve relevant University digital data such as transaction, access, authentication, and system logs, emails, and electronic files in anticipation of a legal request, upon request from a University official.

 

  1. Employees must:
  1. Notify University officials or call the Ethics and Compliance Hotline (1-877-507-7321) to report any suspected dishonest or fraudulent activity involving University activities or property.
  1. Not knowingly make incorrect or false accusations.
  1. Avoid alerting suspected individuals an investigation is underway.
  1. Cooperate fully with any investigation conducted by the University including but not limited to UTPD, the Office of Internal Audits, the Information Security Office or with federal, state, and local law enforcement agencies as directed by the Office of the Vice President for Legal Affairs.

B.  General Procedures

 

The procedures set forth in this section apply to suspected incidents of dishonest or fraudulent activity.

 

  1. Notification Responsibilities

Under Section VII.A above, certain individuals must make notifications under this policy.  These individuals and their assigned notification responsibilities are outlined in Appendix A - Notification Responsibilities for Suspected Dishonest or Fraudulent Activity. This appendix includes the nature and timing of the notification required.

 

  1. Allegations involving scientific misconduct will be handled in accordance with the University HOP 7-1230Misconduct in Science and Other Scholarly Activities.
  1. The University will vigorously pursue steps to recover any losses resulting from dishonest or fraudulent activities.
  1. The Office of Internal Audits must be made aware of all suspected cases of dishonest or fraudulent activity. When an investigation reveals suspected criminal activity or is initiated due to an allegation of criminal activity, UTPD must be notified immediately. 
  1. Coordination with External Law Enforcement Agencies

As noted in Sec. VII.A above, University officials must coordinate assistance provided to federal, state and local law enforcement agencies.

 

  1. All requests for information or assistance from such agencies received by other areas of the University shall be immediately forwarded to UTPD.
  1. UTPD shall consult with the Office of the Vice President for Legal Affairs for determination and appropriate handling of the request.
  1. All appropriate assistance will be given to law enforcement agencies when properly requested.   
  1. Criminal Investigations

UTPD must coordinate investigations of suspected criminal activity to assure appropriate investigatory techniques are used should the case result in a decision to pursue criminal prosecution. The Office of Internal Audits shall assist UTPD in investigations of suspected dishonest or fraudulent activity which require accounting or auditing knowledge.  The Chief Information Security Officer shall assist UTPD in investigations of suspected dishonest or fraudulent activity which require specialized knowledge of or access to the University’s network, computers or other information systems. 

 

  1. Employees, students, and the general public may directly contact the Director of Internal Audits, the University Compliance Services Director, Chief of Police of UTPD, Associate Vice President of Human Resource Services, or other University management whenever an activity is suspected to be dishonest or fraudulent. Individuals receiving such reports shall retain the anonymity of the reporting party subject to the extent allowable by law.

 

C.  Audits/Investigations

 

  1. Final audit reports revealing violations of the Penal Code shall be issued after consultation between UTPD, Office of Internal Audits, and the Office of the Vice President for Legal Affairs and in cooperation with the prosecutor.
  1. The Office of Internal Audits must keep its work papers secure and limit access to those individuals or entities designated by the Director of Internal Audits and the Office of the Vice President for Legal Affairs.
  1. Investigations of suspected improprieties or irregularities shall be conducted by the University in a manner to avoid false accusations or to avoid alerting suspected individuals an investigation is underway. Accordingly, the person who made the report should not
  1. Contact suspected individual to determine facts or demand restitution; or
  1. Discuss any facts, suspicions, or allegations associated with the case with anyone, unless specifically directed to do so by the Office of Internal Audits, University Compliance Services, UTPD, or the Office of the Vice President for Legal Affairs.
  1. All inquiries from the suspected individual or his or her representative or attorney shall be directed to the Office of the Vice President for Legal Affairs.
  1. Confidentiality of those reporting dishonest or fraudulent activities will be maintained to the extent permitted by law, including but not limited to the applicable provisions of the Texas Public Information Act. An exception will occur when an individual is required to serve as a witness in legal proceedings.
  1. The Director of Internal Audits has the discretion to stop the audit if the investigation fails to detect criminal activity or upon advisement from the Office of the Vice President for Legal Affairs. For criminal investigations conducted by UTPD, only prosecutors have the authority to make the legal determination regarding whether to pursue a criminal prosecution or terminate further investigation.
  1. The results of audits or investigations may not be disclosed or discussed with anyone other than authorized representatives of law enforcement or regulatory agencies and those persons associated within the University who have a legitimate need to know such results in order to perform their duties and responsibilities, subject to the provisions of state and federal law, including but not limited to the Texas Public Information Act.  

D.   Operational Audit Findings

 

The Office of Internal Audits will work with management to assist in addressing issues uncovered during the investigation that may demonstrate internal control weaknesses or areas requiring auditing or management attention.

 

E.  Non Retaliation

 

The University prohibits and does not tolerate retaliation against any individual who in good faith files a complaint of suspected illegal, dishonest, or fraudulent conduct or is involved as a witness or participant in the complaint or investigation process.

Engaging in unlawful retaliation may result in disciplinary action, up to and including dismissal from the University. An individual who files a complaint that the individual knows or believes to be false is not protected by this provision against retaliation, and may be subject to disciplinary action up to and including dismissal from the University.

The University encourages any person, who believes he or she has been subject to unlawful retaliation, or observes or is otherwise aware of an incident of unlawful retaliation in violation of this policy, to report the incident promptly to the Compliance and Ethics Hotline as referenced in Section VI-Contacts above.  

 

Appendix A Notification Responsibilities for Suspected Dishonest or Fraudulent Activity

VIII. Forms & Tools 

UT Internal Audits Fraud Hotline

 

State Auditor’s Office

State Auditor’s Office Hotline: 1-800-TX-AUDIT (892-8348)

 

University Compliance Services

XI. History 

Last reviewed date: May 31, 2013
Next scheduled review date: May 2015
 

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