County of Linn, Iowa
or Financial Misconduct
Approval Date: 03/28/07

SUBJECT: Reporting and Investigation of Fraud
Effective Date: 03/28/07 Revision No.:

Directive Number:

Policy Section & Number: FM - 001

Reference: Board of Supervisors Minutes of 03/26/07 and 03/28/07

Distribution: Auditor’s Office, Employee Handbook, Intranet


PURPOSE The purpose of this policy is to define employee and management responsibility for reporting fraud or potential fraud and to establish procedures for addressing wrongful conduct. POLICY All employees of Linn County have the responsibility to ensure that County funds and resources are used only in activities that support the mission of the County; to protect County funds and resources from theft, misuse, misappropriation and other conduct that may be injurious to the financial welfare and reputation of the County; and, to ensure the integrity of the County’s financial records through accurate reporting. SCOPE This policy is applicable to all Linn County departments and employees or relatives, friends, or associates from or through activities and transactions related to the business of Linn County. DEFINITIONS AND EXAMPLES Financial misconduct refers to any intentional misuse or conversion of County property or resources to acquire financial gain. Financial misconduct typically involves theft, forgery, or embezzlement. Examples of financial misconduct include but are not limited to: • Falsification of records related to financial transactions funded by external agencies (such as Medicaid) • Falsification or alteration of various records related to accounting and financial reporting • Falsification or alteration of records related to employee tax reporting and employee benefit plans • Alteration of records including financial reports, attendance and timekeeping reports • Submission of fraudulent business expenses for reimbursement • Acceptance or offering of bribes, kickbacks, or rebates




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• V.

Theft, destruction, or misappropriation of funds, securities, supplies, inventory or any other asset

COMPLIANCE OFFICE The Compliance Office is responsible for investigating and resolving all reported complaints and allegations concerning fraud or financial misconduct. Compliance Officer – The Finance Director is designated as the Compliance Officer. In the event the Finance Director is unavailable, the Budget Director assumes those responsibilities. The Compliance Office telephone number is 892-5010.


PROCEDURES Reporting Potential Financial Misconduct When financial misconduct is suspected or uncovered, it should be reported promptly and in a confidential manner to the Compliance Officer. To report known or suspected financial misconduct, contact the Compliance Officer. If the potential misconduct is that of the Compliance Officer, initial contact should be with the County Attorney and not the Compliance Officer. Elected officials or department heads who receive reports of potential misconduct from any member of their staff are required to contact the Compliance Officer. All are advised to refrain from conducting an investigation on their own, or from taking any action to resolve the irregularity before contacting the Compliance Officer. All information regarding known or suspected financial misconduct is deemed privileged and confidential. To the extent possible, the County will protect the identity of both those who alert the County to any irregularity and those suspected of wrongdoing. Investigation of Potential Financial Misconduct All reports of potential financial misconduct will be promptly reviewed by the Compliance Officer. The Compliance Officer will evaluate necessary records and information to verify the validity of the reports and make a preliminary determination whether an investigation is warranted. When an investigation is in process, all departments are required to respond promptly to inquiries initiated by the Compliance Officer and to provide access to relevant records. The Compliance Officer will develop a risk assessment giving due consideration to the extent of possible financial consequences, any regulatory

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compliance issues compromised, and any external reporting obligations that may be necessary. Based on the risk assessment, the Compliance Officer will provide interim reports to the Board of Supervisors as the investigation progresses. The Compliance Officer focuses investigations on financial matters but will, when necessary, coordinate with the County Attorney, County Sheriff, Human Resources Director, or any appropriate external agencies. Reporting Results The Compliance Officer will prepare a report at the conclusion of the investigation that will summarize issues investigated, procedures followed, conclusions reached and recommended actions to be taken. The report will be provided to the Board of Supervisors. The report will provide a plan of corrective action to safeguard against recurring losses. The conduct and outcome of all investigations that result in the finding of financial misconduct will be reported to the County’s external audit firm and any appropriate outside agency. Disciplinary Action When disciplinary action is being considered, departments are advised to contact the Human Resources department to ensure compliance with collective bargaining agreements and County personnel policies. Human Resources must be informed of any disciplinary action being considered to also ensure that employee rights related to compensation and benefits are protected and reasonable employee relations are maintained. Legal Action When legal action may be required, the Compliance Officer will consult with the County Attorney. Only the County Attorney is authorized to respond to any requests from any legal office, as well as to subpoenas and other notices from state and federal judiciary offices.

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