BOARD OF SUPERVISORS

County of Linn, Iowa

SUBJECT: Reporting and Investigation of Fraud Directive Number:
or Financial Misconduct

Approval Date: Effective Date: Revision No.: Policy Section & Number:
03/28/07 03/28/07 FM - 001

Reference: Distribution: Auditor’s Office, Employee

Board of Supervisors Minutes of 03/26/07 and Handbook, Intranet
03/28/07

I. 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.

II. 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.

III. 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.

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

V. 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.

VI. 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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