Vol. 5, ISS.


No Child lEfT BEhiNd fiNaNCial CoMPliaNCE iNSidER® 

MoDEl PolICy

Teach your employees how to report suspected fraud
According to the National Association of Certified Fraud Examiners, audits reveal less than one-third of the discovered cases of fraud or embezzlement. Instead, tips from colleagues and business associates, and accidental discovery of anomalies in documents or behavior lead to investigations in more than half of all prosecuted fraud and embezzlement cases. So it’s important to develop a policy encouraging employees to report their suspicions of financial malfeasance. Here is a model fraud reporting policy, based on policies adopted by districts across the country. Some states have laws that may affect your fraud reporting policy; for example, some states require districts to have anonymous reporting through a hotline. So you can adapt this policy to suit your district’s needs, but be sure to consult your SEA, attorney and auditor before doing so. And remember, these policies are subject to school board approval. n

fraud detection and reporting policy
I. Statement of Principle
The Board of Education expects all officers, employees and contractors of the school district to fulfill the public’s trust and to conduct themselves in an honorable manner, abiding by all applicable laws and regulations and all district policies and regulations. non-district officials, e.g. the superintendent of schools, president of the school board, Office of Internal Audit, state comptroller, or law enforcement, as appropriate].

IV. Investigation
Upon receiving a credible report of alleged wrongful conduct, the school district shall take prompt steps to conduct an investigation. The board shall approve the engagement of special counsel, independent auditors, or other outside contractors, as appropriate in the circumstances, to assist in the investigation. Criminal authorities shall be informed if a crime is suspected.

II. Wrongdoing Defined
When district officers, employees or contractors know or have reasonable cause to suspect a wrongful action on the part of an officer, employee, vendor or contractor of the school district, he must report such information. Such reportable wrongful action includes: •  Theft of district money, property or resources. •  Misuse of authority for personal gain or other non-district purpose, including unauthorized disclosure of confidential or proprietary information to outside parties, and profiteering as a result of insider knowledge of district’s activities or plans. •  Fraud, corruption, conflicts of interest, or abuse by another employee relating to his office, including accepting or soliciting anything of material value from contractors, vendors or others providing services to the district. •  Violations of applicable federal, state and local laws or regulations. •  Serious violations of district policy, regulations and/or procedures.

V. Disclosure
Knowledge of the investigation will be limited until it is complete, to avoid alerting the target that an investigation is underway. When the investigation is final, the investigator shall prepare, and the board shall adopt, a written report of the allegation and investigation and its results. In the event that no evidence of wrongdoing is uncovered, the report may remain confidential.

VI. Whistleblower Protection
No person acting on behalf of the board or the superintendent may: •  Dismiss, or threaten to dismiss. •  Discipline, suspend, or threaten to discipline or suspend. •  Impose any penalty upon. •  Or intimidate or harass any employee, officer or contractor of the district in retaliation for any action taken in good faith and in accordance with the requirements of this policy. n

III. Reporting Wrongdoing
District officers, employees or contractors must report knowledge of, or reasonable suspicions of, wrongdoing to [insert appropriate reporting entity — include one or more

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