10.12 Financial Fraud

Examples of financial fraud include, but are not limited to:

• Embezzlement, theft, or other irregularities;
• Misappropriation, misapplication, unauthorized removal, or concealment of University property;
• Forgery, falsification, or alteration of documents and/or any other public record or information such as accounting records, checks, deposit tickets, promissory notes, travel expense reports, contracts, purchase orders, electronic files, etc. with the intent to obtain an unauthorized financial benefit;
• Deviations from standard procedures in the handling or reporting of cash, cash equivalents, securities, or financial transactions (including procurement card transactions) with the intent of obtaining personal benefit;
• Theft or misappropriation of cash, cash equivalents, securities, supplies, inventory, or any other University assets including tools, furniture, fixtures, equipment, library materials, vehicles, trade secrets, or other intellectual property;
• Authorizing payment to vendors when it is known that goods were not received or services were not performed;
• Falsification of work, employment, or time and attendance records with the intent to obtain an unauthorized financial benefit;
• Misuse of University facilities, vehicles, telephones, mail system, or computer equipment in violation of University policy with the intent to obtain an unauthorized financial benefit;
• Violation of University purchasing procedures and requirements with the intent to obtain an unauthorized financial benefit;
• Unauthorized manipulation of University data or records;
• Requiring University personnel to perform work or provide services with the intent to obtain unauthorized or improper financial or personal benefit;
• Engaging in bribery, kickbacks, or seeking unauthorized rebates with the intent to obtain an unauthorized financial benefit;
• Accepting money for research or gifts on behalf of the University or as part of University activities except as prescribed by University policy; and
• Actions related to concealing or perpetuating the aforementioned activities. 

Internal controls are policies and procedures managers use to protect assets, promote efficient operations, ensure reliable accounting, and urge adherence to University policies. 

Policy Statement

1. It is violation of University policy for any employee to engage in financial fraud as defined above.
2. It is a violation of University policy to engage in official misconduct as outlined in Chapter 721 of the Code of Iowa. 

3. Administrators and managers are responsible for establishing, utilizing, and enforcing reasonable internal control policies, practices, and procedures designed to reduce the potential for financial fraud.  Consideration should be given to the following principles of internal control:  establishment of  responsibility, ensuring reliable financial reporting, protecting assets, separating recordkeeping from custody of assets, dividing responsibility for related transactions, applying technological controls, performing regular and independent reviews, and ensuring compliance with applicable laws and regulations.  The University will utilize all reasonable internal controls to monitor and control the use of University assets, and thereby reduce the potential for financial fraud.

   Administrators and managers should be familiar with the risks and exposures in their areas of responsibility and be alert to any indications of financial fraud.

4. Employees are responsible for safeguarding University resources under their control and for ensuring that those resources are used only for authorized purposes and in accordance with University rules and policies and applicable federal and state laws.
   Employees are responsible for ensuring that all funds provided for research and other functions or activities supported through external gifts, grants, or contracts are spent in ways consistent with the funding documents and in compliance with sponsoring organization’s guidelines on allowable costs.  Likewise employees are responsible for ensuring that all funds provided through gifts or grants received by the UNI Foundation are spent in ways consistent with the gift or funding documents.
   Employees with budget authority are responsible for ensuring that funds under their control are expended for a public purpose in accordance with departmental objectives. 
5. The University Controller is the designated University official to report suspected financial fraud to the State Auditor’s Office for investigation as required by Section 11.6(7) of the Code of Iowa.  If the State Auditor’s Office finds evidence of financial fraud or other illegal acts, a copy of the State Auditor’s written report will be supplied to the County Attorney and Attorney General’s Office for possible criminal prosecution.
6. Management and staff should not confront the individual under suspicion or initiate investigations on their own, as such actions could compromise any ensuing investigation. 
7. The University will take appropriate disciplinary action and legal action against employees who commit financial fraud.  This may include discipline up to and including termination. 
8. The University’s Retaliation and Misconduct Reporting policy (13.19) prohibits adverse actions to employees making good faith reports. 
9. University employees are expected to comply with the Code of Business and Fiduciary Conduct as codified in Section 2.2(2.) of the Board of Regents, State of Iowa Policy Manual. 

Procedures

The University seeks the cooperation of all employees who have reason to believe, or have knowledge indicating financial fraud could be occurring.  Reports about financial fraud should be made to the Senior Vice President for Administration and Financial Services, the University Controller, Internal Audit staff, or  through  Ethics  Point,  the  University’s  confidential  reporting  service,  by  calling

1-866-384-4277 or using the Ethics Point web site: https://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=10957.

Senior Vice President for Administration and Financial Services, approved June 18, 2015
President’s Cabinet, approved November 9, 2015
President and Executive Management Team, approved December 14, 2015