[Code of Federal Regulations]
[Title 32, Volume 1, Parts 1 to 190]
[Revised as of July 1, 1998]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR98.3]

[Page 533-534]
 
                       TITLE 32--NATIONAL DEFENSE
 
              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE
 
PART 98--DEFENSE HOTLINE PROGRAM--Table of Contents
 
Sec. 98.3  Definitions.

    Abuse Intentional or improper use of Government resources. Examples 
include misuse of rank, position, or authority or misuse of resources 
such as tools, vehicles, or copying machines.
    Examination The act of examining, inspecting, inquiry, and 
investigation. For the purposes of the part, the term applies to audit, 
inspection, and investigative activity and encompasses the preliminary 
analysis, inquiry, audit, inspection, and investigation.
    (a) Audit. An independent, objective analysis, review, or evaluation 
of financial records, procedures, and activities to report conditions 
found, and recommend changes or other actions for management and 
operating officials to consider. The term audit includes, in addition to 
the auditor's examinations of financial statements, work performed in 
reviewing compliance with applicable laws and regulations, economy and 
efficiency of operations, and effectiveness in achieving program 
results. All audit work is accomplished in accordance with audit 
standards set forth in ``Standards for Audit in Governmental 
Organizations, Programs, Activities, and Functions,'' issued by the 
Comptroller General of the United States.
    (b) Inquiry. An informal administrative investigation or gathering 
of information through interview or interrogation rather than by 
inspection or study of available evidence. An inquiry does not preclude 
the gathering of available documentary evidence.
    (c) Inspection. A method of assessing the efficiency of management, 
the effectiveness and economy of operations, and compliance with laws 
and directives, with particular emphasis on the detection and prevention 
of fraud and waste.
    (d) Investigation. A systematic, minute, and thorough attempt to 
learn the facts about something complex or hidden. It is often formal 
and official.
    (e) Preliminary Analysis. The activity necessary to determine if the 
allegation or information received warrants further examination, or 
lacks the credibility to merit additional action. The preliminary 
inquiry effort may be limited to interview of the source of the 
complaint and/or a reference provided in the allegation, or review of 
any readily available documentation or records relative to the 
complaint.

[[Page 534]]

    Fraud Any intentional deception designed to deprive the United 
States unlawfully of something of value or to secure from the United 
States for an individual a benefit, privilege, allowance, or 
consideration to which he or she is not entitled. Such practices 
include: making false statements; submitting false claims; using false 
weights or measures; evading or corrupting inspectors or other 
officials; deceit either by suppressing the truth or misrepresenting 
material fact; adulterating or substituting materials; falsifying 
records and books of accounts; arranging for secret profits, kickbacks, 
or commissions; and conspiring to use any of these devices. The term 
also includes conflict of interest cases, criminal irregularities, and 
the unauthorized disclosure of official information relating to 
procurement and disposal matters.
    Independence The state or quality of being free from subjection or 
from the influence, control, or guidance of individuals, things, or 
situations. As applied to examining officials and their respective 
organizations, there is a responsibility for maintaining neutrality and 
exercising objectivity so that opinions, judgments, conclusions, and 
recommendations on examined allegations are impartial and shall be 
viewed as impartial by disinterested third parties.
    Mismanagement A collective term covering acts of waste and abuse. 
Extravagant, careless, or needless expenditure of Government funds or 
the consumption or misuse of Government property or resources, resulting 
from deficient practices, systems, controls, or decisions. Abuse of 
authority or similar actions that do not involve criminal fraud.
    Waste The extravagant, careless, or needless expenditure of 
Government funds, or the consumption of Government property that results 
from deficient practices, systems, controls, or decisions. The term also 
includes improper practices not involving prosecutable fraud.