Anti-Fraud Policy
Introduction
The Comptroller of Public Accounts has established an anti fraud policy to enforce controls and to aid in the prevention and detection of fraud, theft, waste, or abuse against the agency. This policy applies to any fraud, theft, waste, or abuse or suspected fraud, theft, waste, or abuse involving an employee (including management), a consultant, vendor, contractor, outside agency, or person doing business with the agency or in any other relationship with the agency.
The Texas Comptroller of Public Accounts does not tolerate any type of fraud, theft, waste or abuse. The agency's policy is to promote consistent, legal, and ethical organizational behavior by:
- assigning responsibility for reporting fraud, theft, waste or abuse;
- providing guidelines to conduct investigations of suspected fraudulent behavior;
- requiring each employee to attend annual fraud awareness training.
Failure to comply with this policy subjects an employee (including management) to disciplinary action, including immediate termination. Failure to comply by a consultant, vendor, contractor, outside agency, or person doing business with the agency or in any other relationship with the agency could result in cancellation of the business or other relationship between the entity and the agency.
The Texas Comptroller of Public Accounts will pursue prosecution if the results of an investigation indicate the possibility of criminal activity.
For purposes of this policy only the term fraud or fraudulent includes theft, waste, and abuse as defined below. The term employee includes employees in management positions. The term management includes directors, managers, assistant managers, supervisors and any other employee who has authority to sign another employee's performance evaluation.
Definitions and Examples of Fraud, Waste, and Abuse
Fraud is defined as an intentional deception designed to obtain a benefit or advantage or to cause some benefit that is due to be denied. Examples of fraud include:
- Forgery or alteration of a check, bank draft, or any other financial document;
- Theft of a check or other diversion of a taxpayer payment;
- Misappropriation of funds, securities, supplies, or other assets;
- Impropriety in the handling or reporting of money or financial transactions;
- Profiteering as a result of insider knowledge of agency operations;
- An employee with access to confidential taxpayer information who sells this information or uses it in the conduct of an outside business activity;
- Disclosing to others the securities activities engaged in or contemplated by the agency.
Waste is the loss or misuse of state resources that results from deficient practices, system controls, or decisions. An example of waste is not taking advantage of available early bird conference registration discounts.
Abuse is the intentional, wrongful, or improper use of resources or misuse of rank, position, or authority that causes the loss or misuse of resources, such as tools, vehicles, computers, copy machines, etc. Examples of abuse include:
- Using state equipment or supplies to conduct personal business;
- An employee using non-confidential taxpayer information to get new customers for his/her outside business.
Theft is defined as the act of taking something from someone unlawfully. An example of theft is taking home a printer belonging to the agency and keeping it for personal use.
Responsibility to Report Suspected Fraud
Each employee is required to report any suspected fraud, theft, waste or abuse or other dishonest conduct to the employee's management or to the Ethics Officer.
Management is required to report suspected fraud, theft, waste or abuse or other dishonest conduct, including reports from employees or other individuals, to the Ethics Officer.
Management does not have the authority to determine the merits of a report of suspected fraud - the Ethics Officer makes this determination with the assistance of Internal Audit and the Criminal Investigations Division, as provided by this policy.
The identity of an employee or complainant who reports suspected fraud will be protected to the full extent allowed by law. (See: Responsibilities of Ethics Officer.)
Suspected improprieties and/or misconduct concerning an employee's ethical conduct should be reported to division management or the Ethics Officer. Note that there are many instances of prohibited actions that do not rise to the level of fraud, such as an improper relationship with a vendor.
Guidelines for Handling a Report of Suspected Fraud, Theft, Waste, or Abuse
Whether the initial report is made to management or the Ethics Officer, the reporting individual should receive the following instructions and information:
- Do not contact the suspected individual in an effort to determine facts or demand restitution.
- Allow the Ethics Officer to conduct the investigation. Do not further investigate the allegations.
- Observe strict confidentiality. Do not discuss the case, facts, suspicions, or allegations with anyone unless specifically asked to do so by the Ethics Officer, the Criminal Investigations Division or the General Counsel Division.
- Retaliation will not be tolerated. The agency will not tolerate any form of retaliation against individuals providing information concerning fraud or suspected fraud.
- Every effort will be made to protect the rights and the reputations of everyone involved, including the individual who in good faith alleges perceived misconduct as well as the alleged violator(s). (See: Disciplinary Action for the consequences of making a report of fraud in bad faith.)
- The identity of an employee or other individual who reports a suspected act of fraud will be protected as provided by this policy. (See: Responsibility to Report Suspected Fraud.)
Responsibility of Ethics Officer
On receiving a report of suspected fraud, the Ethics Officer shall document the contact and conduct a preliminary investigation to determine the credibility of the report. If the report is credible, the Ethics Officer shall follow the investigation guidelines provided in this policy. (See: Guidelines for the Investigation of Suspected Fraud.)
The Ethics Officer shall make every effort to protect the rights and the reputations of everyone involved in a report of suspected fraud, including the individual who in good faith alleges perceived misconduct, as well as the alleged violator(s). The Ethics Officer also shall make every effort to protect the identity of a person who in good faith reported the suspected fraud. However, disciplinary action may be taken as provided by this policy if a report is made in bad faith (see: Disciplinary Action).
On determining that a report is not credible or is not a report of fraud, the Ethics Officer shall document this determination. The Ethics Officer's documentation shall include support for the determination. The Ethics Officer will refer questions as to whether an action constitutes fraud to the Internal Audit Division and the Criminal Investigation Division.
In addition to reporting each suspected fraud to Internal Audit, the Ethics Officer is responsible for reporting confirmed fraud to the State Auditor's Office in the manner required by state law.
The Ethics Officer is responsible for the administration, revision, interpretation, and application of this policy.
Guidelines for the Investigation of Suspected Fraud
The Ethics Officer is responsible for the full investigation and documentation of suspected fraud.
The Ethics Officer has primary responsibility for the investigation of reported wrongdoing and all suspected fraud and for coordinating investigative activities with the agency's Anti-Fraud Coordinator, the General Counsel, the Criminal Investigation Division, and Internal Audit Division. Each employee involved in an investigation of suspected fraud shall keep the content of the investigation strictly confidential to the full extent provided by law. Investigation results shall not be disclosed or discussed with anyone other than those who have a legitimate need to know.
Any required investigative activity shall be conducted without regard to the suspected wrongdoer's length of service, position/title, relationship to the agency, or any other perceived mitigating circumstance.
The Ethics Officer shall maintain appropriate documentation regarding incidents of fraud. The Ethics Officer shall develop and maintain guidelines for access to and security of this documentation.
If an investigation substantiates fraudulent activities, the Ethics Officer will prepare an incident report to the agency's executive management, the Anti-Fraud Coordinator, Criminal Investigation Division, Internal Audit Division, the General Counsel Division, and the Director of the division in which the fraud occurred. The Ethics Officer shall prepare the report as soon as possible after the fraud is confirmed and shall document the content of the investigation, the findings, and any disciplinary action taken as a result of the finding.
Any inquiries from the suspected individual, his or her attorney/representative, or any other inquirer shall be directed to the Ethics Officer. If necessary, the Ethics Officer will refer these inquiries to the appropriate division.
Disciplinary Action
Failure to comply with any part of this policy is grounds for disciplinary action, including immediate termination.
An employee who:
- has engaged in any form of fraud, waste, or abuse;
- suspects or discovers fraudulent activity and fails to report his or her suspicions as required by t this policy (See: Responsibility to Report Suspected Fraud); or
- intentionally reports false or misleading information
is subject to disciplinary action, including termination.
Any member of management who does not pass to the Ethics Officer each and every report of suspected fraud made by an employee or other person is subject to disciplinary action, including immediate termination.
Fraud Awareness Training
Each employee is required to attend at least one session of Fraud Awareness Training during each fiscal year. After attending the training, the employee must sign a form indicating that they have attended the training and understood its content.
Annual Report
Incidents of suspected fraud determined by the Ethics Officer to have merit shall be reported to executive management on an annual basis. The annual report shall include: whether the report was from an employee; the determination of merit; whether a full investigation was conducted and if so, the results of the investigation; the disciplinary action, if any resulting from the investigation; whether the report was referred to an outside entity and if so, the current status or final results of the referral.
The annual report shall also be provided to the General Counsel, Internal Audit Division, and the Criminal Investigations Division.