Suspected Fraud or Irregular Activities, Procedures for
December 05, 1997
This procedure item applies to:
For the purpose of these procedures, suspected fraudulent or irregular activities would be those instances where a public servant intentionally uses or abuses his/her position to obtain or withhold the property of the State, State University or a related entity.
These procedures cover state operations, auxiliary services corporations, student activity fee funds, and local campus foundations. The Research Foundation of State University of New York has a separate policy for notification and investigation of suspected fraudulent activities.
Generally, all potential defalcations expected to exceed $1,000 are subject to the notification requirements set forth in section III of these procedures. These notification requirements are also applicable in those instances where the dollar amount is insignificant but the type of conduct warrants an investigation. A campus under “special circumstances” would make such referrals.
Management is responsible for detecting improprieties. Each manager should be familiar with the types of improprieties that might occur in her/his area and be alert for any indication that such a defalcation, misappropriation or irregularity is or was in existence in the manager’s area. As soon as an impropriety is suspected, it should be promptly reported. Each campus should identify one management employee to whom such improprieties should be reported.
When sufficient facts and circumstances exist to create a reasonable suspicion that fraud has occurred, or where an investigation has commenced, a designated campus officer should forward a written detailed report on the incident concurrently to the office of the vice chancellor/chief of staff and the office of the university auditor. The report must identify applicable rules, regulations, and procedures that were violated (see Form A – Fraud Incident Report).
During the initial stages of the inquiry into the suspected fraudulent and/or irregular activities, a determination should be made jointly by campus and system administration management, as to whether the matter warrants reporting to the office of the state comptroller, in accordance with Volume XI, Section 7.0200 of the New York State Accounting System User Procedure Manual.
Upon review of the suspected irregularities or improprieties by the appropriate offices within system administration, a determination will be made as to the type of investigation and by whom the investigation shall be conducted. After appropriate input, the office of the university auditor, in consultation with the vice chancellor/chief of staff, shall determine whether the investigation should be conducted internally, by a standing fraud investigation committee, or externally, by an independent auditor, consultant, or an outside law enforcement agency. Generally, appropriate campus personnel will be involved in all investigations relating to campus activities. These procedures address investigations that are conducted by the internal fraud investigation committee.
The fraud investigation committee will be coordinated by the office of the university auditor. Depending on the particular situation, the composition of the team may include representation from the following offices:
University counsel will provide advice on legal matters and will serve as liaison between the University and external agencies such as attorney general/district attorney. This office will also provide input regarding the Public Officers Law and the Ethics in Government Act.
The office of employee relations will provide technical expertise regarding the various responsibilities and obligations that may be applicable in each case under the pertinent collective bargaining agreements. In particular, this office will provide specific information regarding interactions with bargaining unit employees and their representatives, such as but not limited to, disciplinary interrogations.
The university police will assist in the fraud investigation by utilizing its contacts with local police, other law enforcement agencies, and local merchants to gather pertinent information. The office will provide suggested criminal investigation procedures and, when necessary, obtain assistance from university police and public safety departments and external law enforcement agencies.
Although the office of the university auditor will be responsible for auditing financial matters, in certain situations the resources of campus internal auditors may be utilized to assist in the investigation process at their respective campus.
A. During the initial meeting discussions, the suspected fraud and/or irregularities should be reviewed and the specific roles of the team representatives defined. Information regarding the activities should be discussed.
B. During the course of the investigation, periodic meetings should be scheduled to discuss the progress of the investigation.
C. Preliminary report of the investigation should be prepared and shared with the fraud investigation team and other appropriate campus and system administration officials.
D. Finalize the investigation report and share with appropriate campus and system administration officials.
Upon completion of the investigation, a determination will be made as to whether the review is conclusive and the results thereof should be forwarded to appropriate law enforcement agencies for final disposition. The office of the university counsel will make a recommendation as to the appropriate referral entity (i.e. local district attorney, office of the attorney general, etc.) and will take the necessary steps to effect that referral.
Form A - Fraud Incident Report
There are no related procedures relevant to this procedure.
Reporting Thefts/Losses, Procedures for
The following link to FindLaw's New York State Laws is provided for users' convenience; it is not the official site for the State of
(Duties of the comptroller.)
In case of questions, readers are advised to refer to the New York State Legislature site for the menu of New York State Consolidated.
New York State Accounting User Procedures Manual, Volume XI, Section 7.0200.
There are no appendices relevant to this procedure.