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UW Policy Directory

APS 47.4 – University Restitution Process for Financial Losses or Irregularities

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(Approved by the Provost and Executive Vice President by authority of Executive Order No. 4; the Senior Vice President for Finance and Facilities by authority of Administrative Order No. 9; and the Vice President for Human Resources by authority of Executive Order 9)

(Note: In this policy statement the term restitution means repayment to the University by an employee or student for monetary losses due to financial irregularities.)               

1.  Suspected Financial Irregularities

University employees are encouraged to report suspected financial irregularities to the University’s Department of Internal Audit (Internal Audit) as described in Administrative Policy Statement 47.10, “Policy on Financial Irregularities and Other Related Illegal Acts.”

2.  Initial Notification of Suspected Loss

Upon being informed of a suspected financial loss, Internal Audit immediately sends written notice concerning the type of loss, the estimated magnitude of loss, and the suspect individual’s name to the following units:

  • University Police Department;
  • State Auditor’s Office;
  • The UW Division of the Attorney General’s Office;
  • The Office of Risk Management (if $5,000 or more);
  • One of the following units, depending upon the suspect individual’s University status:
    • The appropriate Human Resources Office, if the suspect individual is a staff employee;
    • The Provost’s Office, if the suspect individual is a faculty or academic staff member; or
    • The Office of Student Life, if the suspect individual is a student or student employee.
  • The affected department.

Additionally, the Office of Risk Management notifies the University’s crime bond carrier if the suspect individual is an employee, and sends a copy of this restitution policy statement to the appropriate manager in the affected department.

3.  Internal Audit Investigation

Internal Audit investigates and issues a report with findings regarding whether a financial loss has occurred, an estimate of the loss, and recommended procedural changes to prevent future losses. Internal Audit distributes the report to the offices listed in Section 2 of this policy statement, as well as other parties that need to know this information in the course of conducting University business (such as the Grant and Contract Accounting Office).

4.  Criminal Prosecution

The University Police Department evaluates the case for possible prosecution and forwards the relevant information to the King County Prosecutor’s Office. The University Police Department informs the Office of Risk Management, Internal Audit, and the relevant office: Human Resources Office, Provost’s Office, or Office of the Vice President for Student Affairs, about the status of the case—whether the case is accepted for prosecution, and the date and amount of any judgment entered against the suspect individual.

5.  Disciplinary Action

  1. If the Suspect Individual Is an Employee

    When the suspect individual is a University employee, either a faculty or staff member, the relevant office (Human Resources Office or the Provost’s Office) coordinates with the employing unit to evaluate the case for disciplinary action and implement any appropriate action. The appropriate Human Resources Office or the Provost’s Office informs the Student Fiscal Services, Receivables Unit, of any action affecting the individual’s salary or employment status, such as pay reduction, termination, or resignation.
  2. If the Suspect Individual Is a Student or Student Employee

    If the suspect individual is a student or student employee, the Office of Student Life evaluates the case for disciplinary action or other appropriate action under the Student Conduct Code (Chapter 478-121 WAC).

6.  Settlements

  1. The Restitution Process

    Student Fiscal Services, Receivables Unit, has been designated the authority to coordinate settlements under this policy statement on behalf of the University and to coordinate the restitution collection process. The restitution process occurs concurrent with possible criminal prosecution and the employee/student disciplinary proceedings. In coordinating the restitution process, the Student Fiscal Services, Receivables Unit, takes the following actions:
    1. In consultation with Internal Audit and the affected department, verifies the gross amount owed.
    2. In consultation with the Controller’s Office or Grant and Contract Accounting Office (for grants), verifies that the affected department has selected an appropriate account for deposits of restitution payments.
    3. In consultation with the affected department, verifies that all state or federal grants affected by the financial irregularity and loss have been properly credited.
    4. If the financial loss included wages, forwards the relevant information to the Payroll Office for calculation of net amount owed.
    5. If benefits were included in wages, forwards the relevant information to the Benefits Office for calculation of net amount owed.
    6. In consultation with Internal Audit, determines audit costs incurred by the University and the State Auditor’s Office as a result of the review of the reported financial irregularities or losses.
    7. Determines the proposed settlement amount based upon the previous consultations and calculations.
    8. Discusses the proposed settlement amount and acceptable terms with the affected department.
    9. Seeks legal advice about the settlement amount and proposed terms with the UW Division of the Attorney General’s Office, as needed.
    10. If a draft restitution agreement or promissory note has been prepared for negotiation purposes, forwards these documents to the Assistant Attorney General representing the State Auditor’s Office as well as the State Auditor’s Office, along with a copy of the audit report (if applicable). For informational purposes, a copy of the transmittal letter/email to the Assistant Attorney General representing the State Auditor should also be sent to an Assistant Attorney General with the UW Division of the Attorney General’s Office.

      Note: Pursuant to RCW 43.09.330, no settlement or compromise of a claim resulting from a financial irregularity may be made without approval and consent of the Attorney General and the State Auditor.
    11. After receiving approval from the Assistant Attorney General representing the State Auditor’s Office and the State Auditor’s Office, contact the suspect individual regarding settlement and repayment options under the restitution plan either in person or via certified mail.
    1. If a Settlement Is Reached—Student Fiscal Services, Receivables Unit, takes the following actions when a settlement is reached:
      1. Prepares the final restitution agreement or promissory note, which is to include:
        • Total amount owed;
        • Terms of agreement negotiated with the suspect individual;
        • Interest, if any, on the amount; and Address where future payments, if any, should be sent.
      2. Obtains the suspect individual’s signature as well as that of the appropriate University official(s) on the agreement or promissory note, and delivers the final executed document to the individual, either in person or via certified mail.
      3. Deposits any cash or checks immediately and prepares a Cash Transmittal form crediting the affected department and/or the Internal Audit account.
    2. If a Settlement Is Not Reached—The following actions are taken when a settlement is not reached with the suspect individual:
      1. Student Fiscal Services, Receivables Unit, notifies the suspect individual via certified mail that the matter will be referred to the University’s collection process. Copies of the notice are retained by the Student Fiscal Services, Receivables Unit. If the suspect individual is a student or student employee, a hold may be placed on the student’s academic records and registration privileges until the debt is satisfied or a satisfactory repayment plan is implemented.
      2. Student Fiscal Services, Receivables Unit, informs all parties of the disposition of collection efforts, including when and if a judgment is entered against the suspect individual.
  2. Final Restitution Document

    Student Fiscal Services, Receivables Unit, forwards the final restitution documentation to the Assistant Attorney General representing the State Auditor’s Office as well as the State Auditor’s Office for approval or otherwise informs them of collection efforts. For informational purposes, a copy of the transmittal letter/email to the Assistant Attorney General representing the State Auditor should also be sent to an Assistant Attorney General with the UW Division of the Attorney General’s Office.
  3. Termination of Restitution or Collection Efforts

    Student Fiscal Services, Receivables Unit, tracks restitution or collection efforts and notifies all parties when restitution is completed, or collection efforts have been terminated.

7.  Responsibilities of University Restitution Representatives

University representatives who receive restitution payments or negotiate with suspect individuals regarding restitution are responsible for informing all other University parties noted in this policy statement of their restitution efforts. Before finalizing the terms of any restitution agreement, however, the University representative must seek and receive approval from the Assistant Attorney General representing the State Auditor’s Office as well as the State Auditor’s Office.

8.  Additional Information

For further information contact Internal Audit:

May 1, 2002; November 6, 2008.