APS 47.10 – Policy on Financial Irregularities and Other Related Illegal Acts

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

1.  Introduction

This policy establishes the procedures and responsibilities for reporting and resolving known or suspected financial irregularities and other related illegal acts. The University of Washington is required under the Revised Code of Washington—RCW 43.09.185—to report any suspected financial irregularity or other related illegal act to the State Auditor’s Office.

2.  Definitions

A.   Financial Irregularity

A loss of funds or assets of the University resulting from any dishonest, fraudulent, or other related illegal act. Such acts include, but are not limited to:

• Forgery or alteration of reports, documents, or computer files.
  
• Misappropriation or misuse of University assets (i.e., equipment, supplies, cash).
  
• Authorizing or receiving compensation for goods not received or services not performed.
  
• Authorizing or receiving compensation for hours not worked.
  
• Any irregularity in the handling or reporting of money transactions.
  
• Use of University facilities and equipment for private financial gain.
  
• Acceptance of kickbacks or bribes.
  
• Other related illegal acts (i.e., misuse of a U-PASS, email account, or the Internet).

B.   Suspected Financial Irregularity or Other Related Illegal Act

A reasonable belief or actual knowledge that a dishonest or fraudulent act is occurring or has occurred.

3.  Policy

Faculty and staff should immediately report suspected financial irregularities or other related illegal acts to their department management or to the Department of Internal Audit. Once department management becomes aware of a suspected financial irregularity or other related illegal act, they must immediately report it to Internal Audit. If the discovery occurs after normal business hours (when Internal Audit is not available), the report may be made to the University Police who have a 24-hour-a-day response capability. This is particularly important if there is concern over the recovery of assets or protection of vital records.

Department managers should protect the accounting records from loss or destruction, but should not attempt to conduct their own investigation. Department managers should consult with the appropriate University personnel official before taking any personnel action.

Upon learning of the suspected financial irregularity or other related illegal act, Internal Audit will immediately notify:

• The State Auditor’s Office.
  
• The University of Washington Division of the Attorney General’s Office.
  
• The University Police.
  
• The University’s Risk Management Office.
  
• The appropriate University personnel official.

4.  Investigation Procedures

Internal Audit, the University Police, and the UW Division of the Attorney General’s Office will conduct a preliminary investigation to determine:

• Whether a financial loss has occurred;
• Whether the responsible party(ies) can be identified; and
• The extent of the loss.

The results of the preliminary investigation will determine if and when it is necessary to notify other University officials or the Prosecuting Attorney.

At the conclusion of the investigation, Internal Audit issues a written report to the State Auditor’s Office, the University’s Senior Vice President for Finance and Facilities, and other appropriate University officials.

5.  Recovery of Loss

Department managers, on their own, are not authorized to enter into a settlement to recover the suspected loss. All settlements for recovery of the loss must be approved by the State Auditor’s Office and the Attorney General.

If the investigation performed by Internal Audit reveals a loss occurred, the University will seek full recovery which may include audit costs. The University’s Student Fiscal Services, Receivables Unit, will coordinate the recovery action (see APS 47.4, “Policy on Financial Irregularities and Other Related Illegal Acts”) and has the authority to approve recovery settlements on behalf of the University.

6.  Responsibilities

A.   Faculty and Staff

Report any instance of suspected financial irregularity or other related illegal act to your management head or to Internal Audit (or the University Police, after normal business hours if there is a concern over recovery of assets or protection of vital records).

B.   Management Head

• Immediately contact the Department of Internal Audit (or the University Police after normal business hours if there is a concern over recovery of assets or protection of vital records).
  
• Protect the accounting records from loss or destruction.
  
• Do not attempt to conduct your own investigation.
  
• Consult with the appropriate University personnel official before taking any personnel action.
  
• Do not enter into a recovery settlement.

C.   Internal Audit

• Notify the State Auditor’s Office, the UW Division of the Attorney General’s Office, the University Police, the University’s Risk Management Office, and the appropriate University personnel official.
  
• Conduct a preliminary investigation.
  
• Notify other University officials as necessary.
  
• Issue a written report to the State Auditor’s Office, the Senior Vice President for Finance and Facilities, and other appropriate University officials.

7.  Additional Information

Questions, reports or other communications regarding financial irregularities or other related illegal acts should be directed to the Department of Internal Audit.

If there is a concern over recovery of assets or protection of vital records after normal business hours, contact the University Police.

May 1, 2002; November 6, 2008.