Dishonest or Fraudulent Activities
An employee found to have committed a dishonest or fraudulent act in relation to the Institute's financial affairs is subject to disciplinary action by the NMMI and investigation by law enforcement agencies when warranted. Described herein are the steps to be taken when fraud, misappropriation, and similar dishonest activities are suspected. This policy also includes the procedures to follow in accounting for any missing funds, restitution, and recoveries.
3. Supervisor Responsibility
Supervisors should not attempt to conduct individual investigations, interviews, or interrogations to determine if a suspected activity is improper. The Internal Auditor will conduct an investigation of any suspected dishonest or fraudulent activity working with internal or external departments, such as the Institute Legal Advisor, Vice President of Finance and Business Processes and law enforcement agencies. However, supervisors are responsible for taking appropriate corrective actions to ensure adequate controls exist to prevent continued occurrences of such improper activities.
Supervisors will support the Institute's responsibilities and will cooperate with the Internal Auditor and law enforcement agencies in the detection, reporting, and investigation of criminal acts, including prosecution of offenders. The Internal Auditor is to have full and unrestricted access to all necessary records and personnel. All Institute furniture and contents, including desks, are open to inspection when there is a reasonable suspicion of a dishonest or fraudulent activity which makes such inspection appropriate; there is no assumption of privacy. Every effort should be made to effect recovery of Institute losses.
Great care must be taken in the dealing with suspected dishonest or fraudulent activities to avoid the following:
Responsibilities of the supervisor in handling dishonest or fraudulent activities include the following:
If warranted, an investigation will be conducted. This entails expeditious action and detailed analyses of available financial records. The audit investigation requires the full cooperation of the department's personnel. The Internal Auditor will proceed as follows if evidence is uncovered showing possible dishonest or fraudulent activities.
(1) The Internal Auditor will advise supervisors to meet with the Vice President of Finance and Business Processes to determine if any disciplinary action should be taken.
(2) The Internal Auditor will discuss findings with management and cognizant administrators.
(3) The Internal Auditor will notify the President/Superintendent and the Legal Advisor. The Internal Auditor will also notify the Board of Regents through the President/Superintendent, if the investigation is of any area of high public interest or if the amount involved is excessive.
(4) If illegal activity appears to have occurred, the findings will be reported to the appropriate audit and law enforcement agencies. This will be coordinated with Institute Legal Advisor and Institute administrators.
(5) The Internal Auditor will notify the State Auditor immediately in writing if State Auditor Rules apply.
(6) The Internal Auditor will coordinate the notification of insurers and filing of claims with Institute Property Management.
5. Accounting for Loss, Restitution, and Recovery
The department incurring the loss from a dishonest or fraudulent act will suffer the loss until the monies can be recovered through insurance or restitution. The NMMI Business Office will set up a receivable for the amount owed the Institute. Due to the uncertainty of collection, an allowance for doubtful accounts will be credited in an amount equal to the receivable. At fiscal year end, the allowance account will be adjusted by the amount collected and the department account will be credited accordingly.
6. Cost of Recovering Funds
7. Whistle blower Protection
NMMI strongly encourages all Institute employees, acting in good faith, to report any suspected misconduct that may be taking place at the Institute. An employee who interferes with or tries to interfere with the right of another employee reporting suspected dishonest or fraudulent activities (misconduct) is subject to disciplinary action, up to and including dismissal. The Institute is committed to protecting employees who report suspected misconduct in accordance with the Whistle blower Protection Act.
If an employee believes that retaliation or interference was threatened, attempted, or occurred, he or she may file a complaint with the Internal Audit Department. Employees reporting suspected interference with or suspected retaliation for reporting suspected misconduct by the Internal Audit Department may file a report with the President/Superintendent’s Office. An employee may file a retaliation complaint only if he or she has previously reported suspected misconduct.
Retaliation is any adverse action taken against an employee who has reported suspected misconduct when business related reasons do not exist for the action or the action is outside of regular practice. Some examples of retaliation are:
Reporting suspected misconduct does not exempt an employee from legitimate personnel action taken during the normal course of business.