1. South Texas College Fraud Awareness and Internal Controls
Business Office
South Texas College
Fraud Awareness
and
Internal Controls

2. Guidelines for Reporting and Investigating
South Texas College
Guidelines for Reporting
and Investigating
Suspected or Known Fraud, Abuse and Other Improprieties

3. Examples of Acts of Fraud, Abuse and Other Improprieties
ACFE – The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets
Encompasses wide variety of conduct, such as pilferage to sophisticated investment swindles
Common violations – asset misappropriation, corruption, false statements, false overtime, petty theft and pilferage, use of common property for personal benefits and payroll and sick time abuses

4. 2. Employee Responsibilities
Report the act to your immediate supervisor
If the supervisor has participated in or condoned the act, report the matter to the next highest level of supervisor or management
Director of Human Resources
Anonymous Fraud Hotline
State Auditor’s Hotline

5. 3. Anonymous Fraud Hotline
THE NETWORK
This toll-free number is staffed by The Network, an independent organization operating 24 hours a day, 7 days a week. You do not have to give your name An Interview Specialist documents your concern, assigns you a personal reference number, and relays your concerns to the company.

6. Fraud Survey

7. Got Internal Controls?

8. The COSO* Definition of Internal Control
Definition of I/C:
“Internal control is a process, effected by an entity’s board of directors, management, and other personnel - designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
a) reliability of financial reporting
b) effectiveness and efficiency of operations,
c) compliance with applicable laws and regulations.
* Committee of Sponsoring Organizations of the Treadway Commission

9. Why Internal Controls are Important?
Provides management with confidence that the entity is operating according to specific standards which are monitored-someone is watching.
Indicates to staff that what they are doing is important and that QUALITY is important.
Sends a signal that certain behaviors will not be tolerated.

12. Benefits of Strong Internal Controls
Reducing and preventing errors in a cost- effective manner.
Ensuring priority issues are identified and addressed.
Protecting employees & resources.
Providing appropriate checks and balances.
Having more efficient audits, resulting in shorter timelines, less testing, and fewer demands on staff.

13. Why controls don’t always work
Inadequate knowledge of policies or governing regulations.
Inadequate segregations of duties.
Inappropriate access to assets.
Form over substance.
Control override.
Inherent limitations.

14. What is Fraud Did something bad/wrong – misrepresentation of facts
Fraud Typically requires 3 elements
Did something bad/wrong – misrepresentation of facts
Done intentionally
Resulted in unauthorized personal gain

15. Fraud Diamond - Explains why fraud is committed
Incentive
Opportunity
Inadequate internal controls
Weak / Remote Management
Personal Debts
Greed
Drug Abuse
Organized Crime
Inappropriate values
Job/company dissatisfaction
Knowledge of systems
Skills required to undertake
Rationalization
Capability

16. What you can do!
When thinking about internal controls, consider the following:
Propriety of transactions
Reliability and integrity of information
Compliance with policies and government regulations
Safeguarding assets

17. What you can do!
Economy and efficiency of operations…is there a better way to do the job?
Make sure you have up-to-date policies and procedures;
Ensure authorization limits are communicated within your department;
Ensure all assets (especially cash) are safeguarded at all times;
Establish document control (especially for spreadsheets);
Ensure approval signatures are visible (legible) on all required documentation;
Make sure data is only accessible by authorized personnel;
Understand your department/function’s risks;
Establish objectives and measures for your department/function and for major programs; and
Track performance to evaluate your success!

18. Ethics

19. Manual of Policy Policy 4000, Code of Ethics Policy Statement
Policy 4001, Code of Professional Ethics for the
Administration, Faculty and Staff
Policy 4901, Standards of Conduct
Policy 4204, Reporting Suspected or Known Fraud, Abuse and Other Improprieties

20. Thank You