(A) Introduction.
(1) This fraud policy is established to facilitate the development of controls that will support the detection and prevention of fraud against the village. It is the intent of the village to promote appropriate and consistent organizational behavior by providing guidelines and assigning responsibility for the development of controls and conduct of investigations. All village employees have a responsibility to ensure that village’s resources are used for valid and appropriate needs. Administrators and all levels of management have added responsibility for establishing and maintaining proper internal controls to protect the village’s resources from misuse. Administrators and department supervisors should be familiar with the risks and exposures in their areas of responsibility and be alert to any indications of improper activities, misappropriations, or dishonest activity.
(2) If situations are identified where the requirements of the policy are in conflict with local law, contact must be made with the Law Director of the village to determine appropriation actions.
(B) Scope.
(1) This policy applies to any known or suspected financial and ethical irregularities involving employees, as well as vendors, contractors, outside agencies doing business with employees of such agencies, and/or other parties with a business relationship with the village.
(2) Management and the Fiscal Officer assessed the risk of potential irregularities on a daily basis, for every transaction processed by this village.
(3) Any investigative activity required will be conducted without regard to the suspected wrongdoer’s length of service, position/title, or relationship to the village.
(C) Definition.
(1) FRAUD is any illegal act characterized by deceit, concealment, or violation of trust. The acts are not dependent upon the threat of violence or physical force. FRAUDS are perpetrated by parties and organizations to obtain money, property, or services; to avoid payment or loss of services; and to secure personal or business advantage.
(2) FRAUD encompasses an array of irregularities and illegal acts by intentional deception of theft which produces a loss or misuses of resources or property. FRAUD may be committed by persons outside, as well as inside the organization.
(3) Actions constituting FRAUD include, but are not limited to:
(a) Any dishonest or fraudulent act;
(b) Misappropriation of funds, securities, supplies, or other assets;
(c) Forgery or alteration of a check, bank draft, account, or any other village document;
(d) Impropriety in the handling or reporting of money or financial transactions;
(e) Profiteering as a result of insider knowledge of village activities;
(f) Disclosing confidential and proprietary information to outside parties;
(g) Accepting or seeking bribes or items for personal gain from contractors, vendors, or persons seeking to provide services/material to the village;
(h) Destruction, removal, or inappropriate use of records, furniture, fixtures, and equipment;
(i) Disclosing to other persons securities activities engaged in or contemplated by the village; and/or
(j) Any similar or related irregularity.
(4) Other irregularities concerning an employee’s moral, ethical, or behavioral conduct should be resolved by department management and/or the Mayor.
(D) Procedures.
(1) In accordance to R.C. § 117.103, all public employers are to notify employees of the methods of reporting fraud, including doing so anonymously. New hires must, within 30 days of hire, verify in writing that they have been advised of the system, and the State Auditor’s Office will verify compliance of the law during regular audits under R.C. § 117.11, that new employees have been provided information as required by this division (D).
(2) All employees, particularly administrators and managers, should be familiar with the risks and exposures in their areas of responsibility and be alert to any indications of improper activities, misappropriation, or dishonest activity.
(3) An employee who suspects fraudulent activity should not accuse any individual directly, investigate the matter personally, or discuss the matter with anyone other than his or her supervisor, the Mayor, or the Village Law Director.
(4) Great care must be taken in the investigation of suspected improprieties or irregularities so as to avoid mistaken accusations or alerting suspected individuals that an investigation is under way.
(E) Reporting fraud.
(1) An employee who discovers or suspects fraudulent activity will contact his or her supervisor immediately. If an employee feels uncomfortable addressing their concerns at the local level, they may take their report directly to any of the following:
(a) The Mayor;
(b) The Law Director;
(c) The State Auditors’s Office - fraud reporting; or
(d) The President of the Council.
(2) When reporting fraudulent activity, provide as much detail as possible. The report may be submitted anonymously, however providing your contact information may be helpful if questions arise. All information will be treated as confidential to the extent permitted by law. The reporting individual should not contact the suspected individual in an effort to determine facts or demand restitution. He or she should not discuss the case, facts, suspicions, or allegations with anyone unless specifically asked to do so by the Law Director.
(F) Investigation.
(1) Anyone receiving a report of fraudulent activity should notify the Mayor and/or the Law Director.
(2) The Mayor and the Law Director will consider the allegations and gather additional information to determine, in consultation with the Department Manager and the President of Council, whether a formal inquiry is warranted. The Mayor will also decide if the State Auditor’s Office will be contacted.
(3) Members of the investigation unit will have free and unrestricted access to all village’s records and premises, whether owned or rented. If the report concern is minor and the solution is straight-forward without the need for substantial investigation, the Mayor will work with the Department Manager to develop and implement a solution, protect the rights of the parties involved, and maintain documentation and discretion.
(4) The fraud investigation team will determine:
(a) When notification is given to the employee against whom the allegation has been made;
(b) If a suspected employee should be suspended with or without pay or temporarily reassigned in accordance with law and/or the appropriate ordinance;
(c) In conjunction with the supervisor, if it is necessary to safeguard all records relating to the alleged activity by removing them from the employee’s custody; and
(d) The final course of action.
(G) Employee protection. All employees are assured that no retaliation of any kind is permitted against the employee for complaints or concerns made in good faith. No employee will be adversely affected because the employee refuses to carry out a directive which, in fact, constitutes fraud, or is a violation of federal or local law. The village will provide appropriate support to reporting employees to protect against retaliation and respond to concerns of retaliation or unfair treatment linked to the employee’s reporting.
(Res. 17-08, passed 6-20-2017)