Minimize The Risk of Fraud – Southeastern Fraud Policy
While no organization is exempt from fraud, steps can be taken to deter the occurrence of fraud and mitigate loss. A three-pronged approach of education, awareness, and consequences, should be established to minimize the commission of fraudulent acts. The same approach can be used to mitigate the amount of loss associated with each fraud committed.
Properly educating employees on misconceptions associated with fraud will go far in the prevention and detection of fraud. It is difficult, if not impossible, to develop a profile of character traits for individuals who commit fraud. People from different social backgrounds, different educational backgrounds, and people at different levels of an organization can commit fraudulent acts. The commission of a fraudulent act is typically associated with a pressure to commit the act, a perceived opportunity to get away with the act, and an attitude that rationalizes the act.
The level of employee awareness of fraud can be heightened through education, information, and a control environment that fosters the prevention and detection of fraud. Employees must become aware of what constitutes fraud and be able to identify risk factors or conditions associated with fraud.
Employees who commit fraudulent acts must understand that there are consequences associated with the commission of such acts, up to and including disciplinary actions. Realizing that consequences will be forthcoming can serve as a strong deterrence to fraud.
The 2010 Report to the Nation – Occupational Fraud and Abuse, published by the Association of Certified Fraud Examiners, conducted extensive research into how occupational fraud affects organizations. The Report includes numerous graphs and charts that provide much education on fraud. Page38 of the report lists the most common anti-fraud measures used by victim organizations. Those items listed on the report include the following:
External Audit
Internal Audit
Fraud Training
Surprise Audits
Hotline
Page 16 of the same report identifies some common methods in which fraud is detected, including the following (in order):
Tip
Management Review
Internal Audit
By Accident
External audit
Notified by Police
In addition to the above, The University is required to comply with ACT 1101 of the 2001 Legislature (LSR 24:523). This requires the agency head to report in a timely manner in writing the misappropriation of public funds or assets of his agency to the Legislative Auditor and the local district attorney. This includes the loss or theft of any equipment. Therefore it is imperative at any time an employee has knowledge of a misappropriation or theft of a University asset, the employee is responsible to report the loss to University Police in a timely manner.
Management and supervisory personnel must create an organization that is committed to the prevention and detection of fraud. Southeastern Fraud Policy.
