Full Text
County of Centre Board of Commissioners POLICIES & PROCEDURES TITLE: Fraud Policy SECTION: D, 15 Page 1 of 5 pages POLICY The Board of Commissioners of Centre County Government are committed to maintaining an environment of fairness, ethics, and honesty for employees, County residents, our clients, our vendors, and anyone else with whom the County has a relationship. To maintain such an environment requires the active assistance of every official, department manager, and employee. The purpose of this document is to establish and communicate County policy regarding the deterrence and investigation of suspected misconduct and dishonesty by employees, elected officials, appointees, volunteers, and vendors and to provide specific instructions regarding appropriate action in case of suspected violations. Fraud and other misconduct include, but are not limited to: • Forgery or alteration of checks, drafts, promissory notes and securities. • Knowingly present or cause to be presented a false or fraudulent claim for payment, either internally or externally to the federal or state government. • Any misappropriation of funds, securities, supplies or any other asset. • Any irregularity in handling or reporting of money transactions. • Any false reporting or communicating of financial information. • Seeking or accepting anything of material value from vendors, consultants, or contractors doing business with the County. • Any computer related activity involving alteration, destruction, forgery, or manipulation of data for fraudulent purposes or misappropriation of County-owned software. • Requesting or receiving compensation or other benefits for hours not worked or used. Benefits include use of vacation, personal or sick time. ---PAGE BREAK--- Fraud Policy, Page 2 of 5 Federal and State Regulations: 1. The False Claims Act (FCA) makes it illegal for any person to, among other things, knowingly present or cause to be presented to an officer or employee of the Federal government a false or fraudulent claim for payment or approval; or make, use, or cause to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government. The FCA defines knowingly to mean that a person: has actual knowledge of the information acts in deliberate ignorance of the truth or falsity of the information recklessly disregards the truth or falsity of the information. False claims against the government carry a penalty of $5,500 - $11,000 plus three times the amount of damages which the government sustains because of the false claim. In addition, if a person or entity is convicted of filing a false claim, the Office of Inspector General may seek to exclude that person or entity from participation in the federal health care programs. Criminal penalties may also be imposed on individuals who submit false claims. 2. The Program Fraud Civil Remedies Act (PFCRA) allows the Department of Health and Human Services and other federal agencies to impose an administrative penalty upon individuals and entities who submit a false claim or series of claims with a value of less than $150,000. The law makes it unlawful for a person to submit such claims that the person knows or has reason to know: are false, fictitious, or fraudulent include or are supported by any written statement that is materially false, fictitious, or fraudulent, include or are supported by any written statement that omits a material fact, is false, fictitious, or fraudulent as a result of such omission, and is a statement that the person submitting the statement has a duty to include is for payment for the provision of property or services that the person has not provided as claimed. The submission of false, fictitious, or fraudulent statements to a government agency will also violate the PFCRA if the statement is accompanied by an express certification of its truthfulness. 3. False Claims law, the Medicaid Fraud and Abuse Control Act, has both civil and criminal penalties and makes it unlawful to submit false or fraudulent claims to the Medical Assistance program. The Insurance Fraud law makes it a criminal offense to knowingly submit any false, incomplete or misleading information concerning any material fact to an insurer or self-insured. 4. Non-retaliation - Under federal and state law, employees who lawfully report fraud, abuse, or waste are protected from retaliation. ---PAGE BREAK--- Fraud Policy, Page 3 of 5 County Provisions: 1. The County will fully investigate any suspected acts of fraud, abuse, misappropriation, or illegal acts. An objective and impartial investigation will be conducted regardless of the position, title, and length of service or relationship with the County of any party who might be involved in or is the subject of such investigation. 2. Each elected official and manager (department manager) is responsible for instituting and maintaining a system of internal control to provide reasonable assurance for the prevention and detection of fraud. Managers should be familiar with the types of improprieties that might occur within their area or responsibility and be alert for any indications of such conduct. 3. All employees and elected officials are required to act in accordance with County Code. 4. The Controller is the County’s designated compliance officer. Depending on the situation, the Controller, Director of Administration, or their designees have the primary responsibility for investigation of all activity as defined in this policy. 5. Depending on the severity of the situation, the County will contact the law enforcement agency having appropriate jurisdiction. 6. Upon conclusion of the investigation, the results will be reported and appropriate action will be taken. 7. The County will pursue every reasonable effort, including court ordered restitution, to obtain recovery of the County’s losses from the offender. 8. Each employee has an individual responsibility for reporting an occurrence of fraud or violation of applicable laws. 9. The County will maintain the confidentiality, within the limits of the law, of the identity of any individual who in good faith reports possible misconduct. 10. The Board of Commissioners will not tolerate any form of retaliation, sanctions, or discipline for anyone who reports a possible violation in good faith. 11. Any individual who deliberately makes a false accusation with the purpose of harming or retaliating against another colleague will be subject to disciplinary action, up to and including dismissal. ---PAGE BREAK--- Fraud Policy, Page 4 of 5 Procedures: 1. Personal Obligation to Report To obtain guidance on an ethics or compliance issue or to report a suspected violation, an employee may choose from several options. a. It is good practice, if a person is comfortable under the circumstances, to raise concerns first with his/her immediate supervisor or department manager. b. If this is uncomfortable or inappropriate to raise concerns first with your supervisor or manager, immediately notify the County Controller. c. If this is inappropriate, the employee must immediately notify the County’s Director of Administration. In order to permit a fair and complete investigation, the employee shall not discuss the matter with anyone other than his/her department manager, the Controller, or the Director of Administration. The County’s Director of Human Resources or Solicitor may be consulted during the investigation. 2. Fraud Hotline The Controller has implemented a confidential fraud reporting process to report any suspected wrongdoing. The Fraud Hotline offers an anonymous method of reporting suspected illegal or unethical behavior. 3. Department Manager’s Responsibility Upon notification from an employee of suspected fraud, or if the manager has reason to suspect fraud, the manager should contact the County Controller. The department manager should not attempt to investigate the suspected fraud or to discuss the matter with anyone other than the Controller, unless directed by the Director of Administration. 4. Investigation Upon notification from an employee or department manager of suspected fraud, the Controller or the Director of Administration will conduct an investigation, convene a compliance committee, and if necessary: • Contact the Management Information Systems (MIS) Department for cases involving computer equipment. • Contact the County solicitor. • Contact the Director of Human Resources. • Contact the external auditors or fraud examiners. • Contact the appropriate law enforcement agency. ---PAGE BREAK--- Fraud Policy, Page 5 of 5 5. Security of Evidence Once a suspected fraud is reported, the Controller or Director of Administration shall take immediate action to prevent the theft, alteration, or destruction of relevant records. Such actions include, but are not necessarily limited to, removing the records, limiting access to the location where the records currently exist, and preventing the individual suspected of committing the fraud from having access to the records. The records must be adequately secured until the Controller or investigating agency obtains the records to begin the fraud investigation. 6. Whistle-blower Protection Whistle-blowing protection is intended to demonstrate in the clearest possible terms the absolute commitment of the County to the highest standards of ethics and compliance. That commitment permeates all levels of the organization. No person acting on behalf of the County shall retaliate against anyone who in good faith reports suspected fraud, including: • Dismiss or threaten to dismiss an employee; or • Discipline, suspend, threaten to discipline or suspend an employee; or • Impose a penalty upon an employee; or • Intimidate or coerce an employee because the employee has acted in accordance with the requirements of the policy. The violation of this section will result in discipline up to and including dismissal. 7. Corrective Action Where an internal investigation substantiates a reported violation, it is the policy of Centre County Government to initiate corrective action, including as appropriate, making prompt restitution of any overpayment amounts, notifying the appropriate governmental agency, instituting whatever disciplinary action is necessary, and implementing changes to prevent a similar violation from recurring in the future. 8. Discipline All violators of the Code will be subject to disciplinary action. The precise discipline utilized will depend on the nature, severity, and frequency of the violation and may result in disciplinary actions, such as: Verbal Warning, Written Warning, Suspension or Termination. 9. Internal Audit and Other Monitoring Centre County Government is committed to the aggressive monitoring of compliance with its policies. The Controller maintains the County’s internal audit function. ATTACHMENTS Code of Conduct Adopted: 06/21/07 ---PAGE BREAK--- CODE OF CONDUCT The mission of Centre County Government is to provide high quality services to county residents in an efficient and cost effective manner. Citizens have repeatedly said that maintaining the quality of life in Centre County needs to be a top priority. The services provided by local government are an important component of the quality of life in Centre County. We accomplish our mission by emphasizing our shared values: • Honesty - being forthcoming and truthful when we interact with others and ourselves. • Respect - treating others with dignity and mutual consideration. It builds an environment that encourages individuals to relate openly and fulfill their potential. • Excellence - the pursuit and achievement of exceptional quality • Integrity - doing what is right, legally and morally, even though you might be able to do otherwise without detection. Tone at the Top: The Board of Commissioners, elected officials, and department managers must, at all times, comply with all applicable laws, regulations, and County policy. All business conduct should be well above the minimum standards required by law. Expectations: The Board of Commissioners (BOC) expects officials, staff, and vendors to conduct themselves in a businesslike manner. The BOC will not condone the activities of individuals who violate the law including The Commonwealth of County Code, or participate in unethical business dealings. Use of alcohol or illegal drugs, acts of violence, use of vulgarity or similar unprofessional activities is strictly prohibited at the workplace. We will treat others with respect at all times. Staff must not engage in sexual harassment or conduct themselves in a way that could be construed as such. The BOC believes effective disciplinary policy and procedures are necessary to assure the maintenance of an orderly, safe, and efficient County operation. Each department manager and official is responsible to insure that staff understands what is required of them as well as the appropriate standards of conduct to be followed (County policy, Section A,4). Conflicts of Interest: The BOC expects staff to perform their duties conscientiously, honestly, and in accordance with the best interests of the County and its residents. Staff must not use their position or the knowledge gained as a result of their position for private or personal advantage. Acceptance of Gifts: The BOC will not permit the acceptance of gifts, services, money, or personal favors by staff from outside suppliers or providers of service. County’s Funds and Assets: Employees who have access to County’s funds must follow the prescribed procedures for recording, handling, and protecting assets and money. When an employee’s position requires spending County funds, that individual must use good judgment. We all have a responsibility to care for the County’s assets. ---PAGE BREAK--- Code of Conduct, Page 2 of 2 Records and Communications: Accurate and reliable records are necessary to meet the County’s legal and financial obligations and to manage the affairs of the County. The County’s books and records must reflect, in an accurate and timely manner, all business transactions. The employees responsible for accounting and recordkeeping must fully disclose and record all assets, liabilities, and other financial information. Employees must not make or engage in any false record or communication of any kind, whether internal or external. It is illegal for any person to, among other things, knowingly present or cause to be presented to an official or employee of the federal or state government a false or fraudulent claim for payment. Dealing with Outside People and Organizations: Everyone must take care to separate their personal roles from their County positions when communicating on matters not involving County business. Employees must not use County identification, stationary, supplies, and equipment for personal or political matters. When dealing with anyone outside the organization, employees must take care not to compromise the integrity or damage the reputation of either the County, or any outside individual, business or governmental body. Privacy and Confidentiality: When handling financial and personal information (written or verbal) about clients, employees, or others with whom the County has dealings, it is the duty of each elected official, manager, and employee to ensure that private and/or confidential information is not disclosed without authorization and/or proper documentation. Reporting: Everyone is responsible for reporting any evidence of fraud or illegal activity by any colleague, manager, or vendor. To obtain guidance on an ethics issue or to report suspected violation, you may choose from several options. Depending on the situation, you may raise concerns with your supervisor, the Director of Administration, the County Controller and/or Compliance Officer. The County is committed to investigating all reported concerns to the extent possible. The County will make every effort to maintain, within the limits of the law, the confidentiality of the identity of any individual who reports possible misconduct. The BOC will not tolerate any form of retaliation, sanctions, or discipline for anyone who reports a possible violation in good faith. Fraud Hotline: The Controller has implemented a fraud reporting process to report any suspected wrongdoing. I acknowledge receiving and reading the Centre County Government’s Code of Conduct. Printed Name Signed Dated