Business
Office
“Count on Satisfaction”
Cynthia Villarreal
Accounting Group Supervisor
872-4610
cvillar@southtexascollege.edu
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What would you do?
It’s 8 am Monday morning and you are waiting to
clock in at your building. You notice the employee
in front of you clocks in, exits the building and
drives off in their car.
a)
b)
c)
d)
e)
You clock in and go on with your day
You inform your supervisor
You inform the Director of Human Resources
You contact TimeForce (Annie Ochoa)
b&c
What would you do?
You become aware that a co-worker has been
running personal errands when they should only
be commuting for work related activities.
a) You inform the employee that it’s not
acceptable
b) You inform their supervisor
c) You inform your supervisor
d) You don’t say anything
Purpose

Fraud-intentional deception to unlawfully deprive the
College of something of value

Waste-extravagant, careless or needless expenditure of
College funds, incurring of unnecessary expenses,
mismanagement of college resources or property or the
consumption of College property that results from deficient
practices, systems, controls or decisions

Abuse-intentional, wrongful, or improper use or
destruction of College resources; excessive or improper use
of an employee or official’s position in a manner other than
its rightful or legal use
2014 Global Fraud Survey

Occupational Fraud-the use of one’s occupation for
personal enrichment through the deliberate misuse or
misapplication of the employing organization’s resources or
assets.

Asset Misappropriation – 85%

Corruption – 37%

Financial Statement Fraud – 9%
2014 Global Fraud Survey
Fraud Triangle
When these three sides of
the triangle are present,
there is a much higher
than normal chance of an
individual committing a
fraud.

Pressure-motivates the
crime

Opportunity-the
method by which the
crime can be committed

Rationalization-justify
the crime to make it
acceptable
2014 Global Fraud Survey
Behavioral Red Flags
2014 Global Fraud Survey

Detection Methods
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Proactive

Tip – 42%

Management Review – 16%

Internal Audit – 14%
Passive

Accident – 7%

Account Reconciliation – 7%

Document Examination – 4%

External Audit – 3%

Surveillance/Monitoring – 3%

Notified by Law Enforcement – 2%

IT Controls – 1%

Confession – 1%
Doing What’s Right

Anonymous Fraud & Ethics Hotline

1-800-482-5158

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.
Examples of Acts of Fraud, Abuse and Other
Improprieties
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Theft or misappropriation of funds
False overtime
Sick abuse
Use of College property for personal benefits
Waste of supplies
Fictitious vendor, employee or student payments
False reimbursements
Forgery of altercation of documents
Unauthorized use of records or access to information
systems
Falsification of reports to management or external agencies
Authorizing or receiving compensation for goods not
received or services not performed
Improper handling or reporting of financial transactions
South Texas College
Guidelines for
Reporting and Investigating
Suspected or Known Fraud, Abuse
and Other Improprieties
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http://hr.southtexascollege.edu/forms/policies/policies_reporting_fraud_procedures.pdf
1. Introduction

STC is committed to creating an environment
where fraud, waste, abuse and other improprieties
are not tolerated

Responsibilities for educating employees
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Responsibilities for internal controls

Responsibilities for identifying and evaluating
risks
2. Purpose

Procedures and responsibilities or
reporting and investigating incidents

Taking remedial actions

Reporting evidence
3. General
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Applies to all employees
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Requires employees to detect and report
College will pursue legal remedies
Texas Whistleblower Act
Requires employees to cooperate
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Immediately contact appropriate personnel
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4. Examples of Acts of Fraud,
Abuse and Other Improprieties

Activity:
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Is done with the intent to conceal
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Violates the employee’s fiduciary duties to the
College
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Is committed for the purpose of direct or indirect
financial benefit to the employee

Costs the College assets, revenues, or reserves
5. Employee Responsibilities

Report the act to your immediate supervisor
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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
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Anonymous Fraud and Ethics Hotline
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State Auditor’s Office Fraud, Waste and/or Abuse
Hotline
5. Employee Responsibilities

Employee should prepare written report
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Department where the act is occurring
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What is occurring

When it occurred

Who is involved

How is it occurring

Employee will refrain from further examination of
incident with anyone other than proper personnel
6. Restitution

Appropriate action will be taken to recover
assets lost

Will include cost of investigation, recovery or
other associated costs
7. Internal Control Deficiencies

Identify areas or practices in College that require
modification

Internal Auditors will recommend corrective
actions and shall follow-up on their
recommendations
8. Employee Disciplinary Actions
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An employee 
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found to have participated
who hinders a fraud inquiry or investigation by
making a false or misleading statement
who has knowledge of fraud of a dishonest act,
but fails to report it according to these guidelines
Shall be subjected to disciplinary action
9. Acting on Evidence of Fraud

College is responsible to investigate acts and to act on
evidence
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Appropriate personnel will gather facts and evidence

Appropriate experts, consultants and law
enforcement will be engaged as required
9. Acting on Evidence of Fraud
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Employee may be reassigned, relieved of duties, etc,
pending the outcome of the investigation

A report will be prepared

Take appropriate action against the employee found
to have committed the act
10. Employee Training and
Acknowledgement
Training related to reporting is provided to all
employees
11. Acting in Good Faith

Anyone reporting acts, must act in good
faith and have reasonable grounds for
believing the information disclosed is valid.
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Reports proven to be unsubstantiated and
proven to be done maliciously, recklessly,
or falsely will be viewed as a serious
disciplinary offense and may result in
discipline, up to and including termination
of employment.
12. Confidentiality

Reports and investigations of incidents of
fraud, waste, and/or abuse shall be kept
confidential.
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Disclosure of reports to individuals not
involved in the investigation will be viewed as
a serious disciplinary offense and may result in
discipline, up to, and including termination of
employment.
Doing What’s Right
If you ever have a concern regarding
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violation of policies
illegal activities
unsafe activities
Doing What’s Right
Such as the following:
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Theft,
misappropriation of funds,
false request for reimbursement,
unauthorized use of records or access to
information systems or
fictitious vendor, employee, or student
payments
Doing What’s Right
Don’t keep it to yourself.
• You have the responsibility to report it to the
appropriate personnel.
Report the act per normal channels:
• your immediate supervisor or
• if your immediate supervisor has participated in or
condoned the act, report the matter to the next
highest level of supervision or management or to
• the Director of Human Resources
Doing What’s Right

If you don’t feel comfortable
discussing the issue within normal
channels, you may call The Network,
an independent company which
provides an anonymous reporting
service for hundreds of companies
worldwide.
http://finance.southtexascollege.edu/businessoffice/forms/alerts/
Alert_2006_08.pdf
Doing What’s Right

This service is not intended as a substitute for
speaking directly with management.

It is an option that is always available if you want to
help, but prefer not to give your
name.
Fraud Hotline Flyer
http://finance.southtexascollege.edu/businessoffice/forms/Fraud_Hotline_Flyer.pdf
Fraud Survey
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http://finance.southtexascollege.edu/businessoffice/survey.html
Questions