FLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF ACCOUNTING AND AUDITING Presented to Purchasing Card Administrators February 17, 2012 MISSION STATEMENT • The mission of the Office of Fiscal Integrity is to detect and investigate the misappropriation or misuse of state assets in a manner that safeguards the interests of the State of Florida and its taxpayers. 2 INVESTIGATIVE AUTHORITY 17.04 To settle accounts of those entrusted with property, funds or moneys of this state; and those indebted to the state • OFI may conduct investigations • Shall refer violations for state or federal prosecution 17.0401 Confidentiality of information relating to financial investigations • Information relative to investigations is confidential until the investigation is completed 17.05 Subpoenas; sworn statements; enforcement proceedings • OFI may issue subpoenas, administer oaths, and examine witnesses 20.121 Department Of Financial Services • OFI shall function as a Criminal Justice Agency • May conduct investigations within or outside this state 3 ORIGIN OF CASES • Internal Referrals From Within DFS • Inspectors General • FBI, FDLE, and Local Law Enforcement • Other Governmental Agencies • Consumer Complaints 4 FOLLOWING THE MONEY • Financial Data Will Prove If a Crime Has Been Committed • Subpoenaed Bank Statements (with Signature Cards) Will Reveal Financial Transaction History: o Other Bank Accounts/Credit Cards Being Used o All Transactions • Spreadsheets Are Created to Analyze: o Timeline of Account Activity o Who Spent the Funds, and When and Where They Were Spent 5 FOLLOWING THE MONEY • Questionable Items Are Researched and Flagged • Examples of Questionable Transactions: o Checks Written Payable to Cash o Payments to Subsidiaries or Possible Shell or Ghost Companies • Final Outcome – Financial Analysis Helps Explain the Crime and is Matched With Analyst's Diagrams and Charts for Ease of Understanding the Case 6 TYPES OF FRAUDS INVESTIGATED • • • • • • • Contract and Grant Fraud Unclaimed Property Fraud Electronic Fund Transfer (EFT) Fraud State Travel / Purchasing Card and Payroll Fraud Ghost Contractors / Ghost Employees Theft of State Property Fraud Through Counterfeit Warrants / Fraudulent Debits to State Treasury Accounts 7 TYPICAL CRIMINAL CHARGES IN OFI CASES • • • • • • • • Mail Fraud / Wire Fraud Aggravated Identity Theft Scheme to Defraud Aggravated White-Collar Crime Racketeering Grand Theft Money Laundering Official Misconduct 8 P-Card Investigations • Suspected fraudulent transactions are referred by the Statewide P-card Office directly to OFI • OFI interviews witnesses and uses the CFO’s subpoena authority to obtain necessary documents and records from vendors and financial institutions • Many cases involve receipts that are “lost”, followed by a fraudulent replacement receipt being created • Many P-card frauds occur because of a lack of oversight 9 P-Card Investigations • Agencies need to do a thorough job of monitoring • Approvers frequently fail to review the transaction • Many times, approvers fail to require adequate descriptions of the items being purchased • Be wary of generic descriptions (like office supplies) or no description for items being purchased • Check a vendor’s website if there is a question about legitimacy • Ask yourself whether the vendor name and the description make sense 10 P-Card Investigations • The administrator should be running queries and looking for patterns of possible abuse/misuse • The approvers need to be knowledgeable AND monitor that the agency needs what is being purchased & confirm agency is getting what was ordered. • If OFI or any other law enforcement agency investigates, the administrator and approvers will be interviewed to determine how the scheme was perpetrated. 11 CONTACT: Steve Horn steven.horn@myfloridacfo.com 850-413-5553 200 East Gaines Street Tallahassee, FL 32399