Reso 1482 10/2015RESOLUTION NO. 1482
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE VALLECITOS WATER DISTRICT
ESTABLISHING FRAUD IN THE WORKPLACE POLICY
SECTION 1: PURPOSE AND SCOPE
To establish clear policy and procedures for identifying clarifying acts that are
considered to be fraudulent; describe the steps to be taken when fraud or other related
dishonest activities are suspected; and provide procedures to follow in accounting for
missing funds, materials, restitution and recoveries.
This policy applies to all employees, officers, Board Members and consultants or
contractors providing services to the Vallecitos Water District ("District").
SECTION 2: GENERAL
The District is committed to protecting its assets against the risk of loss or misuse. This
policy identifies responsibilities and directs the appropriate party to identify and promptly
investigate any possibility of fraudulent or related dishonest activities against the District
and, when appropriate, to pursue legal remedies available under the law.
A: DEFINITIONS:
1. Fraud includes but is not limited to:
a. Claim for reimbursement of expenses that are not job-related
or authorized by District policy or the District Employee
Handbook.
b. Forgery, falsification, or unauthorized alteration of
documents or records, including but not limited to checks,
promissory notes, time sheets, independent contractor
agreements, purchase orders, budgets, etc.
C. Misappropriation of District assets, including but not limited
to funds, securities, supplies, furniture, vehicles, equipment,
tools, etc.
d. Inappropriate use of District resources, including but not
limited to labor, time, and materials.
e. Improprieties in the handling or reporting of money
transactions.
f. Failure to report known fraud or inappropriate use of District
resources.
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g. Knowingly authorizing or receiving payment for goods not
received or services not performed.
h. Computer-related activity involving unauthorized alteration,
destruction, forgery, or manipulation of data or
misappropriation of District -owned software.
i. Misrepresentation of information on documents.
j. Theft of equipment or goods.
k. Seeking or accepting anything of material value from those
doing business with the District including vendors,
consultants, contractors, developers, lessees, applicants,
and grantees. Materiality is determined by the Fair Political
Practices Commission's Gift and Honoraria limits each year.
I. Any other conduct, actions or activities treated as fraud or
misappropriation under any federal or state law, rule or
regulation, or any apparent violation of any such Federal or
state law, rule or regulation.
2. District Employee — Any regular or part-time employee who receives
compensation from the District. For purposes of this Policy, the term
"District Employee" shall also include any individual member of the
Board of Directors, as well as any volunteer who provides services to
the District through an official arrangement with the District or a District
organization.
3. Management — Any District Employee or other designated individual
who has day-to-day responsibility to manage or supervise District
employees, resources or assets.
4. Board of Directors — Any elected member of the District Board of
Directors
5. Fraud Investigation Committee ("Committee") — Group of individuals
appointed by the General Manager or the President of the Board of
Directors. Committee members, other than District Legal Counsel,
serve at the pleasure of the General Manager or President of the
Board. The Committees shall be established based upon the following:
a. District Employee, if the claim of fraud involves any employee
other than the District's General Manager, the Committee shall
consist of the General Manager, District Legal Counsel and any
other persons appointed to the Committee by the General
Manager.
b. General Manager, if the claim of fraud involves the General
Manager, the Committee shall consist of the President of the
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Board of Directors of the District, District Legal Counsel and
those persons appointed to the Committee by the President of
the Board, with the Board's consent and agreement.
c. Board Member, if the claim of fraud involves any Board
Member, the Committee shall consist of the General Manager,
District Legal Counsel and any other persons appointed to the
Committee by District Legal Counsel.
d. Legal Counsel, if the claim of fraud involves District Legal
Counsel, the Committee shall consist of the General Manager,
President of the Board and those persons appointed by the
President of the Board, with the Board's consent and
agreement.
6. External Auditor — The independent audit professionals who perform
annual audits of the District's financial statements and are contracted
by the District's Board of Directors.
B. All reported or suspected acts of fraud, misappropriation, or other similar
irregularity shall be fully investigated by the Committee. A confidential,
objective and impartial investigation will be conducted regardless of the
party, position, title, length of service or relationship with the District of any
party who might be or become involved in or becomes the subject of such
investigation.
C. Employees will be granted whistle -blower protection when acting in
accordance with this policy and applicable statutes including, Labor Code
Section 1102.5 and Government Code Section 12653, so long as the
employee reporting has not engaged in activity that violates this policy.
When informed of a suspected fraud, neither the District nor any person
acting on behalf of the District shall:
1. Dismiss or threaten to dismiss the employee,
2. Discipline, suspend, or threaten to discipline or suspend the
employee,
3. Impose any penalty upon the employee, or
4. Intimidate or coerce the employee.
Violations of the whistle -blower protection will result in discipline up to and
including termination.
D. In no case shall any District employee or Board member discuss the
alleged fraud or investigation with the media or any other person other
than the General Manager or the President of the Board after consultation
with the District's Legal Counsel and or Committee.
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SECTION 3: RESPONSIBILITIES AND PROCEDURES
A. Board of Directors Responsibilities
1. If a Board Member has knowledge of, or suspects fraud has
occurred, they shall immediately contact the General Manager. If
the suspected fraud activity involves the General Manager, they
shall contact the President of the Board and the District's Legal
Counsel.
2. The Board Member shall not attempt to investigate the suspected
fraud or discuss the matter with anyone other than reporting the
suspected fraud.
B. Management Responsibilities
1. Department managers and supervisors are responsible for
monitoring and following established purchasing controls to provide
reasonable assurance for the prevention and detection of fraud.
Managers and supervisors should be familiar with the types of fraud
that might occur within their area of responsibility and be on alert
for any indications of such conduct.
2. When an improper activity is detected or suspected, management
should determine whether an error or mistake has occurred or if
there may be dishonest or fraudulent activity. If management
determines a suspected activity may involve fraud or related
dishonest activity, they should contact their immediate supervisor or
the District's General Manager. If the activity involves the General
Manager, it shall be reported to the President of the Board or the
District's Legal Counsel.
5. Fully cooperate with the Committee and law enforcement agencies
in the detection, reporting, and investigation of criminal acts,
including the prosecution of offenders.
6. Provide full and unrestricted access to all appropriate non -
confidential records and personnel, furniture, desks, and computers
as there is no assumption of privacy.
7. During and after an investigation of suspected dishonest or
fraudulent activities, the following types of statements and activities
shall be avoided:
a. Accusations of any type.
b. Alerting suspected individuals that an investigation is
underway.
C. Treating employees unfairly.
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d. Statements that could lead to claims of false accusations or
other offenses.
e. Making contact (unless requested) with the suspected
individual to determine facts or demand restitution. Under
no circumstances should there be any reference to "what
you did", "the crime", "the fraud", "the misappropriation", etc.
f. Engaging in discussion of the case with anyone other than
employees who have a need to know such as the General
Manager, Committee, District Legal Counsel or law
enforcement personnel.
8. Take appropriate corrective and disciplinary action, up to and
including termination, after consulting with the Human Resources
Department and Legal Counsel, in conformance with established
policies.
C. Employee Responsibilities
1. An employee who observes, knows of, or suspects' fraudulent
activity must report the incident to their supervisor for reporting to
the proper management official.
2. When the employee believes the supervisor may be involved in the
inappropriate activity, the employee shall make the report directly to
the next higher level of management and/or the General Manager.
If the activity involves the General Manager, it shall be reported to
the President of the Board or the District's Legal Counsel.
3. The reporting employee shall refrain from further investigation of
the incident, confrontation with the alleged violator, or further
discussion of the incident with anyone, unless requested by the
General Manager, Committee, the District's Legal Counsel, or law
enforcement personnel.
D. Fraud Investigation Committee ("Committee") Responsibilities
1. Upon assignment by the General Manager or the President of the
Board, the Committee will promptly and thoroughly investigate the
suspected fraud.
2. At the conclusion of the investigation, the Committee will document
the results in a confidential memorandum for consideration and/or
action by the General Manager or Board of Directors. If the report
concludes that the allegations are well-founded and, in consultation
with District's Legal Counsel, has determined that a crime or
criminal fraud has likely occurred, a report will be made to the San
Diego County Sheriff's office for appropriate action.
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3. The Committee's results will be reported to the General Manager.
In the event the investigation involves the General Manager, the
results will be reported to the President of the Board to advise the
Board of Directors.
4. The General Manager or the President of the Board, in cases
involving the General Manager, will take appropriate action based
on the District's disciplinary procedures. Disciplinary action can
include termination, and referral of the case to the District
Attorney's Office for possible prosecution.
5. The General Manager or the President of the Board is authorized to
pursue every reasonable effort, including court ordered restitution,
to obtain recovery of District losses from the offender, or other
appropriate sources.
SECTION 4: EXCEPTIONS
There will be no exceptions to this policy unless provided and approved by the General
Manager or the President of the Board and the District Legal Counsel.
PASSED, APPROVED AND ADOPTED by the Board of Directors of the
Vallecitos Water District at a regular meeting held on 21St day of October, 2015 by the
following roll call vote:
AYES: ELITHARP, HERNANDEZ, MARTIN, SANNELLA, EVANS
NOES:
ABSTAIN:
ABSENT:
Betty D. vans, President
Board of Directors
Vallecitos Water District
ATTEST:
Dennis O. Lamb, Secretary
Board of Directors
Vallecitos Water District