Fraud & Ethics Training

Fraud and Ethics: Our
responsibilities as employees
Presented by:
Elizabeth G. Henry, Internal
Laredo Independent School
September 2014
What is Fraud?
 -the intentional false representation
or concealment of a material fact for the purpose of
inducing another to act upon it to his or her injury.
CFC (Local) Accounting Audits
 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* (Association of Certified Fraud Examiners)
*2008 Report to the Nation on Occupational Fraud and Abuse. Copyright 2008 by the Association of
Certified Fraud Examiners Inc.
Fraud Triangle
Unethical tone at the top
Lack of supervision
Knowledge of weak controls
Ineffective controls
Belief “won’t get caught”
Desire for status symbols—house, car,
vacations, etc.
Unusually high personal debt (gifts, etc.)
Excessive gambling habit (football “pots”)
Alcohol or drug problems
Undue family or peer pressure to succeed
Pressure placed on employees and/or
administration/directors to perform
Employee feels the
district owes them;
therefore they
compensate themselves
Feeling of insufficient job
recognition for their
Personal need for more
Employee’s way of
rewarding themselves (“I
deserve it!)
Employee feels he/she is
doing more than what
they get paid for (Need to
get something back)
What makes us vulnerable?
Lack of segregation of
duties (have control of
Insufficient funds for
program implementation
Poor school management
supervision (Who’s
Lack of internal controls
Untrained personnel
Management’s thinking
“he/she wouldn’t do that”
Examples of Fraud
Manipulation of collections of district
Unauthorized use of funds/credit cards
Alteration/falsification/destruction of
documentation and/or school records
and/or student records
“Borrowing” district funds and/or any
district assets
Taking copy paper, pencils, etc. home
Some “Red Flags” in School
Altered/missing documentation
Untimely deposits
Diverting receipts
Fictitious vendors
Non-compliance with established policies,
procedures, and regulations
Incomplete reports and/or missing
Observations over the years
Questionable Conflict of Interests
Negligence in the maintenance of school
Improper accountability of district monies
Inadequate employee record maintenance
(time worked)
Circumventing of district procedures
Campus bookkeeper took close to
$19,000 in C & SA funds
Alteration of student records
Cheerleading Sponsor(s) have left the
campuses indebted to vendors with
Principal authorization
Unauthorized editing of employee’s time
Campus held fundraiser during the school
day and deposited the monies in the PTO
District employee performing “non-district
duties” during district time
Secretary altered daughter’s time cardsreflecting at times as though she was
working when in reality she was not
“Borrowing” of student monies
Fraud consequences in
Administrative functions
Lack of segregation of duties (Who’s responsible for
Opportunity to utilize system weaknessessystem overrides
Untrained personnel- unfamiliar with
Lack of internal controls
Inappropriate access (Too much control?)
Be aware and stay alert
Know the “Red Flags” of fraud in your area
of responsibility
Be familiar with the types of fraud
TAKE CHARGE—Be Responsible and
Ethical employees
Steps for Prevention
Management sets the toneEstablishes the ground
Conduct a Review of:
Overall Campus or
Department internal
controls-ask yourselfhow strong are they?
Ensure there is an
adequate segregation of
Provide or secure
adequate training
Enforce district policies
and procedures
Board Policies
Follow up and familiarize yourself with the
CAA (Local) Fiscal Management Goals and
Objectives Financial Ethics
CFC (Local/Legal ) Account Audits;
DH (Local/Legal) Employee Standards of
DH (Exhibit) Employee Standards of Conduct
DH ( Regulation) Code of Ethics and Standards
of Conduct
Fraud Policy
“All employees are responsible for the
detection and prevention of fraud,
misappropriation, and other irregularities.
Each administrator shall be familiar with
the types of improprieties that might occur
within his or her area of responsibility, and
be alert for any indication of irregularity.”
CFC (Local) Accounting Audits
Fraud Adds Up---Responsibility
As employees, we are responsible for our
job responsibilities and actions
As Campus Principals, you are
responsible for all that takes place at your
As Directors, you are responsible for all
that takes place at your department(s)
Be aware of what is happening at your
So what if I commit fraud?
“If an employee is found to have committed
fraud or financial impropriety, the
Superintendent or designee shall take or
recommend appropriate disciplinary
action, which may include termination of
CAA (Local) Fiscal Management Goals and Objectives
Financial Ethics
Keep in mind
It is not possible to cover all potential
situations as no set of rules and
procedures will ever include such,
therefore, the District must rely upon the
good faith, good judgment and high moral
standards of its employees as their main
principle guide to ethical conduct. As
public servants, this is expected from our
Z I acknowledge that I, as an employee of
the Laredo Independent School District
have read and understood this
presentation as well as, all related Fraud
and Ethics related policies addressed and
referenced. As a district employee, I will
comply with such.
Thank You
If you have any questions, feel free to contact the
Internal Audit Department
Elizabeth G. Henry, Internal Auditor
[email protected]
3006 Hendricks St.

similar documents