Fraud Program : About reporting suspected fraud or losses

​State law requires that all state agencies and local governments immediately notify the State Auditor's Office if they know or suspect a loss of public resources.

We encourage governments and agencies to develop policies and procedures that help them comply with this law. Be sure to set out clearly who is responsible for keeping managers and employees informed about the reporting requirements, and how you will make sure you tell us about losses promptly.

If you suspect or detect a loss of public funds or assets or other illegal activity, this is what to do:

  • Report the loss to our Office using this online reporting form.
  • Protect the accounting records from loss or destruction. All original records related to the loss should be secured in a safe place until our audit has been completed.
  • Notify others who need to know about the loss. This may include the governing body, agency head or deputies, chief financial officer or internal auditor, depending upon the circumstances. Telling your legal counsel may also be appropriate.
  • Don't enter into a restitution agreement with an employee unless it has been approved by the State Auditor and the Attorney General.
  • For most situations, you will need to file a police report with the appropriate local or state law enforcement agency. Contact our Office for guidance if you have questions about the necessity or timing of a police report.

You are not required to tell us about these kinds of problems:

  • Normal and reasonable "over and short" situations from cash receipting operations. Record these transactions in the accounting system as miscellaneous income and expense respectively, and monitor this activity by cashier for any unusual trends.
  • Reasonable inventory shortages identified during a physical count. Record inventory adjustments in the accounting system.
  • Breaking and entering or vandalism of property.

Please do not attempt to correct the loss without reporting to the authorities identified above. In addition, state law requires written approval of the State Auditor and Attorney General before state agencies and local governments make any restitution agreement, compromise, or settlement of loss claims related to a misappropriation.

If you have any questions about these procedures, please contact Fraud Manager Sarah Walker at (509) 454-3621.

 
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