Fraud Program : Guidelines

​Investigations : FraudGuidelines : Washington State Guidelines

Reporting possible misappropriations of public resources

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 regarding this law, including designating the individual who is responsible for informing managers and employees about the reporting requirements and ensuring our Office is promptly notified about losses.

What should I do if I suspect a loss?

Entities should take the following actions when a loss of public funds or assets or other illegal activity is suspected or detected:
  • Report the loss to our Office using the form on our website.
  • 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. Providing notification to your legal counsel may also be appropriate.
  • Don’t enter into a restitution agreement with an employee prior to an audit to establish the amount of loss.
  • File a police report with the appropriate local or state law enforcement agency when advised to do so by our Office.

Are there circumstances in which I should not contact the State Auditor's Office?

Entities are not required to report the following to our Office:

  • 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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