Reporting possible misappropriations of public
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
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
- Breaking and entering or vandalism of
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)