Okaloosa County BOCC — April 1, 2014 — Anti-Fraud Policy DRAFT

CHAPTER XXXII – BOARD OF COUNTY COMMISSIONERS ANTI-FRAUD POLICY Section A – Purpose The Okaloosa County Anti-Fraud Policy (“Policy”) is hereby established to facilitate the development of controls that will aid in the detection and prevention of fraud, waste and abuse of the County’s financial resources, property, information and other assets, as more fully described herein; provide for the investigation of suspected fraud, waste or abuse; and provide for consequences for engaging in any manner of fraud, waste or abuse. It is the intent of the County to promote consistent organizational behavior by providing guidelines and assigning responsibility for the development of controls and conduct of investigations involving allegations of fraud, waste or abuse. The County will not tolerate the commission or concealment of acts involving fraud, waste, or abuse. Allegations of such acts will be fully investigated, which may result in legal action if warranted. All employees are responsible for reporting suspected instances of fraud, waste, and abuse in accordance with this Policy. Section B – Scope of Policy This Policy applies to any suspected fraud, waste or abuse involving employees, elected officials, members of advisory boards, consultants, vendors, contractors, and/or any other parties or entities that have a business relationship with the County. Any investigative activity required will be conducted without regard to the suspected wrongdoer’s length of service, position, title, or relationship to the County or any elected official, consultant, vendor, contractor, or employee. Matters concerning an employee’s actions or conduct should be resolved by the management of that employee’s department and the Human Resources Department. If there is any question as to whether an action constitutes fraud, waste or abuse, please contact the Human Resources Director or County Administrator for guidance. Section C – Policy Management is responsible for the effectiveness and efficiency of County operations, including protection of County assets from fraud, waste and abuse. Management has the primary responsibility for the implementation of internal controls to deter and detect fraud. 1) Definitions a) Fraud: There are two basic categories of wrongdoing which would constitute fraud: (i) the intentional misstatement of financial information; and (ii) the misappropriation of assets (or theft). Fraud consists of an illegal act (the intentional wrongdoing) and/or the concealment of such act and deriving a benefit from such acts. b) Waste: Waste means the thoughtless or careless expenditure, consumption, mismanagement, use or squandering of resources owned or operated by the County to the detriment or potential detriment of the County. c) Abuse: Abuse means the excessive or improper use of something, or the use of something in a manner contrary to the natural or legal rules for its use; the intentional destruction, diversion, manipulation, misapplication, maltreatment, or misuse or resources owned or  operated by the County. Not all instances of waste and abuse necessarily would constitute fraud but they could. Each member of management for the County and each department will be familiar with the types of improprieties that might occur within his/her area of responsibility and be alert for any indication of fraud, waste or abuse. 2) Actions Constituting Fraud, Waste or Abuse The terms fraud, waste and abuse include, but are not limited to: a) Any dishonest or fraudulent act; b) Misappropriation of funds, securities, equipment, supplies, or other assets; c) Impropriety in the handling or reporting of money or financial transactions; d) Profiteering as a result of insider knowledge of County activities; e) Forgery or alteration of documents (checks, contracts, purchase orders, invoices, etc.); f) Accepting or seeking anything of material value (more than $100) from contractors, vendors, or persons providing services/materials to the County; g) Destruction, removal, or inappropriate use of records, furniture, fixtures, vehicles and equipment; h) Misrepresentation of information on documents (employment history, timesheets, leave records, travel reimbursement requests, financial records, etc.); i) Serious abuse of County time such as unauthorized time away from work, falsification of work hours reported, or excessive use of County time for personal business; j) Authorizing or receiving payment for goods not received or services not performed; k) Vendor kickbacks; l) Misuse of authority for personal gain; m) Any computer related activity involving the alteration, destruction, forgery, or manipulation of data for fraudulent purposes; n) Inappropriate use of County provided electronic devices such as computers, tablets, cell phones, pagers, or email; o) Any violation of local, state and federal laws related to dishonest activities or fraud. 3) Reporting a) Any fraud, waste or abuse that is detected or suspected must be reported immediately to the Human Resources Director, the County Administrator, a County Commissioner, or the County Attorney.  b) Anyone who receives a report of fraud, waste or abuse must immediately notify the Human Resources Director who shall coordinate all investigations with the County Administrator. c) Law Enforcement, external auditors and/or other professionals may also be involved as appropriate. d) The County also has a whistleblower policy that provides a confidential method to file complaints. The County website contains a whistleblower icon which provides reporting options to several members of management to include the Board of County Commissioners, Human Resources Department and the County Administrator. e) It shall be a violation of this Policy for any person to make a baseless allegation of fraud, waste or abuse that is made with reckless disregard for truth and that is intended to be disruptive or to cause harm to the County or another individual. Section D – Prohibition Against Retaliation No person who has acted in accordance with the requirements of this Policy shall be dismissed, or threatened with dismissal; disciplined, suspended or threatened with discipline or suspension; penalized, intimidated or coerced for reporting any suspected fraud, waste or abuse. This provision shall not be construed as an exemption from any other County policies, rules or regulations. Section E – Reporting Procedures Great care must be taken in the investigation of suspected fraud, waste or abuse, so as to avoid mistaken accusations or alerting suspected individuals that an investigation is under way. Anyone who discovers or suspects fraud, waste or abuse shall contact the Human Resources Director, the County Administrator, a County Commissioner, or the County Attorney immediately and should not attempt to personally conduct investigations or interviews/interrogations related to any suspected fraud, waste or abuse. The reporting individual may remain anonymous and file a complaint via the website icon. All inquiries concerning the activity under investigation from the suspected individual, his/her attorney or representative, or any other inquirer should be directed to the Human Resources Department. The proper response to any inquiries concerning the status of an investigation is: “I am not at liberty to discuss this matter.” Under no circumstances should any reference be made to “the allegation,” “the crime,” “the fraud,” “the forgery,” “the misappropriation,” or any other specific reference. The reporting individual should be informed of the following: 1) Do not contact the suspected individual in an effort to determine facts or demand restitution; 2) Do not discuss the case, facts, suspicions, or allegations with anyone unless specifically asked to do so by the County Administrator or Human Resources Director. Section F – Investigation Responsibilities The County Administrator and the Human Resources Department has the primary responsibility for conducting the preliminary investigation of all suspected acts as defined in the Policy. If the preliminary investigation or assessment of the situation indicates that fraud, waste or abuse may have occurred, senior management will involve law enforcement, the external auditors or other Certified Fraud Examiners (CFE), and/or other professionals as appropriate. These parties shall issue reports to appropriate designated personnel and, if appropriate, to the Board of County Commissioners. Decisions to prosecute or refer the investigation results to the appropriate law enforcement and/or regulatory agencies for independent investigation will be made in conjunction with the County Attorney, senior management, and the County Administrator as will final decisions on disposition of the matter. The County Administrator and Human Resources Department shall treat all information received confidentially to the extent permitted by law. Section G – Sanctions Employees found to have violated this Policy shall be subject to disciplinary action up to and including dismissal. The type of discipline administered will depend on the severity of the conduct as well as any other factors presented in the particular circumstances, and will be administered in accordance with prevailing County policy. The contractual or other business relationship of individuals or entities associated with the County found to have violated this Policy shall be subject to review, with the possible modification or termination of such contractual or business relationship. Section H – Authorization for Investigating Suspected Fraud, Waste or Abuse The County Administrator, Human Resources Director and their designees shall have: 1) Free and unrestricted access to all County records and premises, whether owned or rented; 2) The authority to examine, copy, and/or remove all or any portion of the contents of files, desks, cabinets, and other storage facilities on the premises without prior knowledge or consent of any individual who might use or have custody of any such items or facilities when it is within the scope of their investigation. Section I – Administration The Human Resources Director, with guidance from the County Administrator, is responsible for the administration, revision, interpretation, and application of this Policy. The Policy shall be reviewed periodically and revised as needed.