Fraud Prevention and Detection Responsibilities
UT Austin believes that the creation of a culture of ethics is fundamental to combating fraud, as is raising the level of awareness and understanding of policies and their role in preventing and detecting fraud. Toward its commitment to maintaining high standards, UT Austin at all times requires all employees to act with honesty and integrity and to safeguard the resources for which they are responsible.

University management officials and employees with managerial or supervisory duties are responsible for creating an environment that encourages integrity and deters dishonest behavior. Additionally, it is the responsibility of management to establish and implement internal control systems and procedures to prevent and detect irregularities, including fraud, waste and abuse. Management at all levels should be aware of the risks and exposures inherent in their areas of responsibility and shall establish and maintain proper internal controls to provide for the security and accountability of all resources entrusted to them.

University employees are responsible for ensuring that resources entrusted to them by the University are used ethically, prudently and for their designated purpose.

University management and employees should:

1. Set an appropriate tone at the top - All levels of management are responsible for setting the appropriate tone of intolerance for fraudulent acts by displaying the proper attitude toward complying with laws, rules, regulations and policies. Reinforcing personal responsibility and accountability will provide increased protection to the assets and financial interests of the University.
2. Document controls – Management should establish and maintain a system of internal controls which provides reasonable assurance that fraud will be prevented or detected.
3. Be aware of potential fraud – All employees, particularly administrators and managers, shall familiarize themselves with risks of dishonest or fraudulent activities that could occur in their area of responsibility and should be alert to any indications of dishonest or fraudulent activities.
4. Secure property and assets – All employees are responsible for safeguarding University resources and ensuring they are used only for authorized purposes in accordance with University policies and applicable law.
5. Review and reconcile accounts – Employees in charge of budgets should monitor records of expenditures and ensure they are reconciled on a monthly basis and monitored for reasonableness.
6. Separate duties – Management should ensure that there is more than one person involved in key duties, especially those relating to the acquisition of assets (purchasing), their custody (inventory, receiving), and related recordkeeping (accounts receivable, payroll, accounts payable).
7. Educate and coach employees – Management should ensure that all new and current employees are regularly made aware of their responsibilities regarding the prevention and reporting of suspected fraud.

Employees, students, and affiliates of UT Austin who have a reasonable basis for believing that fraud, waste, or abuse has occurred shall promptly report the suspected activity to the Office of Internal Audits, University Compliance Services, the University of Texas Police Department (UTPD), the Office of the Vice President for Legal Affairs, the Compliance and Ethics Hotline, or the State Auditor’s Office. If the suspected fraudulent activity involves a member of the Office of Internal Audits, University Compliance Services, UTPD, or the Office of the Vice President for Legal Affairs, the activity should be reported to the president.

 

Departmental management and other management officials must report suspected fraud, waste, or abuse and all allegations of such activity made to them immediately to the Office of Internal Audits, except that any department head or management official who wishes to remain anonymous should report concerns to the Compliance and Ethics Hotline.

 

Employees or management personnel who suspect or detect such activity must not initiate investigations on their own or alert the suspected individual(s) of an impending investigation.

 

Great care must be taken in dealing with suspected fraudulent activities so as to avoid erroneous accusations or alerting suspected individuals that an investigation is underway.
 

Prohibition of Retaliation

The University prohibits and does not tolerate retaliation against any individual who in good faith files a complaint of suspected illegal, dishonest, or fraudulent conduct or is a witness or participant in the complaint or investigation of such suspected conduct. Engaging in prohibited retaliation may result in disciplinary action, up to and including dismissal from the University.

 

An individual who files a complaint that the individual knows or believes to be false is not protected by this provision prohibiting retaliation and may be subject to disciplinary action, up to and including dismissal from the University.

 

The University encourages any person who believes he or she has been subject to prohibited retaliation, or observes or is otherwise aware of an incident of prohibited retaliation in violation of this policy, to report the incident promptly to the Compliance and Ethics Hotline or University Compliance Services.
 

Cooperation During Investigations

The University is committed to creating an environment of responsible and ethical behavior and relies on faculty, staff, and student employees to cooperate with investigations into alleged fraud, waste or abuse. Investigations into such matters may be conducted by the University, including but not limited to the Office of Internal Audits; UTPD; University Compliance Services; the Office of the Vice President for Legal Affairs; the Information Security Office; or by federal, state or local law enforcement agencies. Employees are expected to maintain the confidentiality of information regarding suspected cases of dishonest or fraudulent activity under investigation to the extent permitted by law and to maintain paper and electronic records in accordance with the University’s record retention schedule and instructions from the Office of the Vice President for Legal Affairs. Failure to cooperate and maintain confidentiality as requested by investigators may result in disciplinary action, up to and including termination of employment.

 

Disciplinary Action During Investigations

During an ongoing investigation, management should consult with the Office of the Vice President for Legal Affairs, Human Resources, and the Office of Internal Audits before taking any disciplinary action, including termination, against either the individual under investigation or an individual who has provided information relevant to the investigation.
 

Recovery of Assets

The University will take appropriate action to recover any assets lost as a result of fraud, waste or abuse. Actions to recover such losses include the following:

1. Voluntary Return or Repayment. Generally, action to recover losses should not be taken until an investigation has been completed. At any time, however, University officials may accept voluntary offers to reimburse the University for losses, including offers of partial reimbursement. The vice president for Legal Affairs must approve offers of reimbursement in advance of acceptance. Repayments should be appropriately receipted and deposited to a University cost center in accordance with University fiscal policies. Officials accepting repayment should inform the employee that such offers will not cause an investigation to stop, relieve the employee of liability for future claims, or prevent prosecution under criminal law.
2. Demand for Repayment. If an investigation concludes that an individual’s or entity’s actions have resulted in loss of University assets due to fraud, waste, or abuse, the vice president of Legal Affairs or other appropriate University officials should demand repayment in writing from the person or entity.
3. Withholding of Salary and Wages. To the extent permitted by law, if an employee is discharged for theft or misappropriation of funds, the University may recover losses resulting from the employee’s actions by withholding part or all of the amount owed from his or her paycheck following consultation with the vice president for Legal Affairs. The amount to be withheld must be communicated to the employee in writing and promptly to the Payroll office. Before withholding, the University will attempt to reach a written agreement with the discharged employee on the amount to be withheld. To the extent permitted by law, the University may withhold funds regardless of whether an agreement is reached.
4. Legal Action. When full recovery of assets lost to fraud, waste, or abuse is not realized using other means, legal action to obtain a judgment may be initiated. The chief financial officer (or designee) and the vice president for Legal Affairs must approve this action.

Investigation Responsibilities

The chief audit executive must be made aware of all suspected cases of dishonest or fraudulent activity. When an investigation reveals suspected criminal activity or is initiated because of an allegation of criminal activity, UTPD must be notified immediately. All requests for information and assistance related to investigations conducted by auditors or investigators of federal or state agencies that are concerned with potential dishonest or fraudulent activities shall also be forwarded immediately to the chief audit executive, who shall consult with the vice president for Legal Affairs.

1. Office of Internal Audits

2. University of Texas Police Department (UTPD)

3. Office of the Vice President for Legal Affairs

4. Chief Information Security Officer