6. Reporting and Investigating Dishonesty and Fraud
D.6.01 Internal Control Systems:
Each LSCS manager is to be aware of the types of improprieties that might occur within his or her area of responsibility, to establish appropriate operating rules that will permit the timely identification of business irregularity, and to report any apparent irregularities to the director of internal audit. Any required investigative activity will be conducted without regard to the suspected wrong-doer's length of service, position/grade, or relationship to other internal or external persons.
D.6.02 Actions Constituting Fraud:
Any act of dishonesty or fraud, including those listed below, is covered by this policy:
a. Forgery or alteration of a check, bank draft or other financial document, or account belonging to the System;
b. Falsifying time sheets, expense reports or other reporting documents;
c. Misappropriation of funds, securities, supplies, or other assets;
d. Impropriety in handling or reporting of money, or financial transactions;
e. Profiting as a result of insider knowledge of System activities;
f. Disclosing confidential or proprietary information to outside parties;
g. Accepting or seeking anything of material value from vendors or persons providing services/material to LSCS, with the, exception of a perishable gift with a value of less than $50, and intended for a group of employees;
h. Destruction, removal or disappearance of records, furniture, fixtures, or equipment, or other assets;
i. Unauthorized conversion, alteration or tampering with any System record, for any purpose; and
j. Any similar or related irregularity.
D.6.03 Investigation Responsibilities:
The internal audit department is responsible for the initial investigation and shall promptly notify the Location Executive Officer, General Counsel, and the Vice Chancellor for Business Services/Chief Financial Officer of the initiation of the review. If any person who would otherwise be notified is a fact witness, or in any other manner may be potentially implicated or involved in the investigation, he or she shall not be notified, or involved in the administrative oversight or reporting of the conduct of the investigation. Once a factual investigation establishes fraud, the System's General Counsel and Chief Financial Officer shall communicate it to the Chancellor, and the Chancellor shall communicate the findings to the Audit Committee of the Board.
Decisions to prosecute or to turn the matter over to the law enforcement authorities and/or regulatory agencies for independent investigation, and all final decisions regarding the disposition of the case, will be made by the Chancellor, in consultation with the Board of Trustees.
Decisions regarding the continuing employment of persons who are involved in or failed to take appropriate actions to protect against dishonest or fraudulent conduct will be made in accordance with Board Policies regarding discipline and discharge.
D.6.04 Non-Retaliation:
Any employee who reports suspected fraudulent activity, in good faith, shall be protected against any retaliation for making such a report. The reporting member of the campus community shall refrain from confrontation with the suspect, further examination of the incident, or further discussion of the incident with anyone other than the employee's or student's supervisor, or others involved in the resulting review or investigation. Persons found to be making frivolous claims under this Policy will be disciplined, up to and including discharge of employment, for an employee or expulsion from the System, for a student.
D.6.05 Confidentiality:
The Director of Internal Audit may accept and initiate an investigation based on confidential information received from an LSCS employee or student who suspects dishonest or fraudulent activity. Results of investigations conducted by the Internal Audit Department will be disclosed and discussed only with those persons associated with LSCS who have a legitimate need to know, in the performance of their job duties and responsibilities.