Fraud, Waste, and Abuse
The Western Riverside Council of Governments (WRCOG) is committed to creating and supporting a workplace culture that promotes integrity, ethical decision-making, honesty, and accountability and to prevent fraud, waste, and abuse. As such, this Policy is intended to establish and maintain a fair, ethical, and honest business environment for all employees, volunteers, consultants, contractors, and anyone else with whom WRCOG has a business relationship. The purpose of this Policy is to establish a common understanding of fraud, waste and abuse, the methods and tools that WRCOG has implemented to prevent these concerns, and the actions that should be taken if suspect fraud, waste, or abuse is suspected of occurring.
This Policy does not supersede or preclude WRCOG from complying with applicable federal, state, or local laws or guidelines that require measures that are more prescriptive and/or restrictive than provided here.
This Policy applies to all WRCOG employees (both permanent and temporary), volunteers, outside agencies, consultants, contractors, and any other persons or entities doing business with WRCOG. This Policy applies to any suspected or actual fraud, waste, or abuse against WRCOG, or the public served by this organization.
About Fraud, Waste, and Abuse of Public Funds or Assets
California Government Code Section 53087.6(f)(2) collectively defines “fraud, waste or abuse” as “any activity by a local agency or employee that is undertaken in the performance of the employee’s official duties, including activities deemed to be outside the scope of his or her employment, that is in violation of any local, state, or federal law or regulation relating to corruption, malfeasance, bribery, theft of government property, fraudulent claims, fraud, coercion, conversion, malicious prosecution, misuse of government property, or willful omission to perform duty, is economically wasteful, or involves gross misconduct.”
Improper Government Activity means any activity, or act by an executive management, director, department, officer (elected or appointed), or employee relating to the performance of official WRCOG business, duties, and responsibilities.
There are four categories that constitute improper government activity: (1) gross mismanagement, (2) significant waste of public funds, (3) abuse of authority, or (4) substantial and specific danger to public health and safety.
Gross Mismanagement means the failure to exercise even a substandard level of performance relating to the management of projects, programs, activities, functions, services, and responsibilities.
Significant waste of public funds means an unnecessary expenditure of a substantial amount of money or a series of unnecessary expenditures of smaller amounts of money.
Abuse of Authority means the willful exercise of authority for improper or wrongful purpose.
Substantial and specific danger to the public health and safety means a risk of serious injury, illness, peril or loss, to which the exposure of the public is a gross deviation from the standard of care or competence which a reasonable person would observe in the same situation.
Fraud, Waste, and Abuse (FWA) Hotline
The WRCOG FWA Hotline is a mechanism for reporting conduct that may be unethical, illegal, in violation of professional standards, or otherwise inconsistent with WRCOG’s policies. The FWA Hotline can be used by employees or members of the public to report activities perceived to be misconduct such as theft, bribes, kickbacks, etc., violations of Agency policy or ethics, theft, waste, or misuse of Agency assets. The objective of the FWA Hotline is to identify and stop loss of Agency resources and act as a deterrent to fraud, waste, and abuse.
Employees who are unsure as to whether particular conduct constitutes fraudulent, wasteful, or abusive conduct are advised to contact their supervisor(s) for clarification. Further, employees who see or suspect any fraud, waste, or abuse must report it immediately. Appropriately qualified parties, depending on the matter, including law enforcement if applicable, may be asked to undertake an investigation. Investigation results will not be disclosed or discussed with anyone other than on a legitimate need-to-know basis.
Reports to the Hotline will be treated as confidential. Reports may be made by telephone, e-mail, or by U.S. mail by contacting the following:
3390 University Avenue, Suite 200
Riverside, CA, 92501
- Dr. Kurt Wilson, Executive Director: email@example.com; (951) 405-6755
- Crystal Ruiz, Executive Committee Chair: firstname.lastname@example.org; (951) 405-6755
All reports must be made with truthful and accurate information and to the best of your knowledge. Employees will not be disciplined for reporting concerns in good faith that they believe fall under this Policy. Further, WRCOG will not tolerate retaliation against individuals for reporting a good faith concern under this Policy, participating in, or cooperating with any investigation of reported concerns, or otherwise engaging in conduct protected by law. Anyone who believes that they are being retaliated against should notify their immediate supervisor(s) or Human Resources immediately.
- Fraud: Fraud is defined as a dishonest and deliberate course of action that results in obtaining money, property, or an advantage to which employees or officials committing the action would not normally be entitled. Fraud also encompasses intentional misleading or deceitful conduct that deprives the Agency of its resources or rights. There are three categories of fraud. They include 1) financial statement fraud, 2) misappropriation of assets, and 3) corruption.
- Waste: Waste is defined as the needless, careless, or extravagant expenditure of Agency funds; incurring of unnecessary expenses; or mismanagement of Agency resources or property. Waste does not necessarily involve private use or personal gain, but it almost always signifies poor management decisions, practices, or controls.
- Abuse: Abuse is defined as the intentional, wrongful, or improper use or destruction of Agency resources, or improper practice that does not involve prosecutable fraud. Abuse can include the excessive or improper use of an employee or official's position in a manner other than its rightful or legal use.
- Business Ethics: Business ethics refers to contemporary organizational standards, principles, sets of values, and norms that govern the actions and behavior of an individual in the business organization. Business ethics have two dimensions, normative business ethics or descriptive business ethics.
- Human Resources Ethics: Interactions between managers and employees create opportunities for breaches of ethics, such as discrimination based on ethnicity, gender, age, or other factors. Managers who discriminate against protected groups in hiring practices, compensation decisions, and terms of employment can face legal and social consequences. Dishonesty and manipulation are also examples of unethical workplace behavior.
- Accounting Ethics: Financial accounting is a major ethical issue, and no amount of industry or government regulation seems able to prevent dishonest people from reporting financial information in unethical ways. Certain unethical accounting practices are illegal, such as misrepresenting income or expenses in financial statements through unjustifiable shifting of expenses to inappropriate periods to influence current financial results, obtain a better debt rate, or to maintain debt covenant requirements.
Examples of Fraud, Waste, and Abuse
Examples of fraud, waste, and abuse under this Policy include, but are not limited to:
- Misappropriation of funds, including without limitation, theft of cash or of funds, being economically wasteful, personal purchases using WRCOG resources, falsifying travel expense reports, misuse of expense cards, false invoicing, payroll falsification, creating unnecessary overtime, and/or forgery or alteration of any document.
- Misappropriation of property, including without limitation, theft, or removal of WRCOG equipment, inventory or supplies, use of WRCOG equipment for purposes unrelated to WRCOG business, use of one’s position at WRCOG to gain advantage when conducting personal business with a vendor, and/or destruction, removal, or inappropriate use of WRCOG furniture, fixtures, and equipment.
- Misappropriation of insurance proceeds, including without limitation, filing a false claim for workers compensation, accidents, or other claims.
- An act or omission with corrupt intent, including without limitation, overcharging for goods or services, secret commissions (e.g., kickbacks), acceptance of gifts / goods / services as inducement to giving work to any contractor or supplier, and/or collusive bidding.
- Knowingly making misleading statements, including without limitation, false accounting, deliberate misstatement of accounting information, and/or intentional statements of incorrect or misleading employment history / educational qualifications.
- Gross misconduct, including without limitation, deliberate wrongdoing that undermines the trust and confidence between an employee and WRCOG, disclosing confidential information, and/or destruction of records.
- Willful omission with the intent to mislead or intentional concealment or misrepresentation of a material fact, including without limitation, intentionally omitting or ignoring information important to the day-to-day operations of WRCOG.
- Knowingly making a false promise, including without limitation, intentionally omitting or ignoring information important to the day-to-day operations of WRCOG.
Benefits of a Fraud, Waste, and Abuse Hotline
There are numerous benefits to a Fraud, Waste, and Abuse Program. It is important for not only identifying and quantifying losses to the Agency, but also preventing future losses. Specific benefits include:
- Identification and termination of occurrences of fraud, waste, and abuse.
- Recovery of funds as a result of investigations.
- Deterrence of inappropriate behavior by increasing awareness of these actions.
- A safe mechanism for employees and the public to voice concerns and report suspected inappropriate activity.
- Improvement in the Agency’s internal control processes.
- Enforcement of an ethical work environment.
WRCOG will not retaliate, nor will it tolerate retaliation against those who, in good faith, report suspected fraud, waste, and/or abuse or who participate in an investigation of suspected violations.
An act of retaliation should be reported immediately to the WRCOG Fraud, Waste, and Abuse Hotline, who will investigate and, if appropriate, report it as a potential Agency policy violation. In addition, those who bring matters to the WRCOG Fraud, Waste, and Abuse Hotline are protected through the State of California Whistleblower Protection Statute, California Labor Code Sections 1102.5 and 1106.