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{Your Name} {Agency Name} {Date}

{Your Name} {Agency Name} {Date}. Agenda. Introduction Build awareness of fraud Consequences of fraud How to prevent and report fraud. What we do. Internal controls Risk assessment Conflict of interest Process assessment and improvements Office of Legislative Auditor audit assistance

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{Your Name} {Agency Name} {Date}

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  1. {Your Name} {Agency Name} {Date}

  2. Agenda mn.gov/nofraud Introduction Build awareness of fraud Consequences of fraud How to prevent and report fraud

  3. What we do mn.gov/nofraud Internal controls Risk assessment Conflict of interest Process assessment and improvements Office of Legislative Auditor audit assistance Federal audit assistance Financial audits Program audits Grant monitoring Investigations

  4. Fraud Awareness and Prevention Week November 11-17 is a week dedicated to: • Raise state employee awareness about fraud. • Educate and train employees about fraud prevention, detection, and reporting techniques. • Fight fraud to safeguard state assets and resources. mn.gov/nofraud

  5. Fraud can happen anywhere Nonprofit leader pleads guilty to fraud. Employee creates $1.9 million in false tax refunds used for personal benefit. Seized cash of $18,126 and 13 forfeited vehicles unaccounted for as seized and forfeited property. Grant funds used by nonprofit for personal expenses. State positions and financial resources used for fundraising activities not consistent with state law and department policy. mn.gov/nofraud

  6. Why should I care? • It’s your tax dollars! • Impacts ability to provide programs and services. • Impacts state agency operations. • Tarnishes reputation of the fraudster, the agency, government in general. • Creates new work to implement preventative or corrective internal controls. mn.gov/nofraud

  7. What is fraud? • An intentional or deliberate act. • Something someone does knowing it’s not truthful. • Can involve more than one person. • Mistakes are not fraud. mn.gov/nofraud

  8. Examples of internal fraud in government mn.gov/nofraud • Personal use of agency’s Procurement Card (P-Card). • Reporting of false travel expenses. • Not properly recording vacation or sick time used. • Theft of cash or other state property. • Kickbacks from vendors or grantees.

  9. Examples of external fraud in government mn.gov/nofraud • False claims by a vendor, grantee, provider, or service party. • Misusing grant funds. • Filing false financial or legal records with the state. • Falsifying information to receive government benefits. • Under-reporting income or over reporting expenses on a tax return.

  10. The fraud triangle Rationalization Opportunity Pressure mn.gov/nofraud

  11. How can you prevent fraud? mn.gov/nofraud Maintain a strong system of internal controls Promote an agency culture where honesty, integrity, transparency, and ethical business practices are mission critical

  12. Five Fraud Prevention Must-Do’s mn.gov/nofraud • Be proactive versus reactive  • Follow established hiring procedures  • Train employees in fraud prevention • Implement a fraud reporting mechanism • Increase the perception of detection

  13. Who’s responsible for the prevention and detection of fraud? mn.gov/nofraud Management Internal Controls/Audit Employees Grantees/Vendors

  14. How we detect fraud 39% Internal and External Tips 13% Management Review 20% Internal and External Audits 6% Random Discovery 6% Account Reconciliation 4% Document Examination 2% Surveillance/Monitoring 2% Law Enforcement 1% IT Controls 1% Fraudster’s Confession 6% Other mn.gov/nofraud

  15. Laws about reporting fraud • Reporting to State Auditor and Legislative Auditor required: Minnesota Statutes Section 609.456 • Whistleblower protection: Minnesota Statutes Section 181.932 mn.gov/nofraud

  16. How we report fraud? CUSTOMIZE THIS PAGE TO LIST YOUR REPORTING CHANNELS (sample below) Agency Human Resource Director 651-xxx-xxxx Sample.Name@state.mn.us Office of the Legislative Auditor 651-296-4708 auditor@state.mn.us mn.gov/nofraud

  17. Fraud Awareness and Prevention week activities CUSTOMIZE THIS PAGE TO LIST YOUR REPORTING CHANNELS (sample below) Agency Human Resource Director 651-xxx-xxxx Sample.Name@state.mn.us Office of the Legislative Auditor 651-296-4708 auditor@state.mn.us mn.gov/nofraud

  18. Fraud Awareness and Prevention week activities List activities happening at your agency • Training session(s) • Daily intranet/newsletter posts Visit mn.gov/nofraud for: • Fraud videos • Video discussion/training toolkits • Daily updates • Resources for reporting fraud • Much more! mn.gov/nofraud

  19. Fraud Awareness and Prevention week activities List activities happening at your agency • Training session(s) • Daily intranet/newsletter posts Visit mn.gov/nofraud for: • Fraud videos • Video discussion/training toolkits • Daily updates • Resources for reporting fraud • Much more! mn.gov/nofraud

  20. Q and A Questions? Thoughts? Reactions? mn.gov/nofraud

  21. Additional resources • MMB Internal Controls and Accountability Fraud Awareness and Prevention Resources - http://www.mn.gov/nofraud • Association of Certified Fraud Examiners (ACFE): http://www.acfe.com/ • 2016 ACFE Report to the Nations: http://www.acfe.com/rttn2016.aspx • Minnesota Office of Legislative Auditor (OLA) Allegation Reporting form http://www.auditor.leg.state.mn.us/reporting.htm • United States Office of Government Ethics: https://oge.gov/ • Anti-Fraud Collaboration: http://www.antifraudcollaboration.org/ mn.gov/nofraud

  22. mn.gov/nofraud

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