SAM 20800 Notifications

1. SAM 20800 Notifications Jennifer Whitaker Department of Finance

2. SAM 20800 - Notification of Actual or Suspected Fraud or Irregularities An entity will notify the OSAE and the BSA of all cases of actual or suspected fraud, defalcation, theft, or other irregularities it has become aware of either internally or by referral.  This requirement applies to all incidents involving state assets, whether alleged against state employees or others.

3. SAM 20800 - Notification of Actual or Suspected Fraud or Irregularities Notification will be made to the OSAE and the BSA in writing not later than the first business day following the actual or suspected fraud, theft, or irregularity.  The notification will include, as a minimum, the sequence of events, the internal controls that failed, the means of discovery, the corrective actions taken, the actual or estimated dollar amount, and any punitive actions taken or being considered.   If not completed within thirty days, a progress report will be submitted every thirty days until the entity has resolution or has referred the incident to the proper authority.

4. Statistics Reporting Period: September 2008 through December 2011 Number of Notifications Received: Largest Dollar: 204 $2 Million

5. Common Types of Fraud Reported Cash Shortages Improper Activities Employee Theft Stolen Property and Equipment

6. Altered Money Orders Between March 2006 and July 2008, an employee stole numerous money orders payable to the state for violation penalties. The employee had the business owners mail the money orders directly to her at work. When the employee received the money orders, she altered them and deposited them into her personal account. Means of discovery: Outside tip – a victim of the altered money order notified local law enforcement. Estimated dollar value of theft: $125,000

7. Missing Warrants An Office Technician stole eight blank warrants and one $15,000 check made out to a claimant. It is not clear if the Office Technician gained access to the safe or took the checks when they were left unattended by another employee. Means of discovery: Accounting found the fraud while doing its monthly reconciliation. Estimated dollar value of fraud: $173,073. Seven of the blank warrants were transacted for over $158,073 plus the $15,000 check.

8. Missing Cash An employee did not appropriately deposit special event parking revenue. On several occasions, cash collected from special events parking was requested to be delivered directly to the Director of Parking Services for processing. Means of discovery: Tip – an employee who worked in the Parking Services unit. Estimated dollar value of fraud: $44,582

9. Vendor Fraud During the period, July 2004 through June 2006, a vendor was purposefully billing the state for services that had not been provided. Means of discovery: Tip – from the vendor’s bookkeeper Estimated dollar value of fraud: $2,078,867

10. Stolen Deposit A robbery occurred while two employees (A & B) were en route to the bank with a deposit. On the way, Employee A was alerted that they had a flat tire. They pulled over to the side of the road and Employee B went back to get his truck so they could take the deposit to the bank. The bank deposit bag and Employee A’s purse were on the floor board on the driver side. While waiting for Employee B to bring the truck, the driver side car door was flung open and a man reached in under Employee A’s legs and grabbed the deposit bag that was on the driver side floor board. The purse was not taken. Estimated dollar value of loss: $17,000

11. Car Rental A state employee rented a vehicle for personal purposes using a state contract carrier and billed the state department. Means of discovery: Accidental – the rental company called the department accounting office requesting the vehicle be returned for servicing. Estimated dollar value of fraud: $8,409 May 2010 to Jan 2011

12. Payroll Fraud An employee misused their position to fraudulently document hours worked. The employee had submitted fraudulent claims for payment of hours worked for which she was not entitled Means of discovery: Tip – another employee notated that the hours seemed excessive and the “sign in and out records” were consistently missing from the Std. 634. Estimated dollar value of fraud: $100,000 Hours reported Jan 2007 through Sept. 2009

13. Altered Check Original check was written for $10.47 to T. Trevino. It was subsequently forged and cashed for $1,214 to a Ms. Kim Easy at a Walmart store.

14. Questions?