Reporting & Investigating Improper Governmental Activities

Slide 1

Reporting & Investigating Improper Governmental ActivitiesJohn Lohse Director of InvestigationsJudith Rosenberg-Principal InvestigatorOffice of the SVP/Chief Compliance & Audit Officer of the Regents

http://ucwhistleblower.ucop.edu

The University of CaliforniaThe University of CaliforniaUCs Whistleblower Policy & Whistleblower Protection Policy are statutory policies defining our responsibilities when improper governmental activities occur at a UC campus, lab, medical center or other UC-operated institution. Our Whistleblower Program is a part of the Office of SVP Sheryl Vacca, the Chief Compliance & Audit Officer of the Regents. Our position within the UC System reveals how seriously UC takes reports of wrongdoing.1

Importance of Your RoleWho Investigates What?UC Whistleblower PoliciesDos & DontsExercising Judgment

AgendaDecember 20112UC Whistleblower ProgramThe University of CaliforniaOur presentation will give you an overview of UCs Whistleblower Policies & procedures. Well provide you with resources & allow you to practice some of the techniques we cover today.2Association of Certified Fraud Examiners CONCLUSION ON DETECTING FRAUDOccupational frauds are more likely to be detected by tips than by any other means Association of Certified Fraud Examiners, 2010 Report to the Nation on Occupational Fraud and Abuse

December 2011UC Whistleblower Program3

The University of CaliforniaUCs Whistleblower Policy is important because its the method that uncovers most of the fraud & other illegal or unethical activity that takes place within the UC System. Your role is important both as an employee & as a supervisor or manager.3Policy on Reporting & Investigating Allegations of Suspected Improper Governmental ActivitiesSee overview of policies from BOI Pre Work


The University of CaliforniaUC has 2 policies that accord with the state laws regulating institutions receiving funding from the State of California. Our Whistleblower Policy establishes what & how to report. Our Whistleblower Protection Policy ensures that anyone blowing the whistle on an improper activity cannot be retaliated against.4November 2010UC Whistleblower Program5Fiscal Year 2010 - 2011Investigations Summary619 New Cases/689 Allegations*277/45%UC Hotline, Anonymous Reporter91/15%UC Hotline, Identified Reporter61/10%Non-Hotline, Anonymous Reporter190/30%Non-Hotline, Identified Reporter428 Closed Cases**62/15%Substantiated138/32%Not Substantiated228/53%Other Outcomes**** A Case can include up to or more than 3 Allegations ** Closed Cases include related allegations*** Other Outcomes includes Not Specified, Inconclusive, Referred to Management, FrivolousEscalated to Campus Police, Escalated to Compliance, Escalated to HR/ELR, Investigated/InconclusiveInitiator Unwilling to Participate, Policy & Procedural Change Needed, Unable to VerifyThe University of CaliforniaIn this chart, all of the green slices represent an internal UC source. More than a third of our investigations result from employees reporting a situation they encountered in the course of their daily work. Another 11% originate with UC Managers & Supervisors who might also be reporting an improper activity discovered as a part of their job, or one that was referred to them by a subordinate. 1% come from UC Senior Managers or Regents, 2% from Internal Audit & 3% from UC students.5Who Performs Investigations?December 2011UC Whistleblower Program6Academic PersonnelAnimal Research Office Disability CoordinatorEnvironmental Health & SafetyHealth Sciences Compliance OfficerHuman Resources Labor Relations Employee RelationsEEO/AARisk ManagementStudent Judicial AffairsECAS Investigations (UCOP)

Institutional Review BoardInternal AuditManagement overseeing ad hoc external processesMedical StaffNCAA Compliance OfficerOffice of the General CounselPrivilege & Tenure CommitteeResearch AdministrationRetaliation Complaint OfficerTitle IX OfficerUniversity PoliceLDO InvestigatorsThe University of CaliforniaA variety of different offices at UC perform investigations 22 in all - reflecting the many types of whistleblower complaints we receive.

Some reports allege multiple categories of wrongdoing. In those cases, several offices may be involved in the investigation, with one office taking the lead. Investigations may also be conducted by outside fact finders. We sometimes choose to use external investigators in order to ensure independence.6Policy ObjectiveDecember 2011UC Whistleblower Program7To adhere to the spirit of the state whistleblower statutes by creating

an environment in which suspected improprieties are brought forward without fear of retaliation and mechanisms that ensure an appropriate institutional response to all suspected improprieties (not just whistleblower reports). The University of CaliforniaAt UC, we follow the spirit, not just the letter, of the law. Our objectives in our Whistleblower Policy & Whistleblower Protection Policy is to create a culture of ethical compliance. We want our faculty, staff, administration & students to bring forward suspicions of improprieties without fear of retaliation. We want our procedures to ensure appropriate institutional responses.7

DefinitionsDecember 2011UC Whistleblower Program8Improper Governmental Act (IGA)

Any activity by a state agency or by an employeethat is undertaken in the performance of the employees official duties, whether or not that action is within the scope of his or her employment, and that (1) is in violation of any state or federal law or regulation including, but not limited 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 or is economically wasteful, or involves gross misconduct, incompetence, or inefficiency.

The University of CaliforniaThe state statutes refer to Improper Governmental Acts. What is an Improper Governmental Act? (read definition). The statutes language is general & while it gives examples, most improper acts can fall under this category. For example, although sexual harassment isnt listed, its also against the law, just as any form of discrimination in employment practices is against the law.8

DefinitionsDecember 2011UC Whistleblower Program9 Protected Disclosure*: any good faith communication that discloses or demonstrates an intention to disclose information that may evidencean improper act or any condition that may significantly threaten the health or safety of employees or the public if the disclosure or intention to disclose was made for the purpose of remedying that condition.

*Not restricted to whistleblowers.The University of CaliforniaThe statute refers to any good faith report of an IGA as a Protected Disclosure. This distinction becomes an important aspect of our Whistleblower Protection Policy. Protected disclosures are not restricted to those who called our anonymous hotline. In effect, you have become a whistleblower if you disclose information in good faith that may evidence an IGA or any other condition that could significantly threaten the health or safety of employees or the public. 9

Key ConceptsCan be in a variety of formsCan be to management OR any University official If not recognized as a IGA when made, danger of re-characterization as retaliation complaintMalicious intent does not nullify the potential validity of allegationsFrivolous complaints may themselves be IGAs


The University of CaliforniaWhistleblower reports can take a variety of forms: oral or written, made through the anonymous hotline, to line management or senior officials.

Whoever receives the report is bound to treat it seriously, according to our policy & procedures.

For the purpose of remedying that condition is normally assumed10universityofcalifornia/edu.hotline report in English or Spanish 800.403.4744 report in any languageDecember 2011UC Whistleblower Program11

The University of CaliforniaEthicsPoint is the Universitys hotline provider. Reporters can use either the phone or our web portal. Hotline cases are automatically entered into the investigations case management product & notifications are made to the appropriate staff at each location, based on the type of allegation reported.11Investigations Policy OverviewDecember 2011UC Whistleblower Program12Reporting to Locally Designated Official (LDO)

Triage Process by LDO and Investigations Work Group

(Two pronged testIf True & Sufficient Basis)

Investigation within natural jurisdictionOR Referral to Management*

Communications, Coordination & Monitoring by LDO

Reporting to Management, IGA source & others as appropriate

* If the two criteria are not met If True test and Probable Cause StandardThe University of CaliforniaAllegations should be reported to the LDO, who will triage them with the assistance of the local Investigations Work Group (I-Group).12December 2011UC Whistleblower Program13Locally Designated OfficialsBerkeley Linda WilliamsDavis Wendi DelmendoIrvine Mike AriasMerced Janet YoungLos Angeles Bill CormierRiverside William KidderSan Diego Gary MatthewsSan Francisco Elizabeth BoydSanta Barbara Ronald CortezSanta Cruz Alison GallowayOffice of the President Dan DooleyAgriculture & Natural Resources Jake McGuireBerkeley National Lab Jim Krupnick

Local Investigative BodiesAcademic PersonnelAnimal Research OfficeDisability CoordinatorEnvironmental Health & SafetyHealth Sciences Compliance OfficersHuman ResourcesLabor RelationsEmployee RelationsEEO/AA OfficerRisk ManagementStudent Judicial AffairsInstitutional Review BoardInternal AuditManagement/Ad Hoc ExternalMedical StaffNCAA Compliance OfficerOffice of the General CounselPrivilege & Tenure CommitteeResearch AdministrationRetaliation Complaint OfficerTitle IX OfficerUniversity PoliceInvestigationsWorkGroupThe University of CaliforniaReporting CriteriaResults from significant control or policy deficiencyLikely to receive media or other public attentionInvolves misuse of University resources or creates exposure or liability in potentially significant amountsSignificant possibility of resulting from a criminal actInvolves significant threat to health or safety of employees and/or the publicJudged significant or sensitive for other reasons


The University of CaliforniaHow to decide whether or not to report an allegation upwards?

If the incident is a result of a significant deficiency in either policy or controls thats likely to exist elsewhere on the campus or system-wide

If theres likely to be media or public attention, including attention by funding or governmental agencies

If the potential monetary exposure is greater than $25,000 it must be reported to the EVP at UCOP (No threshold for internal reporting; >=$25,000 for reporting to OP/System-wide LDO)

If it likely involves a criminal act OGC & campus police would need to be involved

If it likely involves a significant health or safety threat

If its significant or sensitive for any other reason14GuidanceAllegations not just findings are reportable.

Sensitivity and Media Attention override dollar impact.

Regents Audit Committees expectation: No Surprises.

Materiality Counts: balance bias towards disclosure against referrals to LDO for a missing quart of strawberry ice cream.

Remember that matters reported externally trigger internal reporting.


The University of CaliforniaDont wait to come to a finding. If the potential for monetary loss or sensitivity is high, report the allegation immediately. Many times its not about money & the exact dollar amount is rarely known at the beginning.

Our policy consciously dropped the concept of 30 days for preliminary review found in previous policy. Sensitivity and Media Impact - (which is frequently not measurable at the outset); often the matter really isnt about money

Reporting - (e.g. reporting to funding or regulatory agency triggers EVP reporting.) 15When Confronted with Whistleblower Allegations

DosLearn UC Policy reporting channels Locally Designated OfficialInternal Audit DirectorHuman Resources DirectorBe alert to informal communications of allegations (protected disclosures)Contact Internal Audit and Human Resources before taking any personnel actionAct with speed and Hold the matter confidentialDecember 2011UC Whistleblower Program16The University of CaliforniaWere going to cover some dos & donts, in the event youre confronted with a whistleblowers allegation.

First, be sure you know UC Policy & the reporting channels. Be familiar with your LDO, Internal Audit services department & a Human Resources contact, especially in the event of discrimination/sexual harassment & workplace misconduct charges.

Be aware that employees may communicate issues to you informally, as side conversations, for example. Thats still a protected disclosure.

Before you take any personnel action, contact Internal Audit & Human Resources. How you behave can dramatically impact the universitys ability to investigate or to obtain restitution.

Dont waste time. The longer you wait, the harder it will be to investigate properly.

Hold the matter in strict confidence. You dont want to jeopardize the investigation in any way.16When Confronted with Whistleblower AllegationsDontsDismiss the matter out of handLaunch your own investigationConfront the accused or otherwise tip them offDisclose the matter to any unnecessary partiesTry to settle or resolve the matter yourself


The University of CaliforniaNow for the Donts.

Dont dismiss or ignore an allegation.

On the other hand, dont start up an investigation leave it to the experts.

If you confront or otherwise tip off the accused, or even disclose the matter to anyone other than those with a need to know, youll almost certainly ensure that the university loses money, if its about theft, or reputation. You may trigger a drawn-out legal battle.

Never try to settle or resolve the matter yourself. Its unlikely that you know all of the legal ramifications.17Whistleblower Program WebsiteDecember 2011UC Whistleblower Program18

The University of CaliforniaThis is our system-wide whistleblower website: ucwhistleblower.ucop.edu. Here youll find the anonymous hotline number, a link to the poster, polices, FAQs, training materials & local campus resources, including the names & mailto links for all of the LDOs.

18Case StudyA large University department has a small unit that operates fairly autonomously & with very limited oversight.

This unit is involved in procuring services from outside vendors and re-charging various University organizations.


The University of CaliforniaWere going to test your understanding of the Whistleblower Program with a Case Study of a incident similar to one you might uncover as a manager. Tell the story.19Background

A temporary employee was assigned to assist with a backlog problem. This employee reported to her supervisor that a substantial amount of expenses had not been re-charged.

Senior department management became suspicious at this report and noticed that none of the bills for a particular vendor had been re-charged in over a year.

December 2011UC Whistleblower Program20The University of CaliforniaTell the story.20

Decision Point1) Has a protected disclosure been made?

2) Does this matter meet the criteria for reporting to the LDO or another appropriate office?

December 2011UC Whistleblower Program21The University of CaliforniaHas a protected disclosure been made? Yes it meets the definition of a good faith communication of information that may evidence an improper act & was made for the purpose of remedying the situation. At this point we cant tell if there was an improper act or not. There could be legitimate reasons for this particular vendors bills not to have been recharged for the year.

Does the matter meet the criteria for reporting to the LDO? This is a judgment call & may depend on the customs on your campus. At this point you dont have a lot of information, so you may want to do a little research before reporting it. You could also go directly to Internal Audit for help with the research. Since the dollar amount of the potential loss is so great, the cautious approach would be to contact IA immediately.21

InquiryThe senior department manager called the phone number listed on the invoices and got an answering machine. The call was not returned.

December 2011UC Whistleblower Program22The University of CaliforniaTell the story.22

Drive ByThe manager drove by the address on the invoice and found that it was a UPS mail box store.

December 2011UC Whistleblower Program23The University of CaliforniaTell the story.23ResearchThe manager called the Better Business Bureau and conducted a Dun & Bradstreet search without finding any information on the business.


The University of CaliforniaTell the story.24Amount at Risk

The managers research found that the University had paid this vendor in excess of $250,000 over several years.

December 2011UC Whistleblower Program25The University of CaliforniaTell the story.25Considerations

1) Did the manager go too far?

2) Is this matter now reportable to the LDO or another appropriate office?

3) What should the managers next steps be?

December 2011UC Whistleblower Program26The University of CaliforniaDid the manager go too far? Yes ask yourself a few questions, first. Is this part of my normal duties? (Which of these actions was appropriate exercise of normal duties?) Will what Im doing draw attention to the issue? (Which of these actions could have drawn attention to the issue?) Have I begun an investigation? (Which actions were investigatory in nature?)

Is the matter reportable? Yes, definitely

What should the managers next steps be? Report to the LDO, as the dollar amount is quite high & needs to be reported to the EVP at UCOP.26Action PlanWith this information, the senior manager and another department supervisor confronted the employee on a Friday afternoon about the vendor and the failure to re-charge for their services. The employee was perceived as being evasive but did not admit to any wrongdoing. She was told to be available on Monday to go over in detail the operation of her unit.


The University of CaliforniaTell the story.27Reflection

1) Should the manager and the supervisor have confronted the employee with questions about the vendor and the failure to re-charge for the billed expenses?

2) Is this matter now reportable to the LDO or another appropriate office? December 2011UC Whistleblower Program28The University of CaliforniaShould the manager have confronted? No, especially not just before the weekend.

Is the matter reportable? Yes & time is of the essence.

28Outcomes

On Monday, the department found that all of the records in the unit had been removed over the weekend and information had been deleted from the employees computer.

The employee had left a message saying that she could be contacted through her attorney.

Then they called Internal Audit.

December 2011UC Whistleblower Program29The University of CaliforniaTell the story & then tell the real story.

29ResourcesThe Education & Training Page of the Ethics, Compliance & Audit Services site includes case studies, slideshows & videos, under the Whistleblower Training section.

http://www.universityofcalifornia.edu/compaudit/educationtrng.htmlDecember 2011UC Whistleblower Program30

The University of CaliforniaUse the resources in your staff meetings to raise awareness about the whistleblower program & our affirmative duty to report suspected misconduct.30Whistleblower Coordinator/InvestigatorsDecember 2011UC Whistleblower Program31UCB:Allan [email protected](510) 642-8471UCD:Bruce [email protected](530) 754-6792UCI:Kathie [email protected](949) 824-9166UCLA:Chris [email protected](310) 267-5969UCR:Elaine [email protected](951) 827-5034UCSD:Christa [email protected](858) 534-1191

UCSF:Randy Otsuki [email protected] (415) 514-0439UCSB:John [email protected](805) 893-4335UCSC:Rita Walker [email protected] (831) 459-2462LBNL:Meredith Montgomery [email protected] (510) 486-4453ANR:Claudine [email protected] (530) 752-7496UCOP:Irene Levintov(510) 987-9296Judith Rosenberg(510) 987-0650

The University of California31

Reporting & Investigating Improper Governmental Activities

Documents

Transcript of Reporting & Investigating Improper Governmental Activities