Fraud Awareness

Preventing Fraud, Waste, and Abuse In Your Department

University management is responsible for establishing and implementing systems and procedures to prevent and detect fraud, waste, or abuse. You can take a proactive approach to prevent fraud by implementing the proper internal controls. For example:

• Create a culture of honesty and high ethics
• Evaluate risks and implement processes, procedures, and controls to prevent, deter and detect fraud, waste, and abuse
• Develop appropriate oversight or monitoring processes
• Segregate duties where possible so that two sets of eyes are on transactions.

Proper Segregation of Duties (SoD) occurs when no single individual has control over all phases of a transaction. The phases are:

• Authorization/Approvals
• Custody
• Record keeping
• Reconciliation

Contact us if you have concerns about SoD or would like to discuss acceptable options for transactions in your area.

Management at all levels of the University should review the information available from the American Institute of Certified Public Accountants in the document Management Anti-fraud Programs and Controls: Guidance to Help Prevent and Deter Fraud. See the Management Anti-Fraud Document.

Please contact Audit Services at (615) 898-2914 or audit@mtsu.edu if you need assistance in reviewing risks, processes, procedures, or controls or in providing internal control training.

Reporting Fraud, Waste, or Abuse

The University is committed to the responsible stewardship of resources; and state law requires all public institutions of higher education to provide a means by which employees, students, or others may report suspected or known improper or dishonest acts.

Who Can Report?

Whether you are part of management, a faculty or staff member, a student, or a concerned citizen, you are encouraged to report known or suspected fraud, waste, or abuse by employees, outside contractors, or vendors. 

What Should I Report?

Dishonest acts, either known or suspected, should be reported, such as:

• Theft or misappropriation of funds, supplies, property, or other University resources
• Forgery or alteration of documents
• Unauthorized alteration or manipulation of computer files
• Improper and wasteful activity
• Falsification of reports to management or external agencies
• Pursuit of a benefit or advantage in violation of Policy 12 Conflict of Interest
• Authorization or receipt of compensation for hours not worked

For additional policy information, please refer to MTSU Policy 71, Preventing and Reporting Fraud, Waste, and Abuse.

Before You Report Allegations

Before making allegations of dishonesty, be reasonably sure of any claims. Such allegations can negatively affect the lives and working environments of the accused.

Also keep in mind, as stated in Policy 71, employees with knowledge of matters constituting fraud, waste, or abuse who fail to report it or employees who knowingly make false accusations may be subject to disciplinary action.

Reporting Options

There are several options for reporting fraud, waste, or abuse.

• Supervisor, department head, or university official
  • If you are a supervisor, department head or university official and you receive a report of fraud, waste, or abuse, do not investigate. Please contact Audit Services immediately.
• The Office of Audit Services
  • ReportFraud@mtsu.edu  
  • Online Reporting Form
  • (615) 898-2914
• The Tennessee Comptroller’s Hotline for Fraud, Waste, and Abuse at 1-800-232-5454 or online at comptroller.tn.gov/hotline

Investigations

When the Office of Audit Services receives allegations of dishonesty or possible fraud, waste, or abuse by an employee, outside contractor, or vendor, it is required to conduct an investigation.

Management should NOT attempt to conduct investigations or alert suspected employees of an impending investigation.

In an investigation, objectives include, but are not limited to:

• Verifying the facts
• Maintaining objectivity and confidentiality
• Determining responsibility
• Recommending corrective actions to help ensure that similar actions do not occur in the future.

Protection under State Law

State law provides protection for individuals by prohibiting discrimination or retaliation of any kind against these individuals who report, in good faith, allegations of fraud, waste, or abuse or for cooperating with auditors conducting an investigation.

A person who knowingly and willingly retaliates or takes adverse action of any kind against any person for reporting alleged wrongdoing pursuant to the provisions of TCA 49-14-103(b) commits a Class A misdemeanor.

The detailed information in the allegation(s) and investigation(s) is considered “internal audit working papers” and is confidential under state law, unless subject to court action requiring disclosure. If there is a separate legal obligation to investigate the complaint (e.g., complaints of illegal harassment or discrimination), anonymity or complete confidentiality cannot be guaranteed.

Reporting Responsibility

Audit Services has reporting responsibility to the Audit and Compliance Committee of the MTSU Board of Trustees and the Tennessee Comptroller of the Treasury. This reporting relationship enables Audit Services to review matters involving any level of administration at the University independently and objectively.

For any fraud awareness concerns, please contact:

Leah Ladley, CPA, CIA, CFE, CRMA
Chief Audit Executive
Audit Services
1301 East Main Street
Murfreesboro, TN  37132

Office (615) 898-2914

reportfraud@mtsu.edu