[Staff] Fwd: Executive Order 1104 - Campus Reporting of Fiscal Improprieties

[Monte Mehrabadi]

fyi
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From: Chukuka Enwemeka <enwemeka at mail.sdsu.edu>
Date: Fri, May 13, 2016 at 1:48 PM
Subject: Fwd: Executive Order 1104 - Campus Reporting of Fiscal
Improprieties
To: Norma Bouchard <nbouchard at mail.sdsu.edu>, "Alan (Al) Sweedler" <
asweedler at sciences.sdsu.edu>, Dennis Cradit <dcradit at mail.sdsu.edu>, Gale
Etschmaier <gale.etschmaier at mail.sdsu.edu>, Gregorio Ponce <
gponce at mail.sdsu.edu>, Joanna Brooks <jmbrooks at mail.sdsu.edu>, Joe Shapiro <
jshapiro at mail.sdsu.edu>, "Joseph F. Johnson, Jr." <jjohnson at mail.sdsu.edu>,
Joyce Gattas <gattas at mail.sdsu.edu>, Kathy LaMaster <lamaster at mail.sdsu.edu>,
Ken Walsh <kwalsh at mail.sdsu.edu>, Marilyn Newhoff <mnewhoff at mail.sdsu.edu>,
Morteza Monte Mehrabadi <mehrabadi at mail.sdsu.edu>, Sandra Cook <
scook at mail.sdsu.edu>, Stanley Maloy <smaloy at mail.sdsu.edu>, Stephen
Schellenberg <saschellenberg at mail.sdsu.edu>, Stephen Welter <
swelter at mail.sdsu.edu>


FYI
---------- Forwarded message ----------
From: Elliot Hirshman <ellioth at mail.sdsu.edu>
Date: Fri, May 13, 2016 at 12:49 PM
Subject: Fwd: Executive Order 1104 - Campus Reporting of Fiscal
Improprieties
To: tom.mccarron at mail.sdsu.edu, Chukuka Enwemeka <enwemeka at mail.sdsu.edu>,
Eric Rivera <erivera at mail.sdsu.edu>, Mary Ruth Carleton <
mcarleto at mail.sdsu.edu>, Stephen Welter <swelter at mail.sdsu.edu>,
jrentto at mail.sdsu.edu, awongnickerson at mail.sdsu.edu


FYI

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Begin forwarded message:

*From:* "Huot, Sokha" <shuot at calstate.edu>
*Date:* May 13, 2016 at 12:05:12 PM PDT
*To:* csu-presidents <csu-presidents at lists.calstate.edu>, "White, Timothy" <
twhite at calstate.edu>, "Ashley, Garrett P." <gashley at calstate.edu>,
"Blanchard, Loren" <lblanchard at calstate.edu>, "Lamb, Lori" <
llamb at calstate.edu>, "Mandel, Larry" <lmandel at calstate.edu>, "Relyea,
Steven" <srelyea at calstate.edu>, "Virjee, Framroze" <fvirjee at calstate.edu>,
"Walton, Lars" <lwalton at calstate.edu>
*Cc:* csu-presassistants <csu-presassistants at lists.calstate.edu>, "Sanford,
Cindy" <csanford at calstate.edu>, "Douglas, Anne Marie" <adouglas at calstate.edu>,
"Tinoco, Alina" <ATinoco at calstate.edu>, "Jones, Andrew" <
gajones at calstate.edu>, "Wells, Bradley" <bwells at calstate.edu>, "Redmond,
Mike" <mredmond at calstate.edu>, cfo-assts <cfo-assts at calstate.edu>, "Kiss,
Michelle" <MKiss at calstate.edu>, "Mesa, Tony" <tmesa at calstate.edu>
*Subject:* *Executive Order 1104 - Campus Reporting of Fiscal Improprieties*
*Reply-To:* "Huot, Sokha" <shuot at calstate.edu>

CSU Presidents,



On behalf of the Chancellor, Executive Order 1104 – Campus Reporting of
Fiscal Improprieties – has been posted.



http://www.calstate.edu/eo/

http://www.calstate.edu/eo/EO-1104.html





May 13, 2016



*M E M O R A N D U M*



*TO:*                     CSU Presidents



*FROM:*               Timothy P. White

                            Chancellor



*SUBJECT:*        Campus Reporting of Fiscal Improprieties — Executive
Order 1104



Attached is a copy of Executive Order 1104 relating to required campus
reporting of certain cases of actual or suspected fiscal improprieties,
including issues related to the campus itself and to an auxiliary of the
campus.



In accordance with policy of the California State University, the campus
president has the responsibility for implementing executive orders where
applicable and for maintaining the campus repository and index for all
executive orders.



If you have questions regarding this executive order, please call the
Office of Audit and Advisory Services at (562) 951-4430.



TPW/cas



Attachments



c:  CSU Office of the Chancellor Leadership

     CSU Vice Presidents of Administration and Finance



*THE CALIFORNIA STATE UNIVERSITY*

*Office of the Chancellor*

*401 Golden Shore*

*Long Beach, California 90802-4210*

*(562) 951-4430 <%28562%29%20951-4430>*



*Executive Order:*      1104



*Effective Date:*           May 13, 2016



*Supersedes:*                Executive Order 813



*Title:*                           Campus Reporting of Fiscal Improprieties



The California State University (CSU) is committed to the highest ethical
standards and to creating an environment where fraudulent and other
dishonest acts are not tolerated. The CSU also wants to ensure that all
resources entrusted to it are used ethically, prudently, and for their
designated purpose. As discussed in the State Leadership Accountability
Act, internal controls are necessary to ensure that state resources are
adequately safeguarded, monitored, and administered. Active oversight and
monitoring processes for the prevention and early detection of fraud and
errors in program administration are vital to public confidence and the
appropriate and efficient use of public resources. Management of state
agencies, including the CSU, must be involved in assessing and
strengthening the systems of internal control to minimize fraud, errors,
abuse, and waste of government funds.



As part of an ongoing effort to provide public accountability, the
Chancellor (for situations related to the Chancellor’s Office) and campus
Presidents are required to notify CSU and other state officials of certain
cases of actual or suspected fiscal improprieties, including issues related
to the campus itself and to an auxiliary of the campus. These reporting
requirements apply to both state and non-state funds. See Attachment A to
determine whether notification is required and, if so, to whom.



Notification (note that the terms “notification” and “report” are used
interchangeably) is made in a hard copy letter not later than five business
days following the determination that an issue is reportable.  If the
discovery is the result of a whistleblower complaint, the campus still
makes a notification under this executive order. The notification includes
the information outlined in Attachment B. Progress reports are submitted
every thirty calendar days until the review or investigation is complete.



Attachment C provides a summary of the reporting timelines.



For questions concerning the reporting of fiscal improprieties, please
contact the Office of Audit and Advisory Services at (562) 951-4430.





__________________________________


                       Timothy P. White, Chancellor

Dated:  May 13, 2016



*ATTACHMENT A*

*HOW TO DETERMINE WHETHER YOU NEED TO REPORT AN ACTUAL OR SUSPECTED FISCAL
IMPROPRIETY*



The campus should conduct an inquiry to determine whether notification is
required. An inquiry is the initial process of examining complaints,
allegations, and other possible evidence of fiscal improprieties. The
objective of an inquiry is to determine whether sufficient evidence exists
to warrant further investigation.[1]
<#m_7537539974940079000_m_-6221343942686582725__ftn1> Campus administrators
should endeavor to complete the inquiry process within thirty calendar days
of when an issue is first brought to their attention.



Actual or suspected improprieties include situations where it is determined
that it is more likely than not that a fiscal impropriety has occurred. In
addition to conducting inquiries into issues related to the campus itself,
campus administrators should also evaluate issues related to an auxiliary
of the campus.



To determine whether you need to report an actual or suspected fiscal
impropriety related to the campus and/or an auxiliary of the campus, follow
the steps below.



1.      Based on the initial inquiry, answer the following question: Is it
more likely than not that a fiscal impropriety has occurred? Examples of
fiscal improprieties such as fraud, embezzlement, and theft, include but
are not limited to:



a.       Forgery or unauthorized alteration of any document or account
belonging to the CSU.

b.      Forgery or unauthorized alteration of a check, bank draft, or any
other financial document.

c.       Misappropriation of funds, supplies, or other CSU assets,
including employee time.

d.      Impropriety in the handling of money or reporting of CSU financial
transactions.

e.       Profiting as a result of insider knowledge of CSU information or
activities.

f.        Unauthorized disclosure of investment activities engaged in or
contemplated by the CSU.

g.      Accepting or seeking anything of material value from contractors,
vendors, or other persons providing services or materials to the CSU,
except as permitted by law and CSU policy.

h.      Any other dishonest act regarding the finances of the CSU.



2.      If the answer to question #1 is no, you do not need to report the
alleged fiscal impropriety. However, it is recommended that the campus
documents its inquiry process and determination to demonstrate it reviewed
the situation in case a similar complaint or allegation arises in the
future.



3.      If the answer to question #1 is yes, to the extent possible,
determine the estimated dollar value of the actual or suspected
impropriety. You should include both state and non-state (e.g., auxiliary
organization and student organization) funds in your estimate. If you do
not report an issue because you believe it may be under the reporting
threshold and later discover it is above the threshold, you should make a
notification at the time of that discovery. If you simply cannot determine
an estimated dollar value, use your best judgment as to whether to report
and to whom.



a.       If the estimated dollar value is less than $5,000, you do not need
to report the actual or suspected fiscal impropriety, but you should
investigate to the extent necessary and keep a record of your findings and
actions.

b.      If the estimated dollar value is between $5,000 and $50,000, report
the actual or suspected fiscal impropriety to Chancellor’s Office
administrators (the Chancellor, Executive Vice Chancellor/CFO, Vice
Chancellor and Chief Audit Officer), and the Chair of the Board of
Trustees’ Committee on Audit.

c.       If the estimated dollar value is greater than $50,000 and state
funds[2] <#m_7537539974940079000_m_-6221343942686582725__ftn2> or a state
employee are involved, report to the California State Auditor and the
Department of Finance as well as the individuals mentioned in 3.b.



Notifications under 3.b. or 3.c. above should be made not later than five
business days following the determination that an issue is reportable and
should be made via hard copy letter signed by the campus President or the
Vice President for Administration/Chief Financial Officer (with a copy to
the campus President). The names and addresses of the individuals to be
notified are listed on the website for the Office of Audit and Advisory
Services:
https://csyou.calstate.edu/Tools/Audit/Pages/Reporting-Improper-Activities.aspx



If notification is necessary, progress reports should be provided every
thirty calendar days until the review or investigation is complete. See
Attachment B for information about what the notifications should include
and when a review or investigation is considered complete.


*ATTACHMENT B*

*WHAT THE NOTIFICATIONS SHOULD INCLUDE*



If, after reviewing Attachment A, you have determined through the inquiry
process that a notification is necessary, the initial notification should
be made within five business days following that determination. Campus
administrators should endeavor to complete the inquiry process within
thirty days of when the issue is first brought to their attention. At this
stage, available information may be limited. To the extent the following
information is available, it should be included in the initial notification
or progress reports, and all information should be included by the time of
the final report on the issue/s.



1.      The sequence of events.

2.      The means of discovery.

3.      The internal controls that failed.

4.      The corrective actions taken.

5.      The actual or estimated dollar amount.

6.      Any punitive actions taken or being considered.

7.      When the corrective and/or punitive action(s) will be completed.

8.      The job title(s) of those responsible for implementation of the
action(s).

9.      How the campus is planning to monitor in the future so the
situation does not recur.



Please note that you do *not* need to include the names of the individuals
involved in the investigation.



The notifications (including progress reports) should be made in hard copy
letter and signed by the campus President or the Vice President for
Administration/Chief Financial Officer (with a copy to the campus
President). The names and addresses of the individuals to be notified are
listed on the website for the Office of Audit and Advisory Services:
https://csyou.calstate.edu/Tools/Audit/Pages/Reporting-Improper-Activities.aspx



A review or investigation is considered complete when the campus has
completed the decisions or actions that are within its authority. For
example, if a campus conducts a criminal investigation and turns its
findings over to the district attorney, completion occurs on the date the
referral is made to the district attorney. Or if at the conclusion of a
review or investigation the campus determines its punitive or corrective
action, that information should be reported to the appropriate parties (as
outlined above) and the case is considered complete. However, upon
resolution of the criminal case or if the disciplinary or corrective action
is subsequently changed, a follow-up report should be submitted. Progress
reports and follow up reports should be submitted to all the same parties
required for the initial notification.


*ATTACHMENT C*

*SUMMARY OF REPORTING TIMELINES*



Endeavor to determine within 30 calendar days of a possible fiscal
impropriety being brought to management’s attention whether the issue is
reportable.



*PRELIMINARY REPORT*



If the issue is reportable, within five business days of making that
determination, make a preliminary report to the applicable parties (as
outlined in Attachment A, #3). All preliminary and subsequent notifications
should be made in hard copy letter and signed by the campus President or
the Vice President for Administration/Chief Financial Officer (with a copy
to the campus President).



*PROGRESS REPORT*



Make progress reports to the applicable parties every 30 calendar days
until the review or investigation is complete.



*FINAL REPORT*



When the review or investigation is complete (i.e., when the campus has
completed the decisions or actions that are within its authority), within
five business days make a final report to the applicable parties that
includes the information outlined in Attachment B.



*FOLLOW UP*



If, for example, a campus submitted a final report once it turned a
criminal case over to a district attorney, upon resolution of the criminal
case or in other cases if the disciplinary or correction action is
subsequently changed, a follow-up report should be submitted to all the
same parties required in earlier notifications.





* * * * * * * * * * * * * * * * * * * * * * * *



Sokha Huot

Executive Office Manager

The California State University
401 Golden Shore
Long Beach, California 90802
(562) 951-4725

www.calstate.edu

* * * * * * * * * * * * * * * * * * * * * * * *

------------------------------

[1] <#m_7537539974940079000_m_-6221343942686582725__ftnref1> For purposes
of this executive order, an investigation is the process of collecting and
examining evidence to determine whether a fiscal impropriety has occurred.
If an investigation is warranted, it may be conducted by the campus or the
campus may request the assistance of the Office of Audit and Advisory
Services (OAAS). See the “How to Request an Investigation” tab on the OAAS
website for more information.



[2] <#m_7537539974940079000_m_-6221343942686582725__ftnref2> Note that
“state funds” has a fairly broad definition. A complete listing of state
funds can be found in the Department of Finance’s Uniform Codes Manual.  In
addition to the General Fund, state funds include Special Revenue Funds
(such as parking revenues), Capital Projects Funds, Debt Service Funds,
Enterprise Funds, and Internal Service Funds, among others. Further, funds
accounted for under the CSU’s Revenue Management Program are still
considered state funds. As a rule of thumb, if the funds would be included
in the campus’s financial statements, they are state funds. Remember that
auxiliaries may also handle state funds and utilize state employees who may
be involved in an irregularity; therefore, such cases still need to be
reported to the California State Auditor and the Department of Finance if
they are above the $50,000 threshold.









-- 


--
Morteza Monte Mehrabadi
Dean
College of Engineering
San Diego State University
San Diego, CA  92182-1326
Email: mehrabadi at mail.sdsu.edu
Office:(619)594-6061
Fax:(619)594-6005
*http://www.engineering.sdsu.edu/engineering/
<http://www.engineering.sdsu.edu/engineering/>*
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