CASE #1 · PDF fileCASE #1 You are the auditor for Big State University. You have a handy dandy reporting system and just got the following report via the hotline

CASE #1

You are the auditor for Big State University. You have a handy dandy reporting system and just got

the following report via the hotline. Your job is to evaluate this situation and if appropriate develop a

plan to investigate.

__________________________________________________________________________

Please identify the person(s) engaged in this behavior:

Darrell Smith ‐ Professor

What is the general nature of this matter?

Personally accepting hotel planner points on a conference that is hosted by Big State University (BSU)

based on all attendees that pay and stay at the conference hotel.

Where did this incident or violation occur?

Through a contract agreement which Big State University signed that was subsequently changed by the

event planner who added Dr. Smith’s name as sole points recipient.

Event planner (EP) ‐is contracted separately by Dr. Smith has the option to award anyone of their

choosing Starwood points associated with all that are accumulated at the hotel for the conference.

Conference.

Procurement for BSU signed and removed Smith's name from this award credit, since it seemed an

ethics violation. When Event planner (EP) faxed contract to hotel and also back to Big State University

for our copy, Smith's name was re‐entered.

In response to BSU's questioning of this apparent 'kick‐back' or gift, EP made reference to the fact that

Smith would not be happy if he didn't "get these points," as he had gotten several thousand points from

last year's conference. It is known that these points are used for free stays at Sheraton Hotels and

Resorts worldwide. For example, 7,000 to 10,000 points will pay for a free night's stay worth $150 to

$300. It is not known if I am the only one aware of this. It does not seem ethical to be accepting such

valuable gratuity from vendors, especially at the expense of other attendees. There is a chance the

points could be used only for rooms when travelling on BSU business, but since there is no way of

ensuring that, it seems quite inappropriate. I can understand and accept if points were given only for the

dollars spent for the individual in question's room, but not the entire attendee list.

____________________________________________________________________________

1. Primary issue?

2. Is an investigation needed? If so, who should investigate this issue?

3. If, IA, how do you approach?

4. What are the landmines you might encounter?

CASE #2

You are the auditor for Big State University which has distributed outreach and research units all

across the state. As the auditor, you are based on the main campus and are still charged with

reviewing issues at any unit in the organization. You get the following anonymous report.

_____________________________________________________________________

Issue Type ‐ Leave Misappropriations


Gary Gregarious

Is management aware of this problem?

Yes


Gary lives in another state at least part time, no one in the office really knows. He is not at work without

letting people know where he is or that he is on leave. He stands people up for meetings that he agrees

to attend and when questioned he blames others for miscommunication but they have emails showing

where he agreed to the scheduled meetings. Where is he when he isn't on the job? He is getting paid

well to work but isn't at work and is not accountable to the team of workers who serve Distant County.


I suppose the correct response is Distant County but no one knows where he is.

Please provide the specific or approximate time this incident occurred:

Since he was hired.

How long do you think this problem has been going on?

More than a year

____________________________________________________________________________

1. Primary issue?




You are the auditor for Big State University. You have a handy dandy reporting system and just got

the following report via the hotline. Your job is to evaluate this situation and if appropriate develop a

plan to investigate.

Case #3

Department of History

Issue: Employee Misconduct

Relationship to Institution: Faculty


Karen Carpenter – Instructor

James Jones ‐ Department Head, Professor

Do you suspect or know that a supervisor or management is involved? Yes James Jones, Department

Head

What is the general nature of this matter? Conflict of Interests and Dual Relationship:

In a time when faculty cuts are eminent, the Department Head and his wife have engaged in a financial

relationship with the instructor named above which makes her position in the department secure.

There have been ongoing complaints about the Instructor's unprofessional behaviors and she hasn't

been reprimanded. Rather, she has been appointed to an internal department committee to the dismay

of several Instructors.


The instructor was being evicted from her house so the Head and his wife purchased County Road 158

and rented (perhaps mortgaged) it back to her. The Head says it that his wife has purchased the

property; however, even if the he has signed a Quit Claim, it seems he has an interest in the financial

security of their tenant.

Please provide the specific or approximate time this incident occurred: I've just learned that the dual

relationship has been going on for years but the financial conflict has arisen within the last three

months.

How long do you think this problem has been going on? More than a year

How did you become aware of this violation? Told to me by a co‐worker Instructor openly claims she will

"never be fired" because of this relationship.

Please identify any persons who have attempted to conceal this problem and the steps they took to

conceal it: This issue is ignored, The Department Head said it's not a problem.

Details: There are emails containing information where the instructor confides that she has the

Department Head in her "back pocket." There are emails where several instructors have complained

about her position on a departmental committee. There was a call for a recount of votes; the

Department Head refused. There are complaints of unprofessional behavior (at least one that may be as

severe as "harassment") against the Instructor. Though I've not seen them, I understand that there have

been written complaints of inappropriate classroom behavior from parents of former students.

While there is no hard evidence, there is enough attention on this relationship that more than one

person has expressed suspicion that there is a sexual relationship between the parties named. Either

way, the relationship seems highly inappropriate and should be investigated.

1. Primary issue?




Case #4

The Provost has contacted Internal Auditing about concerns over an academic department and things

she has “heard” through the grave vine. She really doesn’t want to make any specific allegations as

that is seems inappropriate she says but “I’m certain an investigation is in order.” You are assigned to

dig into this with little to go on.

____________________________________________________________________________

You have just been hired as a new auditor for Robinson University (RU) a public university, a major

national research institution. Your first assignment is to perform a review of the Department of Really

Important Sciences (RIS). RIS has had a lot of turnover the past few years and reduced both the number

of professors as well as support staff. There has been grapevine talk that the university may even shut

down RIS or consolidate it with another department. No one knows for sure but the financial picture

appears grim with the loss of several major federal contracts in recent years and a decline in state

funding. Finances have been very tight the past two years especially, and employees have not received

raises (and say they are well below market already).

From a quick review of the department’s web site you know that this area does some research with

funding from the National Sciences Foundation (NSF). It also looks like the Department Head, Dr. Smith,

has been in that role for about two years and he is highly regarded as a researcher and professor.

You’ve heard that Smith was put into the role of Department Head because of his excellent teaching and

research abilities. Students always rated him highly for his teaching and ability to help place students in

jobs both during their studies and upon graduation. He also has somewhat of a reputation of liking the

company of female students.

After multiple attempts and messages left to call the Internal Audit Office, you finally talked to Dr.

Smith. Smith was very concerned about how long an audit would take and made several references

complaining about the red tape and bureaucracy of the university. He said as a professor and

researcher, he doesn’t have time for “all that stuff” and tries to let his financial administrator who has

been with RU for 25 years handle all of that “BS”. Smith said he did have a university purchasing card

but hadn’t seen it for some time. Smith also mentioned he would be out of the country this summer

related to some of his research work. Smith has developed several highly sensitive patents and works

closely with some local companies related to his area of specialty.

You meet with the financial secretary, Mrs. Jones and learn that right now she has two open positions

due to her terminating one employee recently and another who quit unexpectedly. Mrs. Jones has a

reputation on campus of being difficult to deal with. Mrs. Jones is very defensive in your first meeting

almost to the point of belligerent. You know Mrs. Jones has a side catering business as well that she

operates nights and weekends.

You talk to purchasing and learn that the department has more than a dozen purchasing cards issued to

individuals in the department, including Mrs. Jones and Dr. Smith. In reviewing the leave for the

department you notice Mrs. Jones has not taken leave in some time and handles all the departmental

payroll and leave reporting as well. The department hires a great number of part time and student

employees to assist in data entry and collection related to research. Mrs. Jones is custodian of the

department’s petty cash fund and performs collections responsibilities for a national symposium put on

by RIS each year.

RIS has historically had a great deal of grant activity, however this seems to have declined the past few

years though costs seem to be transferred a great deal toward the end of some agreements. There

seems to be no clear reasons for many of the transfers near the project end dates.

1. What red flags do you see?

2. What risks really jump out at you?

3. What do you do?

4. Develop a plan to assess or investigate this as needed.

CASE #5

You are the auditor for Big State University. You have a handy dandy reporting system and just

got the following report via the hotline. Your job is to evaluate this situation and if appropriate

develop a plan to investigate.

_________________________________________________________________

Ms. Nunnley has been treating employees and students inappropriately for more than a year. In

fact, she has working at the university for over 25 years, and it is believed that she has been acting

inappropriately for many years.

There are many problems with Ms. Nunnley's conduct. For example, she is bossy and hateful. She

embarrasses students in front of other people on a daily basis. Recently, Ms. Nunnley said to a

student, "Boy, pull them pants up! Nobody wants to see your drawers," even though his pants were

only a little baggy. Ms. Nunnley often screams at people. She additionally gives the employees job

performance reviews that are inaccurate and, at times, completely false.

These are just several of the many problems with Ms. Nunnley. The reporter requests that her

unprofessional conduct is appropriately addressed and not allowed to continue any longer.

1. Primary issue?




CASE #6




This particular matter is concerning our campus employee picnic, an annual event for employees

and their families. I know that some of the local businesses donate items to be given away during

this event. A lot of these items are not being distributed appropriately. I happen to know the person

who is in charge of handling the bingo tent and she is taking most of the food certificates for herself.

I worked with her at the picnic one year and I know first‐hand that she took a thick envelope home

with her that contained food certificates. She actually provided my lunch a couple of times and had

the nerve to tell me how she was getting our lunch. This was only because she knew I saw her take

the certificates. She didn't offer to get my lunch until I had observed the big envelope at her

residence after she had called and asked me to go to her home and try to find some paper work for

her when she was out of town. She told me where to find her door key and told me where to look

for the papers she needed. Of course I also saw the big envelope of food certificates as I was looking

for other papers. The envelope with the big stack of food certificates was marked "Campus picnic ".

One day she said she wanted someone else in the dept. to go to Chick Filet and get some chicken

biscuits for breakfast because she couldn't be seen there using the certificates since she was the one

who had asked for the donation of certificates for the campus picnic. The local businesses need to

know their contributions are not making it to the proper places. They need to know the person

asking for the donation for this particular event is actually keeping it.

This is not the only under handed thing this person has done. She has also misused her University

purchasing card and bought things for her own personal use. She has bought items that were direct

charged and these items were used for her personal use. She has admitted to misuse of the

purchasing card. The department head is aware of all of these things and also these things have

already been addressed to the ethics‐point as well as to others that are involved in things like the

campus picnic. When these things are reported to someone in a much higher position, it is very

disturbing to hear that they cannot or will not do anything. If a person has already admitted to

misusing her university purchasing card, then why is that same person allowed to handle donations

at campus picnic? Everyone involved in the picnic is aware of the other problems but for some

reason choose to turn their heads. Makes you wonder what is in it for them. This has been going on

for several years. This person also calls on personal friends (not employees) to come and help her

with Bingo. This would be so she can easier get her hands on things like food certificates. She did not

work last year at the picnic because she was out of town on a conference/vacation paid for by the

dept. but she had a friend handle the bingo tent for her and sent word to her friend that she was

going to send someone over to pick up her goody bag.

1. Primary issue?




CASE #6




_________________________________________________________________________

Area: Athletics Department

Is management or the department aware of this problem? Yes

What is the general nature of this matter? Improper/illegal competitive bid process/manipulation

with possible kickbacks.

Where did this incident or violation occur? Athletics department and all involved in the

lease/purchase action associated with golf cars for support of athletics department and transport of

persons.

How did you become aware of this violation? Accidentally found a document or file

Details: University bid a contract for specified golf carts to support the Athletic Department. A new

director was hired/appointed and manipulated the contract language during the bid process to

eliminate competition and guide award to a golf cart company that did not have the ability to

perform.

1. Primary issue?




CASE #7




Athletes are given grades and credit for fake courses that were listed by Dr. Hancock but these

classes never meet nor are taught. Simply looking at the number or classes listed for Dr. Hancock

will show more than normal.

1. Primary issue?




CASE #8





Department Heads in College of Engineering are required to turn in annual and sick leave forms

when absent. This is not being done. Professor are required to turn in sick leave forms when absent.

This not being done.


This violation has been on‐going for the last 5 years. Far too many instances to cite.

Please provide the specific or approximate time this incident occurred: The last five years.


How did you become aware of this violation? I observed it

Details: This fact can be easily proven by looking at past payroll records at the university. Professors

and professor's spouses have died or had long‐term illnesses, where considerable amounts of time

has been taken. If payroll records are checked for the past five years it is clear that no sick leave for

almost all professors have been taken. One professor died of cancer and was sick for approximately

six to seven months before their death. When questions were asked before his death as to why he

was not required to turn in sick leave, the response was that he was working from his sick bed. The

majority of the time this professor was unconscious. Wonder how he was doing his work. Another

professor's wife was sick for over a year before she died. He was out for the majority of that year

prior to his death, and never turned in sick leave. Many professor are out with illnesses of their own

or with family members, and never take leave. All of this is reflected in payroll reports. Staff

employees are required to take leave for every hour (and I do mean hour) we are absent. This is also

reflected in payroll reports. Excuses have been made that they (professors) sometimes work at night

and on weekends. Well, so do the staff employees. When the professor leave or retire, they are paid

in full for time (as allowed by university) they have amassed. The department heads and student

advisors are required to take annual leave. They take numerous 2 to 3 day vacations and many

weekly vacations and the payroll reflect that no leave has ever been recorded.

1. Primary issue?




CASE #9




Issue Type: Research Grant Misconduct or Misappropriation of Costs

Please identify the person(s) engaged in this behavior: John Lock ‐ Associate Dean of Research Full

Professor of Engineering

What is the general nature of this matter? Possible mishandling or misappropriation of state and

federal funds in the Center of Forest Sustainability, School of Forestry and Wildlife Sciences


How did you become aware of this violation? Told to me by a co‐worker

Details: Possible mishandling or misappropriation of state and federal funds in the Center of Forest

Sustainability, School of Forestry and Wildlife Sciences

1. Primary issue?




CASE #10




Julie Front ‐ Assist. Professor

Jack Frost

Do you suspect or know that a supervisor or management is involved? Yes

If yes, then who? Steve Snow, Department Head

Is management or the department aware of this problem? Yes

What is the general nature of this matter? Nepotism. Dr. Frost hired her husband (Jack) to be her

employee and he has been paid with funds from accounts managed by Dr. Frost.

Where did this incident or violation occur? Department of Biology

Please provide the specific or approximate time this incident occurred: This nepotism is current


How did you become aware of this violation? Accidentally found a document or file

Please identify any persons who have attempted to conceal this problem and the steps they took to

conceal it: No attempt to conceal.

Details: Dr. Frost is a faculty member and is a project director. She hired her husband to work in her

lab. At least some of the salary for her husband has been from accounts managed by Dr. Frost. The

lab where Dr. Frost has her husband work is not in the main building used by the department so

some of the faculty and staff are probably not aware of this nepotism. However, the department

head, Dr. Snow, must be aware of this nepotism (he is listed as a second project leader on some of

the projects directed by Dr. Frost).

Documents

CASE #1 · PDF fileCASE #1 You are the auditor for Big State University. You have a handy dandy reporting system and just got the following report via the hotline