The State Employee Fraud, Waste, and Abuse Hotline

Jeffrey Gargiulo

Senior Internal Auditor

Virginia Department of Accounts

History of the Division of State History of the Division of State Internal Audit (DSIA)Internal Audit (DSIA)

19851985The DSIA established as a separate The DSIA established as a separate division within the Department of Accounts division within the Department of Accounts by legislative action. This gave the DSIA by legislative action. This gave the DSIA independence, promoted broad oversight of independence, promoted broad oversight of other internal audit functions and allowed other internal audit functions and allowed the flexibility to provide internal audit and the flexibility to provide internal audit and advisory services as requested by agency advisory services as requested by agency heads.heads.

19921992

Governor Wilder wrote the first Executive Governor Wilder wrote the first Executive Order to create the State Employee Fraud, Order to create the State Employee Fraud, Waste, and Abuse Hotline which has been Waste, and Abuse Hotline which has been operation ever since. On June 2, 2006 operation ever since. On June 2, 2006 Governor Kaine issued Executive # 12 to Governor Kaine issued Executive # 12 to ensure the employees of the ensure the employees of the Commonwealth continue to have the Commonwealth continue to have the opportunity to anonymously report opportunity to anonymously report instances of fraud, waste, and abuse.instances of fraud, waste, and abuse.

Executive Order #12Executive Order #12 Directs the State Internal Auditor to continue to administer Directs the State Internal Auditor to continue to administer

the the Hotline. Hotline.

Provides the DSIA with powers and directives to investigate Provides the DSIA with powers and directives to investigate fraud waste and abuse in executive State agencies. fraud waste and abuse in executive State agencies.

No one shall interfere with a hotline investigation or coerce No one shall interfere with a hotline investigation or coerce other not to cooperate with hotline investigators. other not to cooperate with hotline investigators.

No one shall directly or indirectly attempt to identify or No one shall directly or indirectly attempt to identify or retaliate retaliate against someone suspected of calling the or against someone suspected of calling the or cooperating with cooperating with the hotline. Retaliatory actions against a the hotline. Retaliatory actions against a caller will be subject to caller will be subject to disciplinary action under the Standards of disciplinary action under the Standards of Conduct Policy.Conduct Policy.

Administer the State Employee Administer the State Employee Fraud Waste, and Abuse HotlineFraud Waste, and Abuse Hotline

DSIA has one dedicated untraceable phone line DSIA has one dedicated untraceable phone line (No (No caller ID) to anonymously receive fraud, waste, caller ID) to anonymously receive fraud, waste,

and abuse callsand abuse calls

DSIA takes calls from State employeesDSIA takes calls from State employees

Screens the calls using a two-step processScreens the calls using a two-step process

Document the caller’s allegations to be sent to Document the caller’s allegations to be sent to appropriate agency internal auditor or Hotline appropriate agency internal auditor or Hotline Coordinator to investigateCoordinator to investigate

Enter case into Hotline database for Enter case into Hotline database for tracking and reporting purposestracking and reporting purposes

Review investigative reports from agency Review investigative reports from agency Internal Auditor (I/A)Internal Auditor (I/A)

Close case and enter outcome into the Close case and enter outcome into the hotline databasehotline database

Maintain the SEFWA Hotline Policies and Maintain the SEFWA Hotline Policies and Procedures ManualProcedures Manual

Conduct Hotline InvestigationsConduct Hotline Investigations

Via agency internal audit programsVia agency internal audit programs For agencies without internal audit staffFor agencies without internal audit staff When it involves Agency Heads, When it involves Agency Heads,

Governing Board Members and other Governing Board Members and other officialsofficials

Provide Oversight and Direction Provide Oversight and Direction to State Agenciesto State Agencies

Some State agencies do not have the staff Some State agencies do not have the staff or resources to review and develop or resources to review and develop internal controlsinternal controls

DSIA assists agencies in conducting DSIA assists agencies in conducting internal control reviews for a variety of internal control reviews for a variety of processesprocesses

DSIA makes recommendations to assist DSIA makes recommendations to assist the agencythe agency

The Hotline CallThe Hotline Call

Phone call is toll-freePhone call is toll-free Call is untraceable- no caller IDCall is untraceable- no caller ID Call is answered with a scripted responseCall is answered with a scripted response Caller is asked not to identify themselvesCaller is asked not to identify themselves Caller’s gender not identified in case write-Caller’s gender not identified in case write-

upup

Documenting the callDocumenting the call

Ask the caller: Who, What, Where, When Ask the caller: Who, What, Where, When

-Perform level one screening process-Perform level one screening process-Does the call fall within our jurisdiction?-Does the call fall within our jurisdiction?-Is the agency an executive branch agency?-Is the agency an executive branch agency?-Does the call involve discrimination, -Does the call involve discrimination, harassment, etc.?harassment, etc.?

If yes, refer the caller to the appropriate place to If yes, refer the caller to the appropriate place to report the allegationreport the allegation

We receive phone calls, but occasionally we We receive phone calls, but occasionally we receive hotline cases via the mail, email, and receive hotline cases via the mail, email, and envelopes put under our doorenvelopes put under our door

Investigator records what caller stated regarding Investigator records what caller stated regarding the allegation obtaining as much detail as the allegation obtaining as much detail as possible on the SEFWA Hotline formpossible on the SEFWA Hotline form

Assign call a case number and case number to Assign call a case number and case number to callercaller

Documenting the CallDocumenting the Call

Route the call write-up to audit manager to Route the call write-up to audit manager to perform the Level Two screening process perform the Level Two screening process

-Is there enough information/detail to perform an -Is there enough information/detail to perform an investigation?investigation?

- Seriousness of the allegation- Seriousness of the allegation-Materiality of the allegation-Materiality of the allegation-Timing of the allegation - how long ago did it occur?-Timing of the allegation - how long ago did it occur?-Has the allegation been reported/investigated recently?-Has the allegation been reported/investigated recently?

The call may be screened out (based upon The call may be screened out (based upon screening criteria) or sent to appropriate agency screening criteria) or sent to appropriate agency internal auditor for investigation internal auditor for investigation

DSIA will perform investigation if agency does DSIA will perform investigation if agency does not have an I/A or Hotline Coordinator (H/C)not have an I/A or Hotline Coordinator (H/C)

DSIA may investigate any hotline case - even if DSIA may investigate any hotline case - even if the agency has an I/A or a H/Cthe agency has an I/A or a H/C

Enter the case data into the FWA hotline Enter the case data into the FWA hotline databasedatabase

What if the allegation involves an agency head, What if the allegation involves an agency head, I/A, governing board member or other high-level I/A, governing board member or other high-level

official?official? DSIA would then perform investigations DSIA would then perform investigations

that involve any of the individuals that involve any of the individuals mentioned abovementioned above

A report of allegations, findings, A report of allegations, findings, conclusions and recommendation would conclusions and recommendation would be issued to the Secretary over that be issued to the Secretary over that agencyagency

A copy to the Governor’s Chief of StaffA copy to the Governor’s Chief of Staff

When DSIA Receives Investigative When DSIA Receives Investigative Report From Agency Internal Auditor:Report From Agency Internal Auditor:

Reviews report to ensure allegations were Reviews report to ensure allegations were adequately addressed with reasonable adequately addressed with reasonable conclusions reachedconclusions reached

Follow-up occasionally with I/A as to Follow-up occasionally with I/A as to questions or concerns questions or concerns

Upon resolution with the report, closes out Upon resolution with the report, closes out the case and records the information in the case and records the information in DSIA databaseDSIA database

All SEFWA hotline work papers are All SEFWA hotline work papers are confidentialconfidential

Investigative reports are available to Investigative reports are available to callers through the FOIA in a redacted callers through the FOIA in a redacted formatformat

DSIA DatabaseDSIA Database Case number, agency number, and agency nameCase number, agency number, and agency name Date call was received, date referred for investigation Date call was received, date referred for investigation

and date that the report is due to DSIAand date that the report is due to DSIA Information relating to the case being open, closed, or Information relating to the case being open, closed, or

screened outscreened out To whom the case was referred - I/A, H/C, DSIA or other To whom the case was referred - I/A, H/C, DSIA or other

agencyagency Name of the subject in the allegationName of the subject in the allegation Summary of the allegationSummary of the allegation Date case was closedDate case was closed If the case was substantiated, unsubstantiated, or If the case was substantiated, unsubstantiated, or

improvements made in internal controlsimprovements made in internal controls Corrective action taken, if anyCorrective action taken, if any Using the database records, issues various monthly Using the database records, issues various monthly

reports internally regarding DSIA hotline statisticsreports internally regarding DSIA hotline statistics

Hotline StatisticsHotline Statistics

Number of Cases AssignedNumber of Cases Assigned FY 2008- 513FY 2008- 513 FY 2007- 443FY 2007- 443 FY 2006- 474FY 2006- 474 FY 2005- 443FY 2005- 443

State Employee Fraud, Waste And Abuse State Employee Fraud, Waste And Abuse

HotlineHotline PurposePurpose

All State EmployeesAll State Employees

State Employee Hotline provides state employees State Employee Hotline provides state employees with an opportunity to report significant instances with an opportunity to report significant instances of fraud, waste or abuse anonymously by using a of fraud, waste or abuse anonymously by using a toll-free hotline number. toll-free hotline number.

Major objective of the hotline is to identify Major objective of the hotline is to identify situations where fraud, waste, or abuse may have situations where fraud, waste, or abuse may have occurred in state agencies and institutions so it occurred in state agencies and institutions so it can be eliminated. can be eliminated.

If you observe a situation within your own agency If you observe a situation within your own agency that appears to involve fraud, waste, or abuse, that appears to involve fraud, waste, or abuse, give us a call - it's toll free and anonymous. give us a call - it's toll free and anonymous.

Why Should You Contact The State Why Should You Contact The State Employee Fraud, Waste, And Abuse Employee Fraud, Waste, And Abuse

Hotline?Hotline? Because we all share a common goal: To provide the Because we all share a common goal: To provide the

citizens of the Commonwealth with an honest, effective, citizens of the Commonwealth with an honest, effective, and efficient state government. and efficient state government.

Further, it is every State employee's obligation to report Further, it is every State employee's obligation to report significant instances of fraud, waste, or abuse to significant instances of fraud, waste, or abuse to management. management.

If employees are uncomfortable with reporting to If employees are uncomfortable with reporting to management, then they have the opportunity to report it management, then they have the opportunity to report it anonymously to the Hotline. anonymously to the Hotline.

When there is fraud, waste, or abuse in our state When there is fraud, waste, or abuse in our state government, we all suffer, as taxpayers and as government, we all suffer, as taxpayers and as employees of the Commonwealth. employees of the Commonwealth.

Who Can Call? Who Can Call?

Any classified, at-will, contract, part-time, Any classified, at-will, contract, part-time, or full-time state employee. or full-time state employee.

When Should Employees Call?When Should Employees Call?

When the employee first learns of the fraud, When the employee first learns of the fraud, waste, or abuse. Keep in mind, the longer it has waste, or abuse. Keep in mind, the longer it has been from the incident and the time it is been from the incident and the time it is reported, the more difficult it becomes to reported, the more difficult it becomes to investigate. investigate.

The Hotline is available for reporting significant The Hotline is available for reporting significant instances of fraud, waste, and abuse from instances of fraud, waste, and abuse from 8:15 a.m. to 5:00 p.m., Monday through Friday, 8:15 a.m. to 5:00 p.m., Monday through Friday, except state holidays. except state holidays.

How Are Callers Protected?How Are Callers Protected?

You are never asked to provide your name when you call You are never asked to provide your name when you call the Hotline, nor is your call traceable. the Hotline, nor is your call traceable.

Should never be an attempt on anyone's part to try to Should never be an attempt on anyone's part to try to identify the caller. identify the caller.

If someone is suspected of calling the Hotline or if the If someone is suspected of calling the Hotline or if the caller is found out, there can be no retaliation or caller is found out, there can be no retaliation or retribution. If there is, it is a violation of policy and the retribution. If there is, it is a violation of policy and the Executive Order and we take it seriously in order to Executive Order and we take it seriously in order to protect the integrity and credibility of the Hotline. protect the integrity and credibility of the Hotline.

Retaliation against anyone for calling the Hotline is also Retaliation against anyone for calling the Hotline is also reportable through the grievance process. reportable through the grievance process.

What Should Be Reported And What Should Be Reported And What Should Not Be Reported?What Should Not Be Reported?

It is not for general complaints, suggestions, or personnel issuesIt is not for general complaints, suggestions, or personnel issues

The Hotline does not accept calls of allegations that involve the The Hotline does not accept calls of allegations that involve the Legislative Branch (we do have a cooperative agreement with the Legislative Branch (we do have a cooperative agreement with the Auditor of Public Accounts), the Judicial Branch (we do have a Auditor of Public Accounts), the Judicial Branch (we do have a cooperative agreement with the Supreme Court of Virginia), cooperative agreement with the Supreme Court of Virginia), localities, or private businesseslocalities, or private businesses

The caller will be referred to the appropriate agency to report those The caller will be referred to the appropriate agency to report those callscalls

The Hotline is reserved for reporting: The Hotline is reserved for reporting:

-Illegal or Fraudulent Conduct -Illegal or Fraudulent Conduct -Waste of Funds -Waste of Funds -Abuse of State Property or Resources -Abuse of State Property or Resources -Gross Mismanagement -Gross Mismanagement -Gross Neglect of Duty -Gross Neglect of Duty

Questions???Questions???