COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Fraud in the Workplace POLICY
NUMBER
EFFECTIVE
DATE
PAGE
662-13 06/23/2009
11/12/2024
1 of 8
ADOPTED BY: Resolution No. 2009-151 DATED: June 23, 2009 AMENDED BY:
PURPOSE AND SCOPE
To establish policy and procedures for clarifying acts that are considered to be fraudulent, describing the steps to be taken when fraud or other related dishonest activities are suspected, and providing procedures to follow in accounting for missing funds, restitution and recoveries.
GENERAL
A. The City of Chula Vista is committed to protecting its assets against the risk of loss or misuse. Accordingly, it is the policy of the City of Chula Vista to identify and promptly investigate any possibility of fraudulent or related dishonest activities against the City and, when appropriate, to pursue legal remedies available under the law.
B. DEFINITIONS
1. Fraud - Fraud and other similar irregularities include, but are not limited to:
a. Claim for reimbursement of expenses that are not job-related or authorized by the current Memorandum of Understanding.
b. Forgery or unauthorized alteration of documents (checks, promissory notes, time sheets, independent contractor agreements, purchase orders, budgets, etc.).
c. Misappropriation of City assets (funds, securities, supplies, furniture, equipment, etc.).
d. Improprieties in the handling or reporting of money transactions.
e. Authorizing or receiving payment for goods not received or services not performed.
f. Computer-related activity involving unauthorized alteration, destruction, forgery, or manipulation of data or misappropriation of City-owned software.
g. Misrepresentation of information on documents.
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Fraud in the Workplace POLICY
NUMBER
EFFECTIVE
DATE
PAGE
662-13 06/23/2009
11/12/2024
2 of 8
ADOPTED BY: Resolution No. 2009-151 DATED: June 23, 2009 AMENDED BY:
h. Any apparent violation of Federal, State, or Local laws related to dishonest activities or fraud.
i. Seeking or accepting anything of material value from those doing business with the City including vendors, consultants, contractors, lessees, applicants, and grantees. Materiality is determined by the City's Conflict of Interest Code (C.V.M.C.
Chapter 2.02), which incorporates the Fair Political Practices Commission's regulations.
2. Employee - In this context, employee refers to any individual or group of individuals who receive compensation, either full- or part-time, from the City of Chula Vista. The term also includes any volunteer who provides services to the City through an official arrangement with the City or a City organization including City Council Members, Planning Commissioners and members of other City boards.
3. Management - In this context, management refers to any administrator, manager, director, supervisor, or other individual who manages or supervises funds or other resources, including human resources.
4. Investigator - In this context, Investigator refers to any person or persons assigned by the City Manager or City Attorney to investigate any fraud or similar activity.
5. External Auditor - In this context, External Auditor refers to independent audit professionals who perform annual audits of the City's financial statements.
C. It is the City's intent to fully investigate any suspected acts of fraud, misappropriation, or other similar irregularity. An objective and impartial investigation will be conducted regardless of the position, title, length of service or relationship with the City of any party who might be or become involved in or becomes the subject of such investigation.
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Fraud in the Workplace POLICY
NUMBER
EFFECTIVE
DATE
PAGE
662-13 06/23/2009
11/12/2024
3 of 8
ADOPTED BY: Resolution No. 2009-151 DATED: June 23, 2009 AMENDED BY:
D. Each department of the City is responsible for instituting and maintaining a system of internal control to provide reasonable assurance for the prevention and detection of fraud, misappropriations, and other irregularities. Management should be familiar with the types of improprieties that might occur within their area of responsibility and be alert for any indications of such conduct.
E. The Investigator, in conjunction with the City Attorney, has the primary responsibility for the investigation of all activity as defined in this policy.
F. Throughout the investigation, the Investigator will inform the City Manager of pertinent investigative findings.
G. When reporting acts of suspected fraud or other irregularities, employees will be granted whistle-blower protection when acting in accordance with this policy. When informed of a suspected impropriety, neither the City nor any person acting on behalf of the City shall:
1. Dismiss or threaten to dismiss the employee,
2. Discipline, suspend, or threaten to discipline or suspend the employee,
3. Impose any penalty upon the employee, or
4. Intimidate or coerce the employee.
Violations of the whistle-blower protection will result in discipline up to and including dismissal.
H. Upon conclusion of the investigation, the results will be reported to the City Manager or City Attorney.
I. The City Manager or City Attorney, following review of investigation results, will take appropriate action regarding employee misconduct. Disciplinary action can include termination, and referral of the case to the District Attorney's Office for possible prosecution.
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Fraud in the Workplace POLICY
NUMBER
EFFECTIVE
DATE
PAGE
662-13 06/23/2009
11/12/2024
4 of 8
ADOPTED BY: Resolution No. 2009-151 DATED: June 23, 2009 AMENDED BY:
J. The City will pursue every reasonable effort, including court ordered restitution, to obtain recovery of City losses from the offender, or other appropriate sources.
Additionally, if an employee is convicted of a felony in a state or federal court for the fraudulent activities conducted in the workplace, they may face forfeiture of accrued rights and benefits in any public retirement system.
PROCEDURES
A. Mayor, City Council and Commissioner Responsibilities
1. If the Mayor, a City Council member, or a Commissioner has reason to suspect that a fraud has occurred, he or she shall immediately contact the City Manager or City Attorney.
2. The Mayor, City Council member, or Commissioner shall not attempt to investigate the suspected fraud or discuss the matter with anyone other than the City Manager or City Attorney.
3. The alleged fraud or audit investigation shall not be discussed with the media by any person other than the City Manager or City Attorney, or at their direction.
B. Management Responsibilities
1. Management is responsible for being alert to, and reporting fraudulent or related dishonest activities in their areas of responsibility.
2. Each manager should be familiar with the types of improprieties that might occur in his or her area and be alert for any indication that improper activity, misappropriation, or dishonest activity is or was in existence in his or her area.
3. When an improper activity is detected or suspected, management should determine whether an error or mistake has occurred or if there may be dishonest or fraudulent activity.
4. If management determines a suspected activity may involve fraud or related dishonest activity, they should contact their immediate supervisor.
5. Department Directors should inform the City Manager or City Attorney.
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Fraud in the Workplace POLICY
NUMBER
EFFECTIVE
DATE
PAGE
662-13 06/23/2009
11/12/2024
5 of 8
ADOPTED BY: Resolution No. 2009-151 DATED: June 23, 2009 AMENDED BY:
6. Management should not attempt to conduct individual investigations, interviews, or interrogations. However, management is responsible for taking appropriate corrective actions to ensure adequate controls exist to prevent reoccurrence of improper actions.
7. Management should support the City's responsibilities and cooperate fully with the Investigator, other involved departments, and law enforcement agencies in the detection, reporting, and investigation of criminal acts, including the prosecution of offenders.
8. Management must give full and unrestricted acces s to all necessary records and personnel. All City furniture and contents, including desks and computers, are open to inspection at any time. There is no assumption of privacy.
9. In dealing with suspected dishonest or fraudulent activities, great care must be taken. Therefore, management should avoid the following:
a. Incorrect accusations.
b. Alerting suspected individuals that an investigation is underway.
c. Treating employees unfairly.
d. Making statements that could lead to claims of false accusations or other offenses.
10. In handling dishonest or fraudulent activities, management has the responsibility to:
a. Make no contact (unless requested) with the suspected individual to determine facts or demand restitution. Under no circumstances should there be any reference to "what you did", "the crime", "the fraud", "the misappropriation", etc.
b. Avoid discussing the case, facts, suspicions, or allegations with anyone outside the City, unless specifically directed to do so by the City Attorney.
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Fraud in the Workplace POLICY
NUMBER
EFFECTIVE
DATE
PAGE
662-13 06/23/2009
11/12/2024
6 of 8
ADOPTED BY: Resolution No. 2009-151 DATED: June 23, 2009 AMENDED BY:
c. Avoid discussing the case with anyone inside the City other than employees who have a need to know such as the City Manager, Investigator, or City Attorney or law enforcement personnel.
d. Direct all inquiries from the suspected individual, or his or her representative, to the City Manager or City Attorney. All inquiries by an attorney of the suspected individual should be directed to the City Attorney. All inquiries from the media should be directed to the City Manager or City Attorney.
e. Take appropriate corrective and disciplinary action, up to and including dismissal, after consulting with the Personnel Analyst, in conformance with the City's Personnel Policies and
Procedures or the appropriate Memorandum of Understanding.
C. Employee Responsibilities
1. A suspected fraudulent incident or practice observed by, or made known to, an employee must be reported to the employee's supervisor for reporting to the proper management official.
2. When the employee believes the supervisor may be involved in the inappropriate activity, the employee shall make the report directly to the next higher level of management, the City Manager, or the City Attorney.
3. The reporting employees shall refrain from further investigation of the incident, confrontation with the alleged violator, or further discussion of the incident with anyone, unless requested by the City Manager, Investigator, City Attorney or law enforcement personnel.
D. Investigator Responsibilities
1. Upon assignment by the City Manager or City Attorney, the Investigator will promptly investigate the fraud.
2. In all circumstances where there appears to be reasonable grounds for suspecting that a fraud has taken place, the Investigator, in consultation with the City Attorney, will contact the Chula Vista Police Department.
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Fraud in the Workplace POLICY
NUMBER
EFFECTIVE
DATE
PAGE
662-13 06/23/2009
11/12/2024
7 of 8
ADOPTED BY: Resolution No. 2009-151 DATED: June 23, 2009 AMENDED BY:
3. The Investigator shall be available and receptive to receiving relevant, confidential information to the extent allowed by law.
4. If evidence is uncovered showing possible dishonest or fraudulent activities, the Investigator will proceed as follows:
a. Discuss the findings with management and the Department Director.
b. Advise management, if the case involves staff members, to meet with the City Manager (or his/her designated representative) to determine if disciplinary actions should be taken.
c. Advise the City Attorney, if the case involves the City Manager, to determine what actions should be taken.
d. Report to the External Auditor such activities in order to assess the effect of the illegal activity on the City's financial statements.
e. Coordinate with the City's Risk Management Division regarding notification to insurers and filing of insurance claims.
f. Take immediate action, in consultation with the City Attorney, to prevent the theft, alteration, or destruction of evidentiary records. Such action shall include, but is not limited to:
1) Remove the records and place them in a secure location, or limiting access to the location where the records currently exist.
2) Prevent the individual suspected of committing the fraud from having access to the records.
5. In consultation with the City Attorney and the Chula Vista Police Department, the Investigator may disclose particulars of the investigation with potential witnesses if such disclosure would further the investigation.
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: Fraud in the Workplace POLICY
NUMBER
EFFECTIVE
DATE
PAGE
662-13 06/23/2009
11/12/2024
8 of 8
ADOPTED BY: Resolution No. 2009-151 DATED: June 23, 2009 AMENDED BY:
6. If the Investigator is contacted by the media regarding an alleged fraud or audit investigation, the Investigator will consult with the City Manager and the City Attorney, as appropriate, before responding to a media request for information or interview.
7. At the conclusion of the investigation, the Investigator will document the results in a confidential memorandum report to the City Manager and/or the City Attorney, as appropriate. If the report concludes that the allegations are founded, the report will be forwarded to the Chula Vista Police Department.
8. Unless exceptional circumstances exist, a person under investigation for fraud is to be given notice in writing of essential particulars of the allegations following the conclusion of the investigation. Where notice is given, the person against whom allegations are being made may submit a written explanation to the Investigator no later than seven calendar days after notice is received.
9. The Investigator will be required to make recommendations to the appropriate department for assistance in the prevention of future similar occurrences.
10. Upon completion of the investigation, including all legal and personnel actions, all records, documents, and other evidentiary material, obtained from the department under investigation will be returned by the Investigator to that department.
I. Forfeiture of Benefits
1. Under the California Public Employees' Pension Reform Act, members who have been convicted by a state or federal trial court of any felony under the law for conduct arising out of or in the performance of his or her official duties, in pursuit of the office or appointment, or in connection with obtaining salary, disability, service retirement, or other benefits, must forfeit all accrued rights and benefits in any public retirement system they are a member of at the time the felony is committed retroactive to the first commission date of the crime.
The Government Codes related to forfeiture of benefits are 7522.72 and 7522.74
https://www.calpers.ca.gov/docs/forms-publications/fact-sheet-forfeiture-of-benefits.pdf
JI. AUTHORITY
By authority of the City Manager and the City Attorney.
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