The State Employee Fraud, Waste, and Abuse Hotline

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The State Employee Fraud, Waste, and Abuse Hotline

• Jeffrey Gargiulo
• Senior Internal Auditor
• Virginia Department of Accounts

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History of the Division of State Internal Audit
(DSIA)

• 1985
• The DSIA established as a separate division
  within the Department of Accounts by legislative
  action. This gave the DSIA independence, promoted
  broad oversight of other internal audit functions
  and allowed the flexibility to provide internal
  audit and advisory services as requested by
  agency heads.

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1992

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

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Executive Order 12

• Directs the State Internal Auditor to continue
  to administer the Hotline.
• Provides the DSIA with powers and directives to
  investigate fraud waste and abuse in executive
  State agencies.
• No one shall interfere with a hotline
  investigation or coerce other not to cooperate
  with hotline investigators.
• No one shall directly or indirectly attempt to
  identify or retaliate against someone suspected
  of calling the or cooperating with the hotline.
  Retaliatory actions against a caller will be
  subject to disciplinary action under the
  Standards of Conduct Policy.

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Administer the State Employee Fraud Waste, and
Abuse Hotline

• DSIA has one dedicated untraceable phone line
  (No caller ID) to anonymously receive fraud,
  waste, and abuse calls
• DSIA takes calls from State employees
• Screens the calls using a two-step process
• Document the callers allegations to be sent to
  appropriate agency internal auditor or Hotline
  Coordinator to investigate

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• Enter case into Hotline database for tracking and
  reporting purposes
• Review investigative reports from agency Internal
  Auditor (I/A)
• Close case and enter outcome into the hotline
  database
• Maintain the SEFWA Hotline Policies and
  Procedures Manual

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Conduct Hotline Investigations

• Via agency internal audit programs
• For agencies without internal audit staff
• When it involves Agency Heads, Governing Board
  Members and other officials

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Provide Oversight and Direction to State Agencies

• Some State agencies do not have the staff or
  resources to review and develop internal controls
• DSIA assists agencies in conducting internal
  control reviews for a variety of processes
• DSIA makes recommendations to assist the agency

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The Hotline Call

• Phone call is toll-free
• Call is untraceable- no caller ID
• Call is answered with a scripted response
• Caller is asked not to identify themselves
• Callers gender not identified in case write-up

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Documenting the call

• Ask the caller Who, What, Where, When
• -Perform level one screening process
• -Does the call fall within our jurisdiction?
• -Is the agency an executive branch agency?
• -Does the call involve discrimination,
  harassment, etc.?
• If yes, refer the caller to the appropriate place
  to report the allegation

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• We receive phone calls, but occasionally we
  receive hotline cases via the mail, email, and
  envelopes put under our door
• Investigator records what caller stated regarding
  the allegation obtaining as much detail as
  possible on the SEFWA Hotline form
• Assign call a case number and case number to
  caller

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Documenting the Call

• Route the call write-up to audit manager to
  perform the Level Two screening process
• -Is there enough information/detail to perform an
  investigation?
• - Seriousness of the allegation
• -Materiality of the allegation
• -Timing of the allegation - how long ago did it
  occur?
• -Has the allegation been reported/investigated
  recently?

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• The call may be screened out (based upon
  screening criteria) or sent to appropriate agency
  internal auditor for investigation
• DSIA will perform investigation if agency does
  not have an I/A or Hotline Coordinator (H/C)
• DSIA may investigate any hotline case - even if
  the agency has an I/A or a H/C
• Enter the case data into the FWA hotline database

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

• DSIA would then perform investigations that
  involve any of the individuals mentioned above
• A report of allegations, findings, conclusions
  and recommendation would be issued to the
  Secretary over that agency
• A copy to the Governors Chief of Staff

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When DSIA Receives Investigative Report From
Agency Internal Auditor

• Reviews report to ensure allegations were
  adequately addressed with reasonable conclusions
  reached
• Follow-up occasionally with I/A as to questions
  or concerns
• Upon resolution with the report, closes out the
  case and records the information in DSIA database

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• All SEFWA hotline work papers are confidential
• Investigative reports are available to callers
  through the FOIA in a redacted format

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DSIA Database

• Case number, agency number, and agency name
• Date call was received, date referred for
  investigation and date that the report is due to
  DSIA
• Information relating to the case being open,
  closed, or screened out
• To whom the case was referred - I/A, H/C, DSIA or
  other agency
• Name of the subject in the allegation
• Summary of the allegation
• Date case was closed
• If the case was substantiated, unsubstantiated,
  or improvements made in internal controls
• Corrective action taken, if any
• Using the database records, issues various
  monthly reports internally regarding DSIA hotline
  statistics

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Hotline Statistics

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

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State Employee Fraud, Waste And Abuse Hotline
Purpose
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All State Employees

• State Employee Hotline provides state employees
  with an opportunity to report significant
  instances of fraud, waste or abuse anonymously by
  using a toll-free hotline number.
• Major objective of the hotline is to identify
  situations where fraud, waste, or abuse may have
  occurred in state agencies and institutions so it
  can be eliminated.
• If you observe a situation within your own agency
  that appears to involve fraud, waste, or abuse,
  give us a call - it's toll free and anonymous.

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

• Because we all share a common goal To provide
  the citizens of the Commonwealth with an honest,
  effective, and efficient state government.
• Further, it is every State employee's obligation
  to report significant instances of fraud, waste,
  or abuse to management.
• If employees are uncomfortable with reporting to
  management, then they have the opportunity to
  report it anonymously to the Hotline.
• When there is fraud, waste, or abuse in our state
  government, we all suffer, as taxpayers and as
  employees of the Commonwealth.

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Who Can Call?

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

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When Should Employees Call?

• When the employee first learns of the fraud,
  waste, or abuse. Keep in mind, the longer it has
  been from the incident and the time it is
  reported, the more difficult it becomes to
  investigate.
• The Hotline is available for reporting
  significant instances of fraud, waste, and abuse
  from
• 815 a.m. to 500 p.m., Monday through Friday,
  except state holidays.

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How Are Callers Protected?

• You are never asked to provide your name when you
  call the Hotline, nor is your call traceable.
• Should never be an attempt on anyone's part to
  try to identify the caller.
• If someone is suspected of calling the Hotline or
  if the caller is found out, there can be no
  retaliation or retribution. If there is, it is a
  violation of policy and the Executive Order and
  we take it seriously in order to protect the
  integrity and credibility of the Hotline.
• Retaliation against anyone for calling the
  Hotline is also reportable through the grievance
  process.

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What Should Be Reported And What Should Not Be
Reported?

• It is not for general complaints, suggestions, or
  personnel issues
• The Hotline does not accept calls of allegations
  that involve the Legislative Branch (we do have a
  cooperative agreement with the Auditor of Public
  Accounts), the Judicial Branch (we do have a
  cooperative agreement with the Supreme Court of
  Virginia), localities, or private businesses
• The caller will be referred to the appropriate
  agency to report those calls
• The Hotline is reserved for reporting
• -Illegal or Fraudulent Conduct
• -Waste of Funds
• -Abuse of State Property or Resources
• -Gross Mismanagement
• -Gross Neglect of Duty

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Questions???