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Reporting & Investigating Improper Governmental Activities

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1 Reporting & Investigating Improper Governmental Activities
John Lohse – Director of Investigations Judith Rosenberg-Principal Investigator Office of the SVP/Chief Compliance & Audit Officer of the Regents UC’s Whistleblower Policy & Whistleblower Protection Policy are statutory policies defining our responsibilities when improper governmental activities occur at a UC campus, lab, medical center or other UC-operated institution. Our Whistleblower Program is a part of the Office of SVP Sheryl Vacca, the Chief Compliance & Audit Officer of the Regents. Our position within the UC System reveals how seriously UC takes reports of wrongdoing.

2 UC Whistleblower Program
Agenda Importance of Your Role Who Investigates What? UC Whistleblower Policies Dos & Don’ts Exercising Judgment Our presentation will give you an overview of UC’s Whistleblower Policies & procedures. We’ll provide you with resources & allow you to practice some of the techniques we cover today. December 2011 UC Whistleblower Program

3 UC Whistleblower Program
UC’s Whistleblower Policy is important because it’s the method that uncovers most of the fraud & other illegal or unethical activity that takes place within the UC System. Your role is important both as an employee & as a supervisor or manager. Association of Certified Fraud Examiners’ CONCLUSION ON DETECTING FRAUD “Occupational frauds are more likely to be detected by tips than by any other means” Association of Certified Fraud Examiners, 2010 Report to the Nation on Occupational Fraud and Abuse December 2011 UC Whistleblower Program

4 See overview of policies from BOI Pre Work UC Whistleblower Program
UC has 2 policies that accord with the state laws regulating institutions receiving funding from the State of California. Our Whistleblower Policy establishes what & how to report. Our Whistleblower Protection Policy ensures that anyone blowing the whistle on an improper activity cannot be retaliated against. Policy on Reporting & Investigating Allegations of Suspected Improper Governmental Activities See overview of policies from BOI Pre Work December 2011 UC Whistleblower Program

5 Investigations Summary UC Whistleblower Program
Fiscal Year Investigations Summary 619 New Cases/689 Allegations* 277/45% UC Hotline, Anonymous Reporter 91/15% UC Hotline, Identified Reporter 61/10% Non-Hotline, Anonymous Reporter 190/30% Non-Hotline, Identified Reporter 428 Closed Cases** 62/15% Substantiated 138/32% Not Substantiated 228/53% Other Outcomes*** * A Case can include up to or more than 3 Allegations ** Closed Cases include related allegations *** Other Outcomes includes Not Specified, Inconclusive, Referred to Management, Frivolous Escalated to Campus Police, Escalated to Compliance, Escalated to HR/ELR, Investigated/Inconclusive Initiator Unwilling to Participate, Policy & Procedural Change Needed, Unable to Verify In this chart, all of the green slices represent an internal UC source. More than a third of our investigations result from employees reporting a situation they encountered in the course of their daily work. Another 11% originate with UC Managers & Supervisors who might also be reporting an improper activity discovered as a part of their job, or one that was referred to them by a subordinate. 1% come from UC Senior Managers or Regents, 2% from Internal Audit & 3% from UC students. November 2010 UC Whistleblower Program

6 Who Performs Investigations?
Academic Personnel Animal Research Office Disability Coordinator Environmental Health & Safety Health Sciences Compliance Officer Human Resources Labor Relations Employee Relations EEO/AA Risk Management Student Judicial Affairs ECAS Investigations (UCOP) Institutional Review Board Internal Audit Management overseeing ad hoc external processes Medical Staff NCAA Compliance Officer Office of the General Counsel Privilege & Tenure Committee Research Administration Retaliation Complaint Officer Title IX Officer University Police LDO Investigators A variety of different offices at UC perform investigations – 22 in all - reflecting the many types of whistleblower complaints we receive. Some reports allege multiple categories of wrongdoing. In those cases, several offices may be involved in the investigation, with one office taking the lead. Investigations may also be conducted by outside fact finders. We sometimes choose to use external investigators in order to ensure independence. December 2011 UC Whistleblower Program

7 UC Whistleblower Program
Policy Objective To adhere to the spirit of the state whistleblower statutes by creating an environment in which suspected improprieties are brought forward without fear of retaliation and mechanisms that ensure an appropriate institutional response to all suspected improprieties (not just whistleblower reports). At UC, we follow the spirit, not just the letter, of the law. Our objectives in our Whistleblower Policy & Whistleblower Protection Policy is to create a culture of ethical compliance. We want our faculty, staff, administration & students to bring forward suspicions of improprieties without fear of retaliation. We want our procedures to ensure appropriate institutional responses. December 2011 UC Whistleblower Program

8 UC Whistleblower Program
Definitions Improper Governmental Act (IGA) Any activity by a state agency or by an employee that is undertaken in the performance of the employee’s official duties, whether or not that action is within the scope of his or her employment, and that (1) is in violation of any state or federal law or regulation including, but not limited to, corruption, malfeasance, bribery, theft of government property, fraudulent claims, fraud, coercion, conversion, malicious prosecution, misuse of government property, or willful omission to perform duty or is economically wasteful, or involves gross misconduct, incompetence, or inefficiency. The state statutes refer to Improper Governmental Acts. What is an Improper Governmental Act? (read definition). The statute’s language is general & while it gives examples, most improper acts can fall under this category. For example, although sexual harassment isn’t listed, it’s also against the law, just as any form of discrimination in employment practices is against the law. December 2011 UC Whistleblower Program

9 UC Whistleblower Program
Definitions Protected Disclosure*: any good faith communication that discloses or demonstrates an intention to disclose information that may evidence an improper act or any condition that may significantly threaten the health or safety of employees or the public if the disclosure or intention to disclose was made for the purpose of remedying that condition. *Not restricted to whistleblowers. The statute refers to any good faith report of an IGA as a Protected Disclosure. This distinction becomes an important aspect of our Whistleblower Protection Policy. Protected disclosures are not restricted to those who called our anonymous hotline. In effect, you have become a whistleblower if you disclose information in good faith that may evidence an IGA or any other condition that could significantly threaten the health or safety of employees or the public. UC Whistleblower Program December 2011

10 UC Whistleblower Program
Key Concepts Can be in a variety of forms Can be to management OR any University official If not recognized as a IGA when made, danger of re-characterization as retaliation complaint Malicious intent does not nullify the potential validity of allegations Frivolous complaints may themselves be IGAs Whistleblower reports can take a variety of forms: oral or written, made through the anonymous hotline, to line management or senior officials. Whoever receives the report is bound to treat it seriously, according to our policy & procedures. “For the purpose of remedying that condition” is normally assumed December 2011 UC Whistleblower Program

11 universityofcalifornia/edu.hotline UC Whistleblower Program
EthicsPoint is the University’s hotline provider. Reporters can use either the phone or our web portal. Hotline cases are automatically entered into the investigations case management product & notifications are made to the appropriate staff at each location, based on the type of allegation reported. universityofcalifornia/edu.hotline report in English or Spanish – report in any language December 2011 UC Whistleblower Program

12 Investigations Policy Overview
Reporting to Locally Designated Official (LDO) Triage Process by LDO and Investigations Work Group (Two pronged test—“If True” & Sufficient Basis) Investigation within natural jurisdiction OR Referral to Management* Communications, Coordination & Monitoring by LDO Reporting to Management, IGA source & others as appropriate * If the two criteria are not met— “If True” test and “Probable Cause” Standard Allegations should be reported to the LDO, who will triage them with the assistance of the local Investigations Work Group (I-Group). December 2011 UC Whistleblower Program

13 Locally Designated Officials Local Investigative Bodies
Berkeley – Linda Williams Davis – Wendi Delmendo Irvine – Mike Arias Merced – Janet Young Los Angeles – Bill Cormier Riverside – William Kidder San Diego – Gary Matthews San Francisco – Elizabeth Boyd Santa Barbara – Ronald Cortez Santa Cruz – Alison Galloway Office of the President – Dan Dooley Agriculture & Natural Resources – Jake McGuire Berkeley National Lab – Jim Krupnick Local Investigative Bodies Academic Personnel Animal Research Office Disability Coordinator Environmental Health & Safety Health Sciences Compliance Officers Human Resources Labor Relations Employee Relations EEO/AA Officer Risk Management Student Judicial Affairs Institutional Review Board Internal Audit Management/Ad Hoc External Medical Staff NCAA Compliance Officer Office of the General Counsel Privilege & Tenure Committee Research Administration Retaliation Complaint Officer Title IX Officer University Police Investigations Work Group December 2011 UC Whistleblower Program

14 UC Whistleblower Program
Reporting Criteria Results from significant control or policy deficiency Likely to receive media or other public attention Involves misuse of University resources or creates exposure or liability in potentially significant amounts Significant possibility of resulting from a criminal act Involves significant threat to health or safety of employees and/or the public Judged significant or sensitive for other reasons How to decide whether or not to report an allegation upwards? If the incident is a result of a significant deficiency in either policy or controls that’s likely to exist elsewhere on the campus or system-wide If there’s likely to be media or public attention, including attention by funding or governmental agencies If the potential monetary exposure is greater than $25,000 it must be reported to the EVP at UCOP (No threshold for internal reporting; >=$25,000 for reporting to OP/System-wide LDO) If it likely involves a criminal act – OGC & campus police would need to be involved If it likely involves a significant health or safety threat If it’s significant or sensitive for any other reason December 2011 UC Whistleblower Program

15 UC Whistleblower Program
Guidance Allegations – not just findings – are reportable. Sensitivity and Media Attention override dollar impact. Regents Audit Committee’s expectation: “No Surprises.” Materiality Counts: balance bias towards disclosure against referrals to LDO for a missing “quart of strawberry ice cream.” Remember that matters reported externally trigger internal reporting. Don’t wait to come to a finding. If the potential for monetary loss or sensitivity is high, report the allegation immediately. Many times it’s not about money & the exact dollar amount is rarely known at the beginning. Our policy consciously dropped the concept of 30 days for preliminary review found in previous policy. Sensitivity and Media Impact - (which is frequently not measurable at the outset); often the matter really isn’t about money Reporting - (e.g. reporting to funding or regulatory agency triggers EVP reporting.) December 2011 UC Whistleblower Program

16 When Confronted with Whistleblower Allegations
Dos Learn UC Policy reporting channels Locally Designated Official Internal Audit Director Human Resources Director Be alert to informal communications of allegations (protected disclosures) Contact Internal Audit and Human Resources before taking any personnel action Act with speed and Hold the matter confidential We’re going to cover some dos & don’ts, in the event you’re confronted with a whistleblower’s allegation. First, be sure you know UC Policy & the reporting channels. Be familiar with your LDO, Internal Audit services department & a Human Resources contact, especially in the event of discrimination/sexual harassment & workplace misconduct charges. Be aware that employees may communicate issues to you informally, as side conversations, for example. That’s still a protected disclosure. Before you take any personnel action, contact Internal Audit & Human Resources. How you behave can dramatically impact the university’s ability to investigate or to obtain restitution. Don’t waste time. The longer you wait, the harder it will be to investigate properly. Hold the matter in strict confidence. You don’t want to jeopardize the investigation in any way. December 2011 UC Whistleblower Program

17 When Confronted with Whistleblower Allegations
Don’ts Dismiss the matter out of hand Launch your own investigation Confront the accused or otherwise tip them off Disclose the matter to any unnecessary parties Try to settle or resolve the matter yourself Now for the Don’ts. Don’t dismiss or ignore an allegation. On the other hand, don’t start up an investigation – leave it to the experts. If you confront or otherwise tip off the accused, or even disclose the matter to anyone other than those with a need to know, you’ll almost certainly ensure that the university loses – money, if it’s about theft, or reputation. You may trigger a drawn-out legal battle. Never try to settle or resolve the matter yourself. It’s unlikely that you know all of the legal ramifications. December 2011 UC Whistleblower Program

18 Whistleblower Program Website
This is our system-wide whistleblower website: ucwhistleblower.ucop.edu. Here you’ll find the anonymous hotline number, a link to the poster, polices, FAQs, training materials & local campus resources, including the names & mailto links for all of the LDOs. December 2011 UC Whistleblower Program

19 UC Whistleblower Program
Case Study A large University department has a small unit that operates fairly autonomously & with very limited oversight. This unit is involved in procuring services from outside vendors and re-charging various University organizations. We’re going to test your understanding of the Whistleblower Program with a Case Study of a incident similar to one you might uncover as a manager. Tell the story. December 2011 UC Whistleblower Program

20 UC Whistleblower Program
Background A temporary employee was assigned to assist with a backlog problem. This employee reported to her supervisor that a substantial amount of expenses had not been re-charged. Senior department management became suspicious at this report and noticed that none of the bills for a particular vendor had been re-charged in over a year. Tell the story. December 2011 UC Whistleblower Program

21 UC Whistleblower Program
Decision Point 1) Has a protected disclosure been made? 2) Does this matter meet the criteria for reporting to the LDO or another appropriate office? Has a protected disclosure been made? Yes – it meets the definition of a good faith communication of information that may evidence an improper act & was made for the purpose of remedying the situation. At this point we can’t tell if there was an improper act or not. There could be legitimate reasons for this particular vendor’s bills not to have been recharged for the year. Does the matter meet the criteria for reporting to the LDO? This is a judgment call & may depend on the customs on your campus. At this point you don’t have a lot of information, so you may want to do a little research before reporting it. You could also go directly to Internal Audit for help with the research. Since the dollar amount of the potential loss is so great, the cautious approach would be to contact IA immediately. December 2011 UC Whistleblower Program

22 UC Whistleblower Program
Inquiry The senior department manager called the phone number listed on the invoices and got an answering machine. The call was not returned. Tell the story. December 2011 UC Whistleblower Program

23 UC Whistleblower Program
Drive By The manager drove by the address on the invoice and found that it was a UPS mail box store. Tell the story. December 2011 UC Whistleblower Program

24 UC Whistleblower Program
Research The manager called the Better Business Bureau and conducted a Dun & Bradstreet search without finding any information on the business. Tell the story. December 2011 UC Whistleblower Program

25 UC Whistleblower Program
Amount at Risk The manager’s research found that the University had paid this vendor in excess of $250,000 over several years. Tell the story. December 2011 UC Whistleblower Program

26 UC Whistleblower Program
Considerations 1) Did the manager go too far? 2) Is this matter now reportable to the LDO or another appropriate office? 3) What should the manager’s next steps be? Did the manager go too far? Yes – ask yourself a few questions, first. Is this part of my normal duties? (Which of these actions was appropriate exercise of normal duties?) Will what I’m doing draw attention to the issue? (Which of these actions could have drawn attention to the issue?) Have I begun an investigation? (Which actions were investigatory in nature?) Is the matter reportable? Yes, definitely What should the manager’s next steps be? Report to the LDO, as the dollar amount is quite high & needs to be reported to the EVP at UCOP. December 2011 UC Whistleblower Program

27 UC Whistleblower Program
Action Plan With this information, the senior manager and another department supervisor confronted the employee on a Friday afternoon about the vendor and the failure to re-charge for their services. The employee was perceived as being evasive but did not admit to any wrongdoing. She was told to be available on Monday to go over in detail the operation of her unit. Tell the story. December 2011 UC Whistleblower Program

28 UC Whistleblower Program
Reflection 1) Should the manager and the supervisor have confronted the employee with questions about the vendor and the failure to re-charge for the billed expenses? 2) Is this matter now reportable to the LDO or another appropriate office? Should the manager have confronted? No, especially not just before the weekend. Is the matter reportable? Yes & time is of the essence. December 2011 UC Whistleblower Program

29 UC Whistleblower Program
Outcomes On Monday, the department found that all of the records in the unit had been removed over the weekend and information had been deleted from the employee’s computer. The employee had left a message saying that she could be contacted through her attorney. Then they called Internal Audit. Tell the story & then tell the real story. December 2011 UC Whistleblower Program

30 UC Whistleblower Program
Resources The Education & Training Page of the Ethics, Compliance & Audit Services site includes case studies, slideshows & videos, under the Whistleblower Training section. Use the resources in your staff meetings to raise awareness about the whistleblower program & our affirmative duty to report suspected misconduct. December 2011 UC Whistleblower Program

31 Whistleblower Coordinator/Investigators
UCB: Allan Kolling (510) UCD: Bruce Hupe (530) UCI: Kathie Allen (949) UCLA: Chris Norlin (310) UCR: Elaine Winn (951) UCSD: Christa Perkins (858) UCSF: Randy Otsuki (415) UCSB: John Kushwara (805) UCSC: Rita Walker (831) LBNL: Meredith Montgomery (510)   ANR: Claudine Kent (530) UCOP: Irene Levintov (510) Judith Rosenberg (510) December 2011 UC Whistleblower Program


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