Preventing Fraud, Waste, and Abuse
Who Completes This Task: All Staff Who Deal With Funding
Fraud, waste and abuse take away funding from a project, and increase the chance that a grant will be decreased or terminated prematurely. Misuse of funds can result in SPPS having to pay back some of the grant. Everyone who deals with funding is responsible for helping combat fraud.
Following all district procedures is your best insurance against waste, fraud, and abuse of funds. There are systems in place to catch anomalies in the use of district funds including segregation of duties, invoice requirements, and approval procedures.
The use of grant funding for a purpose other than intended.
- Charging personal expenses as business expenses against a grant
- Charging for costs which have not been incurred or are not attributable to a grant
- Charging for inflated labor costs or hours against a grant
The failure to receive a grant’s full value due to poor planning or grants management controls. Waste is squandering money or resources, even if not explicitly illegal.
- Improper grant payments
- Buying overpriced office equipment from a favored vendor
- Buying unnecessary equipment for personal use or gain
- Lack of controls in the payment process
- Poor financial management of grants
Behaving improperly or unreasonably or misusing one’s position or authority.
- Using an SPPS computer to download explicit material
- Writing technical specification or contract terms to favor a specific contractor
- Buying iPods for official data storage
Creating a substantial risk to an agency’s ability to accomplish its mission.
- Continuing to pay utility bills for formerly leased office space
- Renewing a technical support contract for software the district no longer uses
- Stockpiling supplies and equipment beyond its shelf-life
Steps - Fraud Prevention for Administrators
How grant managers can prevent fraud:
- Follow SPPS internal control procedures
- Purchasing and handling money
- Allowability of expenses
- Property control
- Information and data security
- Grant monitoring
- Be mindful of budget and timelines
- Review documents thoroughly, watching for anomalies
- Inflated invoices
- Payments to unknown vendors for unknown services
- Invoices for services or equipment not provided
- Administrator cuts a check and asks for a portion of proceeds
- Consulting contracts - not enough detail to verify costs
- Question documents and verify authenticity
- Request additional information for the vendors or administration
- Compare information on different documents
Steps - Systemic Prevention
- Does the record-keeping system make it possible to quickly and accurately answer questions from auditors and funding agencies?
- Are any identified shortcomings of internal controls recurring?
- Are there new procedures in place that would prevent losses from recurring?
- What functions are under-staffed or over-burdened?
- Does this create vulnerabilities?
- Have the internal controls been subjected to a third-party review?
- What losses have been previously experienced?
- What was the nature of those losses?
- Data corruption
- Unallowable expenditures
See individual procedures for required documentation.
Most of the procedures in this manual function as internal controls and serve to prevent fraud.