Online Form Enables Anonymous Fraud Tips
Northern has an online mechanism for employees to remain anonymous while reporting potential violations of the university’s fraud policy. The action conforms to one of the “best practices” recommendations developed by the National Association of College and University Business Officers (NACUBO) in response to the Sarbanes-Oxley Act, which was signed into law in 2002.
The act generally applies to publicly held companies and their audit firms. While its official reach does not yet extend to nonprofits, Matt Riipi (Auditor) said the law does set new standards for accountability, which some recommend that higher education should adopt.
“The public accountants who audit the university’s financial statements each year suggested we follow the NACUBO recommendations and set up an e-mail or hotline,” Riipi said. “We didn’t pursue it because employees weren’t reporting questionable activity. In my experience at Northern, there has always been a positive environment and employees seem to be conscientious about reporting issues that they feel are inappropriate. We just wanted to give individuals the option of maintaining their confidentiality during the process, as suggested in the NACUBO best practices.”
The NMU fraud policy was approved in July 2004. It pertains to misappropriation of assets, corruption, fraudulent financial reporting and other relevant activity.
“The university has always taken seriously any allegations of fraud or wrongdoing and investigated them fully,” Riipi added. “It doesn’t have to be a pattern of activity; a single incident can be grounds for investigation. Violations can result in disciplinary action including termination and criminal prosecution.”
The policy states that suspected fraud should be reported to Public Safety and Police Services, the Internal Auditor or Human Resources – the same three entities that collaborate on the investigations. It also includes “whistleblower” protection that prevents employees from being unfairly disciplined for filing a complaint of alleged wrongdoing. Riipi said the anonymous online form should further alleviate any concerns of employees who suspect fraudulent activity, but might have been reluctant to report it.
The complete policy is available at Fraud.