05:09:00 Procedures for Reporting Missing Property

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Purpose

To establish procedures for reporting fiscal misconduct and losses of state or institutional funds or property.

Policy

I. Introduction

TBR Guideline B-080, Reporting and Resolution of Institutional Losses, requires each institution to establish a system to report fiscal misconduct and losses of state or institutional funds and property. Resources shall refer to personnel, equipment, and financial resources. Administrators at all levels of management should be aware of the risks and exposures inherent in their areas of responsibility and should establish internal controls to provide for the security and accountability of state resources.

The following procedures have been established for such reporting:

• The employee or department incurring a loss is responsible for notifying Campus Police as soon as property is determined to be missing.
• Campus Police must conduct an investigation and complete an Incident Report immediately upon notification of missing property.
• Campus Police will notify the Business office of the incident and secure relevant inventory information for completion of the incident report.
• Campus Police will make a determination as to whether missing property is to be entered in the National Crime Information Computer (NCIC) and will provide the local police department the proper reports and information to enter the missing property if warranted.
• Campus Police will provide copies of all reports and/or notify the vice president of Business & Finance and/or the president of any entries of missing property in the national crime database.
• Copies of the completed Incident Report should be submitted to the Business Office and Internal Audit.

II. Cash Shortages

For losses due to cash shortages, each institution is required to report cash shortages equal to or greater than $500 immediately to TBR and must follow-up with a Notification of Loss Report. Some cash shortages result from human error and are the cost associated with doing business. However, objective reviews must be completed to eliminate misconduct and provide assurance that controls are effective. Regardless of amount, if the shortage is a repeating event or if a pattern of financial shortfalls is identified in any area or unit, such should be specifically noted in the report. Furthermore, the investigation unit identified on the Notification of Loss Report must file a Case Resolution Report at the conclusion of the investigation. Both reports must be sent to TBR, Business Office, and Internal Audit. (An Internal Audit Report may be issued in lieu of a Case Resolution Report.

III. Fraud, Waste, and Abuse

Losses of institutional assets as the result of acknowledged or suspected misconduct by either an employee or a non-employee (e.g., a vendor, contractor, or student) may include, but are not limited to: shortages of cash; lost, stolen or altered checks; operational supplies; physical property; intellectual property; and any other instance where assets may have been misappropriated. Examples of where assets may have been misappropriated include, but are not limited to, travel claim abuse, long distance telephone abuse, theft of athletic tickets, reporting or approval of hours not worked, etc. TBR must be verbally notified of the incident followed by submission of the Notification of Loss Report.

Individuals involved with suspected fraud activity or misconduct must assist with and cooperate in any authorized investigation, including providing complete, factual responses to questions and either providing access to or turning over relevant documentation immediately upon request by any authorized person. Any person refusing to provide such assistance must be notified that such refusal may result in the imposition of discipline, up to and including termination. Failure to provide such notice will not preclude the institution from terminating the employee. The procedures outlined below should be followed:
 

1. Any employee who becomes aware of losses involving misconduct or suspected fraud must immediately report the incident to an appropriate department official. If the incident involves his/her immediate supervisor, the employee must report the incident to the next highest-level supervisor. Employees should not confront the individual being investigated or initiate an investigation on their own. Such actions could compromise the investigation. A department official who receives notice of suspected misconduct or fraudulent activity must immediately report the incident to the following:
    
   1. vice president for Business & Finance or his/her designee
       
   2. director of Internal Audit
       
   3. Campus Police Office (as deemed necessary)
       
2. The president will designate one of the above referenced officials to verbally notify TBR regarding the acknowledged or suspected fraud or misconduct.
    
3. Each institution must complete a Notification of Loss Report. This report must be sent to TBR and Internal Audit.
    
4. The investigating unit identified on the Notification of Loss Report will file a Case Resolution Report or Internal Audit Report at the conclusion of the investigation. The report will be issued to TBR, the vice president for Business & Finance, the Internal Audit Department, and the Campus Police Office (as deemed necessary).

IV. Physical Property (Inventory)

Losses of physical property from thefts, equipment inventory shrinkage, natural disasters, or acts of God should be reported to the TBR quarterly on the Property Loss Report form. Physical property includes those items that meet the definition of capital or sensitive minor equipment.

However, individual occurrences exceeding $25,000 and occurrences that are potentially serious situations that would create public concern regardless of amount must be reported to the TBR and the State of Tennessee Treasury Department, Office of Risk Management, immediately followed by a written report.

Details of the insurance claims process can be found on the Tennessee Department of Treasury website.

The Property Loss Report referenced above should list equipment items individually and should include all related data as reflected on the equipment inventory list. This information is forwarded to TBR on an Excel spreadsheet with a brief narrative explaining how the loss occurred. Each property damage report should include a detailed description of the loss and the estimated cost. These forms should be forwarded to:

• vice president for Business & Finance or his/her designee
• director of Internal Audit
• business office
• department where loss occurred

Copies of the above reports completed by Campus Police and others are to be reviewed by Accounting Services, the vice president for Business & Finance and the assistant vice president for Business & Finance. The Office of Business & Finance will forward copies of the missing property reports to the TBR and to Risk Management. Official copies of relevant missing property reports will be maintained in the Accounting Services office and in the Campus Police Department. The Accounting Services office and the vice president for Business & Finance will ensure that appropriate entries are made for the removal of equipment from the inventory database and the general ledger. Removal from inventory will be in accordance with TBR guidelines which currently state that property is to be removed at the time a loss was documented and recognized. 09/06; 07/12; 05/16