Agenda Information Sheet
DEPARTMENT: Internal Audit
CM/ ACM: Mayor and Council
Date: May 2, 2017
SUBJECT
Title
Receive a report, hold a discussion and give staff direction establishing an anonymous reporting mechanism as that relates to the duties of the City Auditor.
Body
BACKGROUND
City Auditor broached the topic of an anonymous reporting mechanism to strengthen the City's antifraud program on March 28, 2017. At that time, the City Council instructed the City Auditor to bring this topic back as a Work Session item.
Currently, according to the Fraud Directive, employees who suspect fraud shall report it to their supervisor or can go outside the normal chain of command. That could include their department director, an Assistant City Manager, the City Manager or a member of the investigation committee.
Again, from the Fraud Directive, city employees who are contacted by citizens with evidence or written allegations of fraud shall immediately report it their department director, a member of the investigation committee, an Assistant City Manager or the City Manager.
According to the "Report to the Nations on Occupational Fraud and Abuse," put out by the Association of Certified Fraud Examiners, the most common detection method in their study was tips (39.1% of cases), but organizations that had reporting hotlines were much more likely to detect fraud through tips than organizations without hotlines (47.3% compared to 28.2%, respectively).
In a survey performed by the Association of Local Government Auditors when asked the question, "Do you have a fraud/waste/abuse hotline?" with 92 audit shops responding, 64% indicated "Yes." With 45 audit shops responding, 44% indicated the hotline was third party, staffed. The second highest response was 27% showing in house, dedicated staff.
If the City of Denton does not have an anonymous reporting mechanism we risk losing sources who are not comfortable revealing their identity.
OPTIONS
The optio...
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