UM system creates fraud reporting system

By Michelle Hagopian

Published Jan. 25, 2008

The UM system has created a new way for system employees to report fiscal misconduct and fraud.

Global Compliance, a company based in Charlotte, N.C., provides the Web- and telephone-based system. An employee at any of the UM system's four campuses can use the new system, said Nikki Krawitz, the system's vice president for finance and administration. She said the reporting system has been operative since mid-December and has functioned as expected.

According to a letter from Interim UM system President Gordon Lamb to UM employees, MU implemented the system in compliance with The American Institute of Certified Public Accountants and other auditors' recommendations for a confidential reporting system.

The UM system paid Global Compliance $9,935 for its service in 2007 and will pay $6,800 each successive year, according to a UM system news release.

The fiscal misconduct reporting line is an addition to the other ways to report fraud at MU and is not meant to replace any specific method, the news release stated.

"Employees are encouraged to talk with their supervisor first when they suspect fiscal misconduct," Krawitz said.

However, UM system employees who are uncomfortable reporting misconduct through administrative channels may remain anonymous when reporting to the system.

"Individuals trying to help can remain anonymous to ensure local politics don't interfere in the workplace," Student Affairs Fiscal Officer Rich Anderson said.

Employees who call the reporting line speak with members of the staff who have been trained to interview callers. After a report is submitted, it is processed by Global Compliance and sent to university management for investigation.

Individuals can track their report through the system, Krawitz said.

In instances where an investigation reveals fraud or theft, higher authorities could intervene.

"The severity of the allegation determines who becomes involved in the situation," Krawitz said.

According to the release, fiscal misconduct could be a violation of university policy on reporting financial statements, acceptance gifts or bribes, theft, misuse of funds or unauthorized alteration or destruction of financial documents.

MU employees have faced consequences for such violations in the past. In December 2005, Robert Osman, former assistant director for the Recreation Services and Facilities Department, was arrested on suspicion of using a university procurement card for personal purchases.

Osman pleaded guilty to the charges in March 2007. According to records, he purchased a big-screen television, a custom shower door and a shower base. He worked with the recreation department for seven years before he was charged with the crime, the article stated.

Osman is currently serving five years probation.

Officials hope the system would help detect cases of fraud long before they would be revealed through internal auditing.

"Often, those involved in these cases believe they won't be caught stealing," Anderson said. "This reporting line gives us another outlet for discovering fraud quickly."