R467RESOLUTION NO. 467
A RESOLUTION ADOPTING AN AMENDED CITY OF KENNEDALE
FRAUD POLICY
WHEREAS, on January 13, 2005, City Council adopted the document entitled, "Fraud
Policy," a framework in which the aim is to safeguard the reputation and financial viability of the
City of Kennedale through improved management of fraud risk; and
WHEREAS, a fraud policy is established to facilitate the development of controls that
will aid in the prevention, deterrence and detection of fraud against City of Kennedale. It is the
intent of City of Kennedale to promote consistent organizational behavior by providing
guidelines and assigning responsibility of the development of controls and conduct of
investigations; and
WHEREAS, the City Council has reviewed the City's Fraud Policy.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF KENNEDALE, TEXAS:
The City Council of the City of Kennedale, Texas hereby approves the amended Fraud Policy
dated October 19, 2015, attached hereto as "Exhibit A."
PASSED, ADOPTED AND APPROVED by the City Council of the City of Kennedale,
Texas, this the 19th day of October, 2015.
APPROVED:
ayor, Bri hn Johnson
ATTEST:
City Secretary, Leslie Gal ; way
o 0�%IIIIJ/1 0
`���1 OF �� 16,
o
s
i
®� M
y2 . ..
o,��s'o IN i; �1e�- 1,��,0
CITY OF KENNEDALE
FRAUD POLICY
ORIGINALLY ADOPTED BY CITY COUNCIL: JANUARY 13, 2005
PREFACE
The aim of the Fraud Policy is to safeguard the reputation and financial viability of the City of
Kennedale through improved management of fraud risk.
The fraud policy is established to facilitate the development of controls that will aid in the prevention,
deterrence and detection of fraud against City of Kennedale. It is the intent of City of Kennedale to
promote consistent organizational behavior by providing guidelines and assigning responsibility of the
development of controls and conduct of investigations.
It is our intent to bring forth this policy to Council for review at least annually. In order to demonstrate
that review, it will be custom practice for the governing board of a municipality to adopt a resolution
to make the review an official public record.
SUBSEQUENT REVIEW & ADOPTION
DECEMBER 11, 2008
NOVEMBER 5, 2009
OCTOBER 14, 2010
OCTOBER 13, 2011
OCTOBER 3, 2012
OCTOBER 1, 2013
OCTOBER 13, 2014
OCTOBER 19, 2015
2
1. BACKGROUND
The City of Kennedale fraud policy is established to facilitate the development of controls that
will aid in the detection, deterrence and prevention of fraud against City of Kennedale. It is the
intent of City of Kennedale to promote consistent organizational behavior by providing
guidelines and assigning responsibility of the development of controls and conduct of
investigations.
II. SCOPE OF POLICY
This policy applies to any irregularity, or suspected irregularity, involving employees as well as
consultants, vendors, contractors, outside agencies doing business with employees of such
agencies, and /or any other parties with a business relationship with City of Kennedale.
Any investigative activity required will be conducted with regard to the suspected wrongdoer's
length of service, position /title, or relationship to the City of Kennedale.
III. POLICY
Management is responsible for the detection and prevention of fraud, misappropriations, and
other irregularities. Fraud is defined as the intentional, false representation or concealment of a
material fact for the purpose of inducing another to act upon it to his or her inquiry. Each
member of the management team will be familiar with the types of improprieties that might
occur within his or her area of responsibility, and be alert for any indication of irregularity.
Any irregularity that is detected or suspected must be confidentially reported immediately to
the City Manager, who coordinates all investigations with the legal counsel and other affected
areas both internal and external.
IV. ACTIONS CONSTITUTING FRAUD
The terms defalcation, misappropriation, and other fiscal irregularities refer to, but are not
limited to:
A. Any dishonest or fraudulent act;
B. Misappropriation of funds, securities, supplies, or other assets;
C. Impropriety in the handling or reporting of money or financial transactions;
D. Profiteering as a result of insider knowledge of City activities;
E. Disclosing confidential and proprietary information to outside parties;
Cl
F. Disclosing to other persons activities engaged in contemplated by the City of Kennedale;
G. Accepting or seeking anything of material value from contractors, vendors, or persons
providing services /materials to the City of Kennedale. Exception: Gifts less than $25 in
value;
H. Destruction, removal, or inappropriate use of records, furniture, fixtures, and equipment;
and /or
I. Any similar or related irregularity.
V. OTHER IRREGULARITIES
Irregularities concerning an employee's moral, ethical, or behavioral conduct should be
resolved by departmental management and Human Resources.
If there is any question as to whether an action constitutes fraud, contact the appropriate
department head for guidance.
VI. INVESTIGATION RESPONSIBLITIES
City Manager has the primary responsibility for the investigation of all suspected fraudulent
acts as defined in the policy. Should an investigation substantiates that fraudulent activities
have occurred, the City Manager will issue reports to appropriate designated personnel, and if
appropriate, to the City Council.
Decisions to prosecute or refer the examination results to the appropriate law enforcement
and /or regulatory agencies for independent investigation will be made in conjunction with legal
counsel and senior management, as will final decisions on disposition of the case.
VII. CONFIDENTIALITY
All parties involved will treat all information received confidentially. Any employee who
suspects dishonest or fraudulent activity will notify the City Manager Office immediately, and
should not attempt to personally conduct investigations or interview /interrogations related
to any suspected fraudulent act (see REPORTING PROCEDURE section below).
Investigation results will not be disclosed or discussed with anyone other than those who have
a legitimate need to know. This is important in order to avoid damaging the reputations of
persons suspected but subsequently found innocent of wrongful conduct and to protect the
City of Kennedale from potential civil liability.
4
VIII. AUTHORIZATION FOR INVESTIGATING SUSPECTED FRAUD
All searches must be authorized in advance by the City Manager and conducted under the
direction of the Department Head and /or City Manager. The City Manager or designee will
have:
A. Free and unrestricted access to all City of Kennedale records and premises at any time,
whether owned or rented; and
B. The authority to conduct unannounced searches or inspections of the worksite, including,
but not limited to, City property used by employees such as lockers, file cabinets, desks,
vehicles and offices, whether secured, unsecured or secured by a lock provided by the
employee; and
C. If reasonable suspicion exists, the authority to conduct unannounced searches or inspection
of the employee's personal property located on City premises, included purses, lunch boxes,
brief cases and private vehicles or vehicles used to conduct City business located on City
property; and
D. Employees are not entitled to any expectation of privacy with respect to such or similar
items. Employee refusal to cooperate with a search will likely be subject to disciplinary
action, up to and including termination.
IX. REPORTING PROCEDURES
Great care must be taken in the investigation of suspected improprieties or irregularities so as
to avoid mistaken accusations or alerting suspected individuals that an investigation is under
way.
An employee who discovers or suspects fraudulent activity will contact his or her department
head immediately. The employee or other complainant may remain anonymous. All inquiries
concerning the activity under investigation from the suspected individual, his or her attorney or
representative, or any other inquirer should be directed to the City Manager or his designee or
the legal counsel. No information concerning the status of an investigation will be given out.
The proper response to any inquiries is: "I am not at liberty to discuss this matter." Under no
circumstances should any reference be made to "the allegation," "the crime," "the fraud,"
"the forgery," "the misappropriation" or any other specific reference.
The reporting individual should be informed of the following:
A. Do not contact the suspected individual in an effort to determine facts or demand
restitution.
5
B. Do not discuss the case, facts, suspicions, or allegations with anyone unless specifically
asked to do so by the legal counsel or the investigating agency.
X. TERMINATION
If an investigation results in a recommendation to terminate an individual, the
recommendation will be reviewed for approval by the designated representatives from Human
Resources and the legal counsel before any such action is taken. Should the employee believe
the management decision inappropriate for the facts presented, the facts will be presented to
executive level management for a decision through the appropriate appeals process in
personnel policy.
XI. ADMINSTRATION
City Management is responsible for the administration, revision, interpretation, and application
of this policy.
XII. ANNUAL REVIEW
The Director of Finance shall, at a minimum, submit proposed amendments of this policy to the
City Council annually.
L