RCW 43.09.185 states, “State agencies and local governments shall immediately report to the State Auditor’s Office (SAO) known or suspected loss of public funds or assets or other illegal activity.”
University employees are required, by policy, to make the following notifications in the event of loss of state resources.
BPPM 30.12 states, “University employees are responsible for notifying the Internal Audit Office of any loss of equipment, loss or shortage of a till or petty cash fund.”
BPPM 30.50 states, “Report the loss to the Controller’s Office and the Internal Auditor. Notify local police if theft is suspected. All suspected thefts are to be treated confidentially since an investigation may be ongoing.”
BPPM 30.51 states, “Report the loss to the Controller’s Office and the Internal Auditor. Also notify WSU Police if theft is suspected.”
In all cases above, it is recommended the department supervisor is notified before the report is made to Internal Audit.
Generally, losses of public funds or resources within the noted statute fall into one of the following categories:
- The loss of all, or a portion of, a till or petty cash fund, or a significant shortage in a deposit (this does not include everyday shortage/overage of till amounts attributed to normal business transactions)
- A break-in or theft situation where there is obviously a need for law enforcement involvement
- A material loss of funds found during an audit, or found by unit personnel and reported to Internal Audit (IA)
In all cases, when IA receives the report of loss, we submit the report to the SAO as required under noted statute. However, how and when that notification takes place depends upon the circumstances. In all cases, we advise department personnel to notify the Controller’s Office if they have not already done so. If the situation involves a break-in or theft, we advise department personnel to immediately notify campus or local police if they have not already done so. We ask department personnel to report to us what actions the police have taken and, we may also ask for the police report.
If the loss is a loss of all or part of a till or petty cash fund or a significant deposit shortage, we obtain all of the particulars on when, how much, who discovered the loss, and any corrective action taken by unit personnel. If our initial inquiry indicates no apparent fraud, no major breakdowns of internal controls, no major procedural problems, and we are satisfied there has been no misappropriation, we document our findings through a memo to the department, and a copy to the Controller. We notify the SAO of a loss of state funds and provide the details of our review and conclusions, and state that we intend no further action.
If our preliminary review indicates a lack of internal controls, poor cash handling practices, etc., we conduct an audit or investigation to determine the magnitude of the conditions. We then notify the SAO of a loss of state funds (copy to the Assistant Attorney General and the Controller), report the results of the audit and the corrective action taken. If we are satisfied that the situation has been adequately addressed, we advise the SAO that we intend no further action.
If our preliminary review indicates an obvious fraud or misappropriation of funds, we immediately notify the SAO (copy to the Assistant Attorney General and Controller). We assume that when a situation reaches this point there is a preponderance of conclusive evidence that a fraud occurred and it is the prerogative of the SAO to initiate an audit or investigation. As we reach this conclusion, we interact with the department, the Assistant Attorney General, Controller and Human Resource Services to make certain the appropriate action can be taken by those offices to address personnel issues.
For questions or more information, contact Internal Audit at ia.central@wsu.edu.
