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Fraud and ethical lapses There’s no place for them
gets swindled, taxpayers pay the price. In my opinion, government fraud is a serious crime and should be pursued to the fullest extent of the law. In many government fraud cases, both criminal and civil charges are brought against the defendant. As Tomas Jefferson said, “When man assumes a public trust he should consider himself a public property.” In the past couple of years ethics violations, criminal investigations and criminal charges have become more common in Arkansas govern- ment – both at the state and local levels. Tis should not be! As elected officials and employees of government you are keepers of the public trust – a public trust created by a strict code of conduct that is a part of law. Since I have a county government background, most of what I say in this article is directed toward county officials and employees – but, in many cases would be applicable to other levels of government. Arkansas Code Annotated 14- 14-1202 establishes in law “ethics for county government officers and employees.” Te initial sentence of that law simply says, “Te holding of public office or employment is a public trust created by the confidence which the electorate reposes in the integrity of officers and employees of county government.” So, not only are county officials bound by an ethics code – but employees are, too. Tis law goes on to set forth the
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“Rules of Conduct” and establishes the procedure for removal from office or employment. In my opinion, the breach of this “public trust” by an elected official should cause an immediate rendering of a resignation. Tere is no place in government, at any level, for anything but the highest ethical standards, a strong work ethic, and a heart for service. Fraud Increases during an economic downturn One of the most recent reports released by the Association of Certi-
fied Fraud Examiners (ACFE) estimated that U.S. organizations lose 5% of their annual revenues to fraud. Workplace fraud schemes occur across all types of organizations including corporations, small businesses, not- for-profit organizations and government. I do not believe internal fraud or employee theft is widespread in
Arkansas county government – because I believe that for the most part county elected officials and county employees are people of integrity. However, sadly it is not uncommon anymore to read the morning paper or hear a news report concerning an elected official or employee who has been charged with some type of fraud crime. As a county constitutional officer, the last thing you want to have happen under your watch is theft of county funds. Some think, “It would not happen in our community.” Unfortunately, it happens. And,
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orking for the people is a public trust. Government fraud, in essence, refers to illegal acts that intentionally divest the government of funds through deception or scams. When the government
when it does occur, it can be traumatic for the community where it occurs. Terefore, to be proactive and prevent theft and fraud, it is important to have sound internal controls in place. In an economic downturn, studies
very job is a self portrait of the person who does it. Auto-
graph your work with excellence.
show that there is an increase in fraud. County officials play an important role in ensuring that proper internal control policies and procedures are developed and consistently implemented to protect tax dollars. You want to implement procedures that reduce the risk of theft and increase the chance of early detection. A county official that has no desire or sees no need in implementing proper internal control policies will bear watching. It is bad enough when an employee commits fraud – but when an elected official commits fraud it is the epitome of hypocrisy. A person who runs for office has actually asked the public to vote for them – to put their trust in them. You have both a moral and legal obligation to serve with integrity. Your constituents deserve officials they can trust and depend on to always do the right thing. Types of theft and what to watch Te most commonly reported of- fenses in the government and public administration sector, according to ACFE, were billing schemes, skim- ming, theft of non-cash assets, theft of cash on hand, procurement fraud,
Eddie A. Jones County Consultant
payroll fraud and expense reimbursement fraud. Sound familiar? • In billing schemes, the person causes the government to issue a payment by submitting invoices for fictitious goods or services, inflated invoices, or invoices for personal purchases. An example would include “phantom vendors” – where a person creates a shell company and bills the employer for nonexistent services. • “Skimming” involves taking cash before it is recorded on the books
and records. An example would be an official or employee accepting payment from a customer but not recording the payment and keeping the cash.
• “Theft of cash on hand” cases refer to taking cash kept at the gov- ernment office.
• “Theft of non-cash assets” include the taking or use of county prop-
erty for personal use. Tis would include taking office supplies, janito- rial supplies, equipment, postage, and the list goes on. If it is county property it is not the property of an official or employee for personal use or personal gain. • An example of “procurement fraud” is a company using bribes to win a contract even when it did not make the lowest or best bid. Or it could include billing the county for incomplete work, inflating the cost
COUNTY LINES, WINTER 2014 Seems To Me...
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