Fraud_Policy_Template-Word PDF 2

COMPANY LOGO HERE

SAMPLE FRAUD POLICY

Template

PROCEDURE NAME: Fraud Prevention and Awareness

APPLIES TO/SCOPE: AR, AP, Payroll, Treasury, CFO,

Board of Directors

SUPERSEDES: N/A

APPROVAL: Executive Team

NEXT REVIEW DATE: January 1, 2021

PROCEDURE #: FRAUD #1

PROCEDURE OWNER: Treasurer

CREATION DATE: January 1, 2020

EFFECTIVE DATE: January 1, 2020

RELATED PROCEDURE: SOX Controls

FRAUD POLICY

CONTENTS

1.0 PURPOSE

2.0 POLICY

3.0 DEFINITIONS

4.0 RESPONSIBILITIES

5.0 PROCEDURES

6.0 EXCEPTIONS

7.0 RELATED REGULATORY REQUIREMENTS

8.0 RELATED FORMS

FRAUD POLICY

COMPANY LOGO HERE

INTRODUCTION

Payments fraud continues to be a critical threat to treasury functions of all sizes and

industries. The following template can be used to help treasury implement a thorough and

effective fraud policy. It was supplied to AFP by a treasurer for a real, multinational

organization.

PURPOSE

FRAUD POLICY

Fraud can have a devastating effect on our company because it could result in

significant financial loss and other long-term business repercussions. Any

allegations of fraud will be taken seriously, with no exceptions. All individuals,

regardless of position, title, or tenure with the company are expected to remain

vigilant and report any suspicious activity to the compliance hotline.

These procedures promote a culture founded on fraud prevention, awareness, and

accountability, and clarify acts that are considered to be suspicious. They support

a culture of operating within a comprehensive framework of internal controls,

complete with documented and formalized policies, procedures, processes, and

other supporting safeguards as needed. The procedures provide guidance to

prevent, detect, report, and investigate when fraudulent acts are suspected and

subsequently proven.

02 POLICY

The company upholds a zero-tolerance approach regarding fraud and corruption.

The company will identify and promptly investigate any suspected fraudulent or

related dishonest activity against the company or other parties with whom the

organization has dealings. The company will take appropriate disciplinary and

legal actions to include the possibility of termination of employment, restitution,

and forwarding information to the appropriate authorities for prosecution.

DEFINITIONS

FRAUD POLICY

3.1 Fraud is any intentional act or omission designed to deceive others,

resulting in the victim suffering a loss and/or the perpetrator

achieving a gain. Dishonest or fraudulent activities include, but are

not limited to, the following:

3.1.1 Forgery or alteration of documents (checks, bank draft, time

sheets, invoices, agreements, etc.) or bank accounts belonging

to the company or its subsidiaries.

3.1.2 Misrepresentation of information on documents.

3.1.3 Misappropriation of funds, supplies, or assets.

3.1.4 Theft, disappearance, or destruction of assets.

3.1.5 Improprieties in the handling or reporting of money or financial

transactions.

3.1.6 Authorizing or receiving payments for goods not received or

services not performed.

3.1.7 Authorizing or receiving payment for hours not worked.

3.1.8 Inappropriate use of the company’s records and disclosing

confidential and proprietary information to outside parties.

3.2 Corruption is defined as the offering, giving, soliciting, or

acceptance of an inducement or reward that may improperly

influence the action of a person or entity. Some examples of

corruption include:

3.2.1 Bribery

3.2.2 Conspiracy

3.2.3 Extortion

3.3 Management: For purposes of these procedures, management

refers to the President, Vice Presidents, Directors, Managers,

Supervisors, or other individuals who manage or supervise funds or

other resources, including human resources

RESPONSIBILITIES

FRAUD POLICY

4.1. Management is responsible for the detection and prevention of

fraud and misappropriation. Each member of management should

be familiar with the types of improprieties that might occur within

their area of responsibility and be alert for any indication of

irregularity.

4.2. Management is responsible to report any potential instance of fraud

or corruption to the Compliance Department, immediately. If the

Compliance Department is suspected in the fraud, the notification

must then be escalated to the VP of Finance and Operations, EVP

of Administration, or the President/CEO.

4.3. Management is responsible for taking appropriate corrective

actions to ensure adequate controls exist to prevent the

reoccurrence of improper actions.

4.4. All employees and the Board of Directors must report concerns

they have or information provided to them about the possible

fraudulent or corrupt activity of any employee, Board member,

contractor, vendor, or any other party with an association with The

Company International. Any person who has a reasonable basis for

believing fraudulent or corrupt acts have occurred has a

responsibility to report the suspected act immediately.

4.5. The Compliance Department is responsible for the administration,

revision, interpretation, and application of this policy. The policy will

be reviewed annually and revised as necessary.

4.6. The Compliance Department is also responsible to act as the lead

during the investigation process in determining if fraudulent activity

has taken place and to the lead the review process.

PROCEDURES

FRAUD POLICY

5.1. PREVENTING FRAUD AND CORRUPTION

5.1.1. The company has established internal controls, policies, and

procedures to deter, prevent, and detect fraud and corruption.

5.1.2. New employees and contractors will be subject to background

investigations, including a criminal background check. If a

criminal background check facility is not available, a police

clearance must be obtained. The Company will also verify all

applicants’ employment history, education, and personal

references prior to making an offer of employment.

5.1.3. Vendors, contractors, and suppliers must be active, in good

standing, and authorized to transact business in their country.

Vendors, contractors, and suppliers are subject to screening,

including verification of the individual’s or company’s status as

a suspended or debarred party.

5.1.4. Contractual agreements with the Company will contain a

provision prohibiting fraudulent or corruptive acts and will

include information about reporting fraud and corruption.

5.1.5. The Company employees will receive fraud and corruption

awareness training. New hires will receive the training as part of

their orientation at the commencement of employment and will

sign a statement acknowledging that they have received and

read the Sample Fraud Policy. All employees will receive fraud

and corruption awareness training every three years.

5.2. REPORTING FRAUD AND CORRUPTION

5.2.1. Any person who has a reasonable basis for believing fraudulent

or corrupt acts have occurred has a responsibility to report the

suspected act to the Compliance Department, immediately.

Failure to report suspected fraudulent or corrupt activity in a

timely manner according to the procedures below will also be

subject to disciplinary action. The procedures for doing so

anonymously are laid out in the Whistleblower Policy.

Alternatively, staff members can report suspected fraudulent or

corrupt acts as stated below. In all instances, the suspected

fraudulent activity must be escalated to the Director of

Compliance. No other actions are to be taken until the

Compliance department is aware of the suspicious activity.

5.2.1.1. Headquarters Staff - should report to their respective

National Director and/or Regional Director, who will

report to the Director of Compliance.

PROCEDURES

FRAUD POLICY

5.2.1.2. Regional Office Staff - should report to their respective

Regional Vice President, who will report to the Director of

Compliance.

5.2.1.3. International Office Staff - should report to their

respective head of department and/or Vice President and

the Director of Compliance.

5.2.1.4. Any suspected act involving a National or Regional

Director, International head of department, or Vice

President should be reported directly to the Director of

Compliance.

5.2.1.5. Any suspected act involving the President/Board of

Directors should be reported to the Audit Committee of

the Board of Directors via the Director of Compliance.

5.2.1.6. National and Regional Directors, International Office

heads of departments, Vice Presidents, and the President

must inform the Director of Compliance of all suspected

fraudulent acts reported to them via means other than

the official Whistleblower hotline or website within five

days that they become aware that such acts have been

committed. If the fraudulent act includes grant funds the

Director of Grants Compliance must also be informed.

5.2.2. The reporting employee shall refrain from further investigation of

the incident, confrontation of the alleged violator, or further

discussion of the incident with any other party unless requested to

do so by their respective Vice President, the Compliance

Department, The Company International’s legal counsel, and/or law

enforcement.

5.2.3. Retaliation and retribution will not be tolerated against any

employee or Board member who reports suspected fraudulent or

corrupt activities. However, if an employee is determined to have

acted maliciously or with deceit, the employee is subject to

disciplinary action.

5.3. INVESTIGATION

5.3.1. The Compliance Department has the responsibility to ensure

that all suspected fraudulent acts are properly screened and

investigated.

5.3.2. The investigating team or individual will have:

5.3.2.1. Free and unrestricted access to all the company records

and premises, whether owned or rented; and

PROCEDURES

FRAUD POLICY

5.3.2.2. The authority to examine, copy, and/or remove all or any

portion of the contents of files, desks, cabinets, and other

storage facilities on the premises without prior knowledge

or consent of any individual who may use or have custody

of any such items or facilities when it is within the scope of

their investigation.

5.3.3. If a fraudulent act involves an employee, the investigating team

or individual will determine when to notify the employee and

whether to recommend that the employee be suspended or

temporarily reassigned.

5.3.4. All reports of suspected fraudulent acts will be taken seriously

and the investigation team or individual will make decisions

based on the nature and seriousness of the allegation and facts

of each case, whether to consult with legal counsel or to utilize

outside resources to further the investigation.

5.3.5. Investigation results will not be disclosed or discussed with

anyone other than those who have a legitimate need to know.

5.3.6. If the investigation substantiates that fraudulent activities have

occurred, the investigating team or individual will issue an

investigation report to the respective Vice President, the

Director of Compliance, and other appropriate personnel. If

appropriate, the Director of Compliance will report to the Board

of Directors through the Audit Committee.

5.4. CORRECTIVE ACTION

5.4.1. Depending on the seriousness of the offense and the facts of

each case, actions against an employee can range from written

notification and a probationary period, up to and including

dismissal where appropriate, to legal action, either civil or

criminal. In cases involving monetary losses the company will

pursue recovery of losses.

5.4.2. Individuals at all levels of the Organization will be treated equally

regardless of their position, years of service, or affiliation with

the company.

5.4.3. Specific Actions:

5.4.3.1. Decisions to prosecute or refer investigation results to the

appropriate law enforcement and/or regulatory agency for

independent investigation will be made in consultation

with legal counsel and the respective Vice President

and/or tPresident.

PROCEDURES

FRAUD POLICY

5.4.3.2. If an investigation results in a recommendation to

terminate an employee, the recommendation will be

reviewed for approval by the respective human resources

personnel, the employees’ supervisor, the respective Vice

President, and if necessary, by legal counsel before any

such action is taken.

5.4.4. Final determination regarding actions against an individual or

business found to have committed fraud or corruption will be

made by the respective Vice President, President, or Audit

Committee, depending on the details of the matter.

EXCEPTIONS

FRAUD POLICY

POLICY

6.1 None

07 RELATED REGULATORY

REQUIREMENTS

7.1 U.S. Foreign Corrupt Practices Act and others

FRAUD POLICY

08 RELATED FORMS

8.1 Sample Fraud Policy Acknowledgement

The Company

Sample Fraud Policy

Acknowledgment

My signature acknowledges that I have read the Sample Fraud

Policy and that I understand my responsibilities related to the

prevention, detection and reporting of suspected fraudulent

activities.

Signature: ________________________________

Print Name: _______________________________

Date Signed: _______________________________

Note: Please retain in employee’s personnel file.

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ABOUT COMPANY

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