Developed by the City of Toronto
A fraud/dishonest activities policy sets out specific guidelines and responsibilities regarding appropriate actions that must be followed for investigation of dishonest activities such as fraud and other similar irregularities.
A fraud/dishonest activities policy is an important part of risk management and internal control. It ensures that the Board of Directors and all employees and agents of the corporation understand what the Board of Directors considers dishonest activity, what actions to take when inappropriate activity is suspected, and what the consequences will be for any member of the Board, staff or agent who engages in inappropriate activity.
The Board of Directors must establish a policy for the corporation that clearly communicates the behaviour expected of themselves, staff and agents when doing corporation business.
Creating and maintaining your fraud/dishonest activities policy
- Follow the steps below and tailor it to your organization’s needs.
- All members of the Board of Directors, staff, and agents of the corporation should review the policy annually, and make any necessary revisions. They should declare, in writing, that they have reviewed the policy.
- Ensure your policy includes the requirement to report fraud/dishonest activities to the City of Toronto and others as required, as explained below in the General Policy and Responsibilities section
- Ask to see written declarations that staff and agents have reviewed the corporation’s fraud/dishonest activities policy.
1) Create a goal for your policy
Example:
(Housing Provider) is committed to protecting its revenue, property, information and other assets from any attempt, either by members of the public, contractors, sub-contractors, agents, intermediaries or its own employees, to gain by deceit, financial or other benefits.
2) Define what is included in your definition of fraud
Example:
This policy sets out specific guidelines and responsibilities regarding appropriate actions that must be followed for investigation of fraud and other similar irregularities, in which definitions of fraud and other similar irregularities include, but are not limited to:
- Forgery or alteration of cheques, drafts, promissory notes and securities.
- Any misappropriation of funds, securities, supplies or any other asset.
- Any irregularity in the handling or reporting of money transactions.
- Misappropriation of furniture, fixtures and equipment.
- Seeking or accepting anything of material value from vendors, consultants or contractors doing business with the (housing provider) in violation of the Conflict of Interest City Guideline 2015-6, developed under the authority of the Housing Services Act, Regulation 367, Section 100.
- Unauthorized use or misuse of (housing provider) property, equipment, materials or records.
- Any computer-related activity involving the alterations, destruction, forgery, or manipulation of data for fraudulent purposes or misappropriation of (housing provider) – owned software.
- Any claim for reimbursement of expenses that are not made for the exclusive benefit of the (housing provider).
- Provision of an unauthorized benefit to a tenant including, but not limited to, an unauthorized reduction of the rent payable by a tenant, unauthorized internal transfers to another unit or unauthorized determination of eligibility for rent-geared-to-income assistance.
- Any similar or related irregularities.
3) Decide who this policy applies to
Example:
This policy applies to members of the Board of Directors, president, supervisors, employees and all staff of the (housing provider).
4) Where fraud is suspected, define the responsibilities and required actions of the Board of Directors, president, and all staff
Examples:
- It is the Board of Directors intent to fully investigate any suspected acts of fraud, misappropriation or other similar irregularity. An objective and impartial investigation will be conducted regardless of the position, title, length of service or relationship with the (housing provider) of any party who might be or becomes involved in or becomes/is the subject of such investigation. All directors, officers and employees of (the housing provider) will co-operate fully with the Board of Directors to ensure that any suspected acts of fraud, misappropriation or other similar irregularity are investigated to the satisfaction of the Board of Directors and City of Toronto’s Housing Stability Services Section.
- In all circumstances, where there are reasonable grounds to indicate that a fraud may have occurred, the Board of Directors, subject to the advice of its legal counsel, will contact its insurance company, the Toronto Police Service and the City of Toronto’s Housing Stability Services Section.
- Upon Conclusion of the investigation, the results will be reported to the President of the Board of Directors. The President will provide a copy of the results to the City of Toronto’s Housing Stability Services Section.
- The Board of Directors will pursue every reasonable effort, including court ordered restitution, to obtain recovery of the corporation’s losses from the offender, or other appropriate sources.
- Any employee who has knowledge of an occurrence of irregular conduct, or has reason to suspect that a fraud has occurred, shall immediately notify his/her supervisor. If the employee has reason to believe that the employee’s supervisor may be involved, the employee shall immediately notify the President of the Board of Directors. Employees shall not attempt to investigate a suspected fraud or discuss the matter with anyone other than a person to whom the fraud was reported, staff of the City of Toronto Housing Stability Services Section and the police. An allegation of fraud is a serious matter. Employees who knowingly make false allegations will be subject to discipline up to and including dismissal.
- Upon notification from an employee of suspected fraud, or if the supervisor has reason to suspect that a fraud has occurred, a supervisor shall immediately notify the President. The supervisor shall not attempt to investigate the suspected fraud or to discuss the matter with anyone other than the President, staff of the City of Toronto Housing Stability Services Section and the police.
- Upon notification from an employee of a suspected fraud, or if the President has reason to suspect that a fraud has occurred, the President shall immediately advise the Board of Directors and the City of Toronto Housing Stability Services Section. The President shall not attempt to investigate the suspected fraud or to discuss the matter with anyone other than the Board of Directors, staff of the City of Toronto Housing Stability Services Section and the police.
- Upon notification or discovery of a suspected fraud, the Board of Directors will, in consultation with the City of Toronto Housing Stability Services Section, promptly conduct an initial review and make a determination whether or not the suspected fraud warrants additional investigation. In all circumstances where there appears to be reasonable grounds for suspecting that a fraud has taken place, the Board of Directors, in consultation with (the housing provider’s) legal counsel, will contact the Toronto Police Service. The President shall coordinate the investigation with the City of Toronto Housing Stability Services Section and appropriate law enforcement officials. The board of directors shall investigate any suspected fraud to the satisfaction of the City of Toronto Housing Stability Services Section.
- Once a suspected fraud is reported, the Board of Directors, in consultation with the corporation’s legal counsel and the City of Toronto Social Housing Unit, shall take immediate action to prevent the theft, alteration, or destruction of relevant records.
- Such actions may include, but are not limited to, removing the records and placing them in a secure location, limiting access to the location where the records currently exist, and preventing any individual(s) suspected of committing the fraud from having access to the records. The records must be adequately secured until the investigator engaged to conduct the investigation or the police take control of the records to begin the audit investigation.
5) Define which notifications, discussions and decisions must take place
Examples:
- All Employees: Any employee who has knowledge of an occurrence of irregular conduct, or has reason to suspect that a fraud has occurred, shall immediately notify his/her supervisor. If the employee has reason to believe that the employee’s supervisor may be involved, the employee shall immediately notify the President of the Board of Directors. Employees shall not attempt to investigate a suspected fraud or discuss the matter with anyone other than a person to whom the fraud was reported, staff of the City of Toronto Housing Stability Services Section and the police. An allegation of fraud is a serious matter. Employees who knowingly make false allegations will be subject to discipline up to and including dismissal.
- Supervisors: Upon notification from an employee of suspected fraud, or if the supervisor has reason to suspect that a fraud has occurred, the supervisor shall immediately notify the President. The supervisor shall not attempt to investigate the suspected fraud or to discuss the matter with anyone other than the President, staff of the City of Toronto Housing Stability Services Section and the police.
- President: Upon notification from an employee of a suspected fraud, or if the President has reason to suspect that a fraud has occurred, the President shall immediately advise the Board of Directors and the City of Toronto Housing Stability Services Section. The President shall not attempt to investigate the suspected fraud or to discuss the matter with anyone other than the Board of Directors, staff of the City of Toronto Social Housing Unit and the police.
- Board of Directors: Upon notification or discovery of a suspected fraud, the Board of Directors will, in consultation with the City of Toronto Housing Stability Services Section, promptly conduct an initial review and make a determination whether or not the suspected fraud warrants additional investigation. In all circumstances where there appears to be reasonable grounds for suspecting that a fraud has taken place, the Board of Directors, in consultation with (the housing provider’s) legal counsel, will contact the Toronto Police Service. The President shall coordinate the investigation with the City of Toronto Housing Stability Services Section and appropriate law enforcement officials. The board of directors shall investigate any suspected fraud to the satisfaction of the City of Toronto Housing Stability Services Section.
6) Define procedures for security of evidence and who must be involved
Examples:
- Once a suspected fraud is reported, the Board of Directors, in consultation with the corporation’s legal counsel and the City of Toronto Housing Stability Services Section, shall take immediate action to prevent the theft, alteration, or destruction of relevant records.
- Such actions may include, but are not limited to, removing the records and placing them in a secure location, limiting access to the location where the records currently exist, and preventing any individual(s) suspected of committing the fraud from having access to the records. The records must be adequately secured until the investigator engaged to conduct the investigation or the police take control of the records to begin the audit investigation.
7) Define confidentiality guidelines
Example:
All participants in a fraud investigation shall keep the details and results of the investigation confidential.
8) Define which personnel action must take place.
Examples:
- If a suspicion of fraud is substantiated by the investigation, disciplinary action, up to and including dismissal, shall be taken by the Board of Directors in consultation with the corporation’s legal counsel.
- Unless exceptional circumstances exist, a person under investigation for fraud shall be given notice in writing of the essential particulars of the allegations following the conclusion of the audit investigation and prior to final disciplinary action being taken. Where notice is given, the person against whom allegations are being made may submit a written explanation to the Chair of the Board of Directors no later than seven calendar days after the notice is received. This requirement is subject to any collective agreement provisions respecting the rights of employees during disciplinary proceedings.
9) Define how individuals who report fraud will be protected
Example:
No person acting on behalf of (housing provider), including the Board of Directors shall:
- dismiss or threaten to dismiss an employee;
- discipline or suspend or threaten to discipline or suspend an employee;
- impose any penalty upon an employee; or
- intimidate or coerce an employee because the employee has acted in accordance with the requirements of the policy. Violation of this section will result in discipline up to and including dismissal.
10) Define how media inquiries will be responded to and who will respond
