University of Washington
Administrative Policy Statements		 May 1, 2002 47.4

Table of Contents

1. Suspected Financial Irregularities

2. Initial Notification of Suspected Loss

3. Internal Audit Investigation

4. Possible Criminal Prosecution

5. Disciplinary Action

6. Settlements

7. Responsibilities of University Restitution Representatives

8. Additional Information
      

University Restitution Process for Financial Losses or Irregularities

 
(Approved by the Provost by authority of Executive Order No. 4, the Executive Vice President by authority Executive Order No. 5, and the Vice President for Student Affairs by authority of Executive Order No. 10)

(Note: In this policy statement the term restitution means repayment to the University by an employee or student for monetary losses due to financial irregularities.)

1.   Suspected Financial Irregularities

University employees are encouraged to report suspected financial irregularities to the University's Department of Internal Audit (Internal Audit) as described in Administrative Policy Statement 47.10, "Policy on Financial Irregularities and Other Related Illegal Acts."

2.   Initial Notification of Suspected Loss

Upon being informed of a suspected financial loss, Internal Audit immediately sends written notice concerning the type of loss, the estimated magnitude of loss, and the suspect individual's name to the following units:

  • University Police Department;

  • State Auditor's Office;

  • The University's division of the Attorney General's Office;

  • The Office of Risk Management;

  • One of the following units, depending upon the suspect individual's University status:

    • The appropriate Human Resources Office, if the suspect individual is a staff employee;

    • The Provost's Office, if the suspect individual is a faculty or academic staff member; or

    • The Office of the Vice President for Student Affairs, if the suspect individual is a student or student employee.

  • The affected department.

Additionally, the Office of Risk Management notifies the University's crime bond carrier if the suspect individual is an employee, and sends a copy of this restitution policy statement to the appropriate manager in the affected department.

3.   Internal Audit Investigation

Internal Audit investigates and issues a report with findings regarding whether a financial loss has occurred, an estimate of the loss, and recommended procedural changes to prevent future losses. Internal Audit distributes the report to the offices listed in Section 2 of this policy statement, as well as other parties that need to know this information in the course of conducting University business (such as the Grant and Contract Accounting Office).

4.   Possible Criminal Prosecution

The University Police Department evaluates the case for possible prosecution and forwards the relevant information to the King County Prosecutor's Office. The University Police Department informs the Office of Risk Management, Internal Audit, and the relevant office: Human Resources Office, Provost's Office, or Office of the Vice President for Student Affairs, about the status of the case—whether the case is accepted for prosecution, and the date and amount of any judgment entered against the suspect individual.

5.   Disciplinary Action

a.   If the Suspect Individual Is an Employee

When the suspect individual is a University employee, either a faculty or staff member, the relevant office (Human Resources Office or the Provost's Office) evaluates the case for disciplinary action and works with the affected department regarding implementation of appropriate action. The appropriate Human Resources Office or the Provost's Office informs the Office of Risk Management of any action affecting the individual's salary or employment status, such as pay reduction, termination, or resignation. The Office of Risk Management is also informed if any other employee receives disciplinary action related to the financial loss.

b.   If the Suspect Individual Is a Student or Student Employee

If the suspect individual is a student or student employee, the Office of the Vice President for Student Affairs evaluates the case for disciplinary action or other appropriate action under the Student Conduct Code (Chapter 478–120 WAC).

6.   Settlements

a.   The Restitution Process

The Office of Risk Management has been designated the authority to approve settlements under this policy statement on behalf of the University and to coordinate the restitution collection process. The restitution process occurs concurrent with possible criminal prosecution and the employee/student disciplinary proceedings. In coordinating the restitution process, the Office of Risk Management takes the following actions:

   #1 In consultation with Internal Audit and the affected department, verifies the gross amount owed.
   #2 In consultation with Grant and Contract Accounting, verifies that the affected department has selected an appropriate account for deposits of restitution payments.
   #3 In consultation with the affected department, verifies that all state or federal grants affected by the financial irregularity and loss have been properly credited.
   #4 If the financial loss included wages, forwards the relevant information to the Payroll Office for calculation of net amount owed.
   #5 If benefits were included in wages, forwards the relevant information to the Benefits Office for calculation of net amount owed.
   #6 In consultation with Internal Audit, determines audit costs incurred by the University and the State Auditor's Office as a result of the review of the reported financial irregularities or losses.
   #7 Determines the proposed settlement amount based upon the previous consultations and calculations.
   #8 Discusses the proposed settlement amount and acceptable terms with the affected department.
   #9 Discusses the settlement amount and proposed terms with the University's division of the Attorney General's Office, which in turn seeks approval of the settlement and terms with the Attorney General representing the State Auditor's Office.
  #10

If a draft restitution agreement or promissory note has been prepared for negotiation purposes, forwards these documents to the University's division of the Attorney General's Office for coordination with the Attorney General representing the State Auditor's Office.

    Note: Pursuant to RCW 43.09.330, no settlement or compromise of a claim resulting from a financial irregularity may be made without approval and consent of the Attorney General and the State Auditor.
  #11 After receiving approval from the Attorney General for the State Auditor's Office, and in consultation with the affected department, determines who will contact the suspect individual regarding settlement and repayment options under the restitution plan. If no appropriate department representative is identified, the Office of Risk Management will contact the suspect individual. Any tentative settlements reached by the affected department must be approved in advance by the Office of Risk Management, and the Attorney General for the State Auditor's Office.
  1)

If a Settlement Is Reached—If settlement is reached, the Office of Risk Management takes the following actions:

   #1 Prepares the final restitution agreement or promissory note, which is to include:
  • Total amount owed;
  • Terms of agreement negotiated with the suspect individual;
  • Interest, if any, on the amount; and
  • Address where future payments, if any, should be sent.
   #2 Obtains the suspect individual's signature as well as that of the appropriate University official(s) on the agreement or promissory note, and delivers the final executed document to the individual, either in person or via certified mail.
   #3 Sends the agreement or promissory note to the Receivables Collection Office with a cover memo, which is to include:

  • The Internal Audit Report number;

  • The suspect individual's name, social security number, and current address and phone number; and

  • The name and budget number of the account belonging to the affected department and/or Internal Audit to which payments should be credited.
   #4 Takes any cash or checks immediately to the Cashier's Office with a Cash Transmittal form crediting the affected department and/or the Internal Audit account.
   #5 Distributes copies of final documents to the following units:

  • The affected department;

  • Internal Audit;

  • The University's division of the Attorney General's Office;

  • The University Police Department; and

  • The appropriate Human Resources Office, the Provost's Office, or the Office of the Vice President for Student Affairs, as pertinent to the suspect individual's University status.
  2)

If a Settlement Is Not Reached—If settlement is not reached with the suspect individual, the following actions are taken:

   #1 The affected department or the Office of Risk Management notifies the suspect individual via certified mail that the matter will be referred to the University's collection process. Copies of the notice are sent to (or maintained by) the following units:

  • The affected department;

  • The Office of Risk Management;

  • Internal Audit;

  • The University's division of the Attorney General's Office;

  • The Receivables Collection Office; and

  • The appropriate Human Resources Office, the Provost's Office, or the Office of the Vice President for Student Affairs, as pertinent to the suspect individual's University status.
   #2

The Office of Risk Management forwards all relevant information regarding the debt to the Receivables Collection Office for collection action with a cover memo, which includes:

  • The Internal Audit Report number;

  • The suspect individual's name, social security number, and current address and phone number; and

  • The name and budget number of the account belonging to the affected department and/or Internal Audit to which payments should be credited.

If the suspect individual is a student or student employee, a hold may be placed on the student's academic records and registration privileges until the debt is satisfied or a satisfactory repayment plan is implemented.
   #3 The Receivables Collection Office informs all parties of the disposition of collection efforts, including when and if a judgment is entered against the suspect individual.

b.   Final Restitution Document

The University's division of the Attorney General's Office forwards the final restitution documentation to the Attorney General for the State Auditor's Office for approval or otherwise informs them of collection efforts.

c.   Termination of Restitution or Collection Efforts

The Receivables Collection Office tracks restitution or collection efforts and notifies all parties when restitution is completed, or collection efforts have been terminated. Additionally, the Receivables Collection Office contacts the Office of Risk Management for approval of any changes requested by the suspect individual to the restitution payment plan during the course of repayment.

7.   Responsibilities of University Restitution Representatives

University representatives who receive restitution payments or negotiate with suspect individuals regarding restitution are responsible for informing all other University parties noted in this policy statement of their restitution efforts. Before finalizing the terms of any restitution agreement, however, the University representative must seek and receive approval from the Office of Risk Management and the Attorney General for the State Auditor's Office.

8.   Additional Information

For further information contact Internal Audit:

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