POLICY ON SUSPECTED FINANCIAL THEFT,
DISHONESTY OR OTHER FINANCIAL MISCONDUCT1
(Adopted by Council 7/20/12)
Like all organizations, the Minnesota State Bar Association (“MSBA” or “Organization”) is faced with the risks that come from financial theft, dishonesty or other financial misconduct by MSBA volunteers and employees. MSBA must be prepared to manage these risks and their potential impact on MSBA in a lawful, ethical and professional manner.
The impact on MSBA of financial theft, dishonesty or other financial misconduct may include:
· the actual financial loss incurred
· damage to the reputation of MSBA
· the cost of investigation
· loss of employees
· loss of customers
· fines and penalties
MSBA’s goal is to establish and maintain a working environment of fairness, ethics and honesty for MSBA’s stakeholders, including members, employees, customers, and suppliers. To maintain such an environment requires the active assistance of every employee and volunteer every day.
MSBA is committed to the deterrence, detection and correction of financial theft, dishonesty and other financial misconduct by MSBA volunteers and employees. The discovery, reporting and documentation of such acts provides a sound foundation for the protection of innocent parties, the taking of disciplinary action against offenders up to and including dismissal where appropriate, the referral to law enforcement agencies when warranted by the facts, and the recovery of losses and other expenses.
The purpose of this document is to communicate MSBA’s policy regarding the deterrence and investigation of suspected financial theft, dishonesty and other financial misconduct by MSBA volunteers, and employees incident to their volunteer activities or employment, and to provide specific instructions regarding appropriate action in case of suspected violations of financial improprieties.
Definition of Financial Theft, Dishonesty and other Financial Misconduct
For purposes of this policy, financial theft, dishonesty and other financial misconduct include, but are not limited to:
· theft or other misappropriation of assets of MSBA customers, suppliers or others with whom MSBA has a business relationship
· intentional misstatements in the financial records of MSBA
· forgery or other alteration of financial documents
· fraud and other unlawful acts related to MSBA financial matters
MSBA specifically prohibits these and any other illegal activities related to financial matters in the actions of its volunteers and employees incident to their employment by MSBA or volunteer activities for MSBA.
Each Council member, volunteer and employee of MSBA has an obligation to report in accordance with this policy (a) questionable or improper accounting or auditing matters affecting the MSBA, and (b) suspected financial theft, dishonesty and other financial misconduct affecting the MSBA (hereinafter collectively referred to as Concerns).
Authority of Audit Committee
All reported Concerns will be forwarded to the Audit Committee in accordance with the procedures set forth herein. The Audit Committee shall be responsible for investigating, and making appropriate recommendations to the Council, with respect to all reported Concerns.
This Policy is intended to encourage and enable volunteers and employees to raise Concerns within the Organization for investigation and appropriate action. With this goal in mind, no Council member, volunteer or employee who, in good faith, reports a Concern shall be subject to retaliation or, in the case of an employee, adverse employment consequences. Moreover, a volunteer or employee who retaliates against someone who has reported a Concern in good faith is subject to discipline up to and including dismissal from the volunteer position or termination of employment.
Employees -- Employees should first discuss their Concern with their supervisor. If, after speaking with his or her supervisor, the individual continues to have reasonable grounds to believe the Concern is valid, the individual should report the Concern to the Executive Director. In addition, if the individual is uncomfortable speaking with his or her supervisor, or the supervisor is a subject of the Concern, the individual should report his or her Concern directly to the Executive Director.
If the Concern was reported verbally to the Executive Director, the reporting individual, with assistance from the Executive Director, shall reduce the Concern to writing. The Executive Director is required to promptly report the Concern to the Chair of the Audit Committee, which has specific and exclusive responsibility to investigate all Concerns. If the Executive Director, for any reason, does not promptly forward the Concern to the Audit Committee, the reporting individual should directly report the Concern to the Chair of the Audit Committee. Concerns may also be submitted anonymously. Such anonymous Concerns should be in writing and sent directly to the Chair of the Audit Committee.
Council Members and Other Volunteers -- Council members and other volunteers should submit Concerns in writing directly to the Chair of the Audit Committee.
Additional Responsibilities of the Executive Director and Supervisors
The Executive Director and supervisors have additional deterrence and detection duties. In addition to reporting suspected violations as is required above, you have three additional responsibilities:
First, you must become aware of what likely can go wrong in your area of responsibility.
Second, you must put into place and maintain reasonable monitoring, review and control procedures which will prevent acts of wrongdoing.
Third, you must put into place and maintain reasonable monitoring, review and control procedures which will detect acts of wrongdoing promptly should prevention efforts fail.
Authority to carry out these three additional responsibilities is often delegated to subordinates. However, accountability for their effectiveness cannot be delegated and will remain with supervisors and managers.
Responsibility and Authority for Follow Up and Investigation
The Audit Committee has the primary responsibility for all investigations involving financial improprieties at the MSBA.
Properly designated members of the investigative team will have:
free and unrestricted access to all MSBA records and premises, whether owned or rented
the authority to examine, copy and/or remove all or any portion of the contents of files, desks, cabinets, and other storage facilities (whether in electronic or other form) without the prior knowledge or consent of any individual who might use or have custody of any such items or facilities when it is within the scope of investigative or related follow up procedures.
All investigations of alleged wrongdoing will be conducted in accordance with applicable laws and MSBA procedures.
Reported Incident Follow Up Procedure
Care must be taken in the follow up of suspected financial theft, dishonesty or other financial misconduct to avoid acting on incorrect or unsupported accusations, to avoid alerting suspected individuals that follow up and investigation is underway, and to avoid making statements which could adversely affect the Organization, an employee, or other parties.
Accordingly, the general procedures for follow up and investigation of reported incidents are as follows:
1. Employees and others must immediately report all factual details as indicated above under this policy.
2. The Audit Committee has the responsibility for follow up and, if appropriate, investigation of all reported incidents.
3. All records related to the reported incident will be retained wherever they reside.
4. Any communication with the suspected individuals about the matter under investigation will be directed by the Audit Committee.
5. Neither the existence nor the results of investigations or other follow up activity will be disclosed or discussed with anyone other than those persons who have a legitimate need to know in order to perform their duties and responsibilities effectively. However, the Audit Committee may issue a final report of its investigation if appropriate.
6. All inquiries from an attorney or any other contacts from outside of the MSBA, including those from law enforcement agencies or from the employee under investigation, should be referred to the Audit Committee.
7. The Audit Committee has the responsibility to inform the original complainant of the resolution and outcome of the reported incident. Such information shall not include disclosure of specific disciplinary or other confidential information.
Investigative or other follow up activity will be carried out without regard to the suspected individual’s position or level or relationship with the Organization.
Acting in Good Faith
Anyone reporting a Concern must act in good faith and have reasonable grounds for believing the information disclosed indicates an improper accounting or auditing practice. The act of making allegations that prove to be unsubstantiated, and that prove to have been made maliciously, recklessly, or with the foreknowledge that the allegations are false, will be viewed as a serious disciplinary offense and may result in discipline, up to and including dismissal from the volunteer position or termination of employment. Such conduct may also give rise to other actions, including civil lawsuits.
Reports of Concerns, and investigation pertaining thereto, shall be kept confidential to the extent possible, consistent with the need to conduct an adequate investigation.
Unauthorized disclosure of reports of Concerns to individuals not involved in the investigation will be viewed as a serious disciplinary offense and may result in discipline up to and including termination of employment. Such conduct may also give rise to other actions, including civil lawsuits.
Questions or Clarifications Related to this Policy
All questions or other clarifications of this policy and its related responsibilities should be addressed to the Chair of the Audit Committee, who shall be responsible for the administration, revision, interpretation, and application of this policy.
 This Policy applies to MSBA only, and does not apply to Minnesota CLE.