Department of Internal Audit and Compliance

Fraud, Waste & Abuse

What is Fraud?  Typically requires 3 key elements:

1)      Misrepresentation – “did something wrong”
2)      Done intentionally
3)      Resulted in unauthorized personal gain 

Who Commits Fraud?  Those having:

  • Ability to rationalize – Fraudulent actions  taken weren’t really stealing
  • Opportunity – Due to too much authority resting with one person or a poor internal control environment
  • Pressure – Desperation for wealth or to obtain extra money

Fraud Traingle

 Who Commits Fraud? (Source: 2006 ACFE Report on Occupational Fraud-study of 1134 fraud cases)

Sometimes the best personnel:

  • Majority of perpetrators were long-tenured, managers and executives, male, and middle-aged
  • 64% of frauds were committed by perpetrators with over 5 years’ tenure
  • Median loss for employees with < 1 year’s experience was $45,000, jumping to $263,000 for those with 10+ years’ experience

How Does Fraud Occur?

  •   Billing – Employee submits invoice to customer for personal expenses
  •   Expense reimbursement – Employee expense report claims nonexistent meals, personal travel, etc.
  •   Non-cash – Employee steals business services, identity of staff/students, office supplies, stamps, etc.
  •   Payroll – Taking unreported sick leave, claiming overtime for hours not worked, ghost employees
  •   Skimming – Employee not recording payments received from customers, diverting into own account

How Is Fraud Detected? (Source:  2006 ACFE Report)

How Is Fraud Detected

The University of Toledo Anonymous Reporting Line,   1-888-416-1308 or  A dedicated number available to all UToledo faculty and staff and third parties to report potential concerns in:

  •   Financial Management, Patient Safety, Regulatory Adherence
  •   Allows 24-hour availability; callers may remain anonymous; managed by a third-party vendor
  •   Does not replace existing reporting mechanisms on campus or in the Health System

Internal Controls Are Important for Reasons Other Than Preventing or Detecting Fraud

  •   Controls help detect/prevent honest errors (ex., keypunch/data entry errors)
  •   Computerized controls help ensure accuracy and efficiency (ex., time entry eliminating timesheets)
  •   Redundant or unnecessary steps

Last Updated: 2/18/20