Fraud and Fiscal Misconduct

Scope

This policy applies to all Indiana University units and Members of the University Community.

In the event of a conflict, this policy shall supersede all campus, school and college, program, department, center, institute, and unit policies on any core or regional campuses of Indiana University.

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Policy Statement

It is the policy of Indiana University to fully investigate all instances of fraud and fiscal misconduct. All Members of the University Community must promptly report any known or suspected fraud and fiscal misconduct through the Indiana University Anonymous Reporting Hotline or directly to Internal Audit.  

All Members of the University Community are required to cooperate fully with those performing an investigation into possible fraud and fiscal misconduct. Individuals who suspect fraud or fiscal misconduct must not attempt to investigate on their own.  

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Reason for Policy

To assist all Members of the University Community in recognizing fraud and fiscal misconduct, to encourage individuals to report known or suspected fraud or fiscal misconduct, and to provide a coordinated approach for review and resolution.  

The university follows the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control Integrated Framework which defines fraud as any intentional act or omission designed to deceive others resulting in a loss. The COSO framework helps organizations design and implement a system of strong internal controls, enterprise risk management, and fraud deterrence. 

The university is subject to annual external audits of its financial activities. These audits are conducted in accordance with Generally Accepted Auditing Standards and Government Auditing Standards to provide reasonable assurance to detect a material misstatement when it exists, including those that may result from fraud or fiscal misconduct. Fraud may involve collusion, forgery, intentional omission, misrepresentations, or the override of internal controls.  

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Definitions

Fraud: any intentional act or omission designed to deceive others, resulting in the victim suffering a loss and/or the perpetrator achieving a gain, financial or otherwise. 

Fiscal Misconduct: is an act or failure to act regarding a fiscal matter, contrary to law, rule, or university policy, which results in loss or other damage to the University.  

Fraud and Fiscal misconduct examples include, but are not limited to: 

• Embezzlement, theft, or misappropriation of university funds, goods, property (including intellectual property), services, systems, or other resources. 

• Forgery or unauthorized alteration of financial documents or records. 

• Improper handling or reporting of financial transactions. 

• Intentional disregard for university fiscal policy and procedure.  

• Authorizing or receiving the following:  
  • Compensation for goods not received or services not performed.  
  • Compensation for hours not worked, including falsifying timesheets or other payroll records.  
  • Reimbursement for expenses not incurred or reimbursement for expenses not incurred for University purposes. 

Members of the University Community:  Any individual who is a student, staff, part time employee, academic appointee, university official, or any other individual employed by, or acting on behalf of, the university; other individuals while on Indiana University property, including employees of third-party vendors and contractors, volunteers, and visitors.

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Sanctions

Potentially criminal activity must also be reported to the IU Police Department. Internal Audit is charged with the investigation of all fraud and fiscal misconduct investigations, and coordinates with other offices depending on the nature of the incident reported (e.g. IUPD, UCO, Research Administration, etc.). 

Retaliation against anyone who has made a good-faith report of wrongful conduct, provided information, or participated in an investigation into a good-faith report of wrongful conduct is prohibited by the university’s Whistleblower Protection policy. An individual who makes a false allegation of fiscal misconduct with the intent to disrupt university business or to cause harm to another individual may be subject to disciplinary action.  

The university may take disciplinary action, pursuant to existing university policies and collective bargaining agreements, against any employee who commits fraud or fiscal misconduct. Criminal charges may also be brought against a university employee who commits certain acts of fraud or fiscal misconduct.  

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Additional Contacts

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History

FIN-ACC-30 History

This policy was established on May 1, 1992, and was updated on March 1, 2005, and August 26, 2021.

FIN-ACC-35 History

The fraud policy was established on October 27, 2011, and the fiscal misconduct policy was established on May 1, 1992.Each were updated on March 1, 2005, and August 26, 2021, respectively.

Effective November 18, 2025, these two separate policies have been combined into one comprehensive policy. 

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