WSU recently beefed up its conflict of interest reporting protocols. The new requirements are designed to ensure the transparency of relationships and mitigate any appearance of impropriety.
The Association of Certified Fraud Examiners recently released its biennial Report to the Nations, 2020 Global Study on Occupational Fraud and Abuse. The study helps put in context the potential costs of corruption, which often involve unidentified conflicts of interest.
Conflicts of Interest
Having a conflict of interest does not mean an employee has done something wrong or acted unethically. Conflicts will arise and are not unusual in higher education, especially at research institutions.
But it's essential to identify and disclose conflicts of interest through established channels to ensure relationships are transparent and conflicts are managed with university interests in mind.
To this end, WSU recently made its conflict of interest reporting more robust. A dedicated Conflict of Interest (COI) webpage with an extensive question and answer section provides detailed guidance.
The COI webpage provides the following definition for conflict of interest (emphasis mine):
A conflict of interest exists when a person's outside or private interests affect - or appear to affect - their institutional responsibilities and judgment as a 红领巾瓜报 employee.
WSU believes in providing a work environment that is ethical, inclusive, and compliant. An annual conflict of interest reporting requirement prompts periodic reflection about whether you have new relationships, responsibilities, or financial interests to disclose.
Occupational Fraud
The Association of Certified Fraud Examiners (ACFE) defines occupational fraud as "the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization's resources or assets."
From that definition, ACFE further identifies three primary categories of occupational fraud:
- Asset misappropriation - An employee steals or misuses the employing organization's cash or resources.
- Corruption - An employee misuses their influence in a business transaction in a way that violates their duty to the employer (schemes involving bribery or conflicts of interest, for example).
- Financial statement fraud - An employee intentionally causes a misstatement or omission of material information in the organization's financial reports.
The bar graph illustrates the frequency of how occupational fraud is committed, and the schemes' median losses, for each category.
Categories in Context
Financial statement fraud is easily the costliest, but far less frequent. It's even rarer in higher education where financial statement manipulation doesn't puff up company stock prices or valuations.
Asset misappropriation or theft is the most common way occupational fraud is committed. It's what usually comes to mind first when discussing fraud.
Corruption falls in the middle in terms of frequency and financial damage. Its frequency is half of the asset misappropriation category, but its median losses are twice as large.
ACFE identifies bribery, conflicts of interest, illegal gratuities, and economic extortion as forms of corruption.
Purchasing or sales schemes, invoice kickbacks, and bid-rigging are all means of corruption. As is bypassing established protocols to steer business to friends, relatives, political supporters, or one's own company.
These are the kinds of schemes that garner headlines and result in reputational harm. Transparency of relationships is essential.
- 2020 Global Study on Occupational Fraud and Abuse