Conflicts of Interest/Favored Treatment | An organization, and any employee of an organization receiving public monies provided by the State of New Mexico owes a duty to the State and its citizens to act in their interest when carrying out the duties associated with such funding. A Conflict of Interest exists when the employee (or organization) has some personal kinship, friendship, financial or political interest that may cause the employee (or organization) to place personal and/or organizational interests above this duty. Favored treatment, misuse and abuse of public resources are what can result when the legitimate goals and objectives of an organization are compromised for the benefit of a chosen few. Examples of related issues: - Writing off or reducing liabilities; such as cancelling traffic tickets or reducing fines and fees for self, friends or relatives
- Improper reduction or elimination of amounts owed for goods or services provided; including favored treatment extended due to political association, title, position or relationship
- Sending/referring a customer, another employee, a vendor or stakeholder to a business vested in or otherwise controlled or operated by the employee making the referral, or one in which the employee has an interest in directly or through association (such as a relative or close friend)
- Using goods or services belonging to the organization, such as computers and phones, to support personal interests and activities (not business-related)
- Awarding contracts or hiring personnel in exchange for political or campaign assistance, including contributions
- Expending public resources on a businesses owned by the employee or one in which the employee has an interest in, personally or through association
- Intentional violations of State Procurement regulations and related good business practices, thereby subverting fair and open competition; resulting in a specific vendor and/or individual(s) gaining unfair advantage
- Intentional violations of State Travel and Meal Reimbursement regulations and related good business practices, thereby resulting in unreasonable, unnecessary and/or unallowable expenditures being paid with pubic monies; including reimbursements of travel and meals associated with spouses and others not contracted with or otherwise employed by or providing service to the organization
- Accepting or providing gifts of trips, money, goods or services from or to another, including suppliers/vendors, resulting in or otherwise giving rise to the appearance of less than arms-length/fair dealings
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Fraud by an Employee | The commandeering of public resources for personal gain. Deliberate attempts to deceive in order to achieve personal gain or benefit (as opposed to providing inappropriate benefit or gain to others). The solicitation or acceptance of cash, favors, or gifts to perform a function the employee is required by the job description or duty to perform. - Examples of related issues:
- Kickbacks, embezzlement, theft of public resources by an employee
- Money, labor and materials belonging to the organization, paid for with public dollars, diverted by the employee or personal as opposed to organizational use and benefit; including public monies deposited into a personal account
- Kickbacks to the employee in the form of campaign contributions, charitable donations, money, free labor, materials, discounted prices, gifts or anything of value that constitutes reward or payment for having awarded, used or otherwise directed organizational resources towards a specific project, vendor, individual or entity; regardless of whether legitimate goods and services were provided to the organization in the process
- Contract administration where the employee receives payment or other benefit, for enabling a vendor to fraudulently bill and/or be paid for work and/or materials not provided, not provided in accordance with agreed upon terms and conditions, or where agreed upon terms and conditions are detrimental to the organization and contrary to the public need; including practices that enable payment for goods and services not considered necessary, or that are unreasonably priced and/or would be considered an unallowable cost under normal circumstances.
- Note: Issues related to generating personal loans to or for any executive officer or director should be coded as “Improper Loans to Executives.” For more information the “Improper Loans to Executives” definitions.
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Theft of Time by An Employee | Any act or omission which causes an employee to be paid for time not worked for the benefit of the client company. |
Procurement & Contracting Improprieties | Violations of the State of New Mexico Procurement Code and other contracting industry standards increases the likelihood of questionable practices that result in lower quality and/or higher costs being incurred for goods and services. Questionable practices include solicitations that result in unreasonably high costs, low quality, and/or are otherwise unnecessary or unallowable expenditures of public monies. Related improprieties include: bid-rigging; order-splitting to bypass the Request for Proposal (RFP) process or other large-dollar procurement requirements; sole-sourcing of contracts when, in fact, the competitive process would be more appropriate or is otherwise mandated by law or policy; contract administration that enables vendors to be paid for services or goods not provided; individual who authorize or otherwise decides a contract award and, at the same time, has a vested interest in the company receiving the award. Potential conflicts of interest stemming from less-than-arms-length dealings are also a concern—where the individual influencing the contract award or administrating the contract is either related to or has such a close association with one or more of the company’s principals as to create reasonable doubt as to his/her ability to place fiduciary duty above personal bias. |
Improper Loans to Executives or Governing Body members | Directly or indirectly arranging for the extension of credit, or to renew an extension of credit in the form of a personal loan to or for any executive officer or governing body member; including utilizing organizational assets to collateralize personal loans for the same. |
Excesses in Benefits, Travel and/or Meal Allowances | Excessive contributions of organizational resources to an individual retirement plan, excessive quantity and/or questionable travel activity, and/or excessive meal and entertainment expenditures. |
Financial and Cost Reporting Irregularities
| Acts related to the purposeful misstatement of financial position, project costs and/or destruction of related audit workpapers or accounting documents. Acts that fraudulently influence, manipulate, or mislead the public, regulators, decision-makers, independent public or certified accountants and others who rely on the accuracy and completeness of cost and financial reporting.
Note: This incident reporting category does not include issues related to theft or embezzlement, misappropriation or misuse of funds, waste, conflicts of interest, contracting misconduct or wage/hour Issues. Examples of related issues: - Falsifying of Bank Reconciliations
- Falsifying the Trial Balance and/or Financial Statements
- Falsifying of Inventory, Property (Fixed Asset) or Other Reconciliations
- Purposeful Misstatement (Over or Understatement) of Assets or Liabilities
- Purposeful Misclassifying (False Categorizing) of Expenditures
- Improper/Unauthorized Write-offs, Disposal or Removal of Assets
- Purposeful Delay or Acceleration of Revenue and/or Expense Recognition
- Improper Diversion/Use of Funding to Cover Costs Incurred by Unrelated Activities/Programs
- Falsely Recording/Posting of Costs Against Unrelated Activities/Programs
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