SDCERS FRAUD AND CRIMINAL ACTS POLICY AND INTERNAL PROCEDURES

About the Policy:

The SDCERS Fraud and Criminal Acts Policy is a policy adopted by the SDCERS Board of Administration. It is designed for reporting suspected cases of fraud or criminal acts on the part of SDCERS’ employees, trustees or vendors. It does not cover employment-related grievances or appeals. The SDCERS Fraud and Criminal Acts Internal Procedures was developed by SDCERS’ Chief Compliance Officer and reviewed by the Board. It sets forth the procedures to follow in reporting and investigating suspected cases of fraud and criminal acts.

You can read the SDCERS Fraud and Criminal Acts Policy here and the SDCERS Fraud and Criminal Acts Internal Procedures here.

Reporting

The Policy and Internal Procedures require that all SDCERS employees and Trustees report suspected fraud or criminal acts.  Any other person may and is encouraged to report suspected activity falling with the Fraud and Criminal Acts Policy.

Reports may be made orally or in writing.  Anonymous reports will be investigated to the extent that sufficient information is provided to allow for an adequate investigation.

Reports may be made to the SDCERS Board President, Board Vice President, Chief Compliance Officer, General Counsel, any Trustee on the SDCERS Board or, in the case of employees, to their supervisor or division manager.

Reports should be made to any of the persons identified above. However, recognizing that there may be discomfort reporting to the positions identified above, the San Diego City Auditor’s Fraud, Waste and Abuse Hotline is another vehicle to report suspected activity falling under the Policy.  You can find information on the City Auditor’s Hotline here: http://www.sandiego.gov/auditor/resources/fraudhotline/index.shtml

Confidentiality:

SDCERS will at all times maintain the confidentiality of all complaints and associated reports, working papers and other documents, to the greatest extent possible as further outlined in the internal procedures document.

Whistleblower Protection

Persons who report suspected violations in good faith are protected through the state Whistleblower Protection Act.  SDCERS will not retaliate, nor will it tolerate retaliation, against persons who, in good faith, report suspected violations or who participate in the investigation of suspected violations.  An act of retaliation should be reported immediately to the SDCERS Compliance Officer who will investigate any such report as a potential ethics violation.

Investigation

Any person receiving a report of suspected fraudulent or criminal activity must convey the report to the SDCERS Chief Compliance Officer or to the General Counsel if the Chief Compliance Officer is conflicted or otherwise unavailable.  The Chief Compliance Officer, General Counsel and Internal Auditor will conduct an investigation and make appropriate recommendations as outlined in the SDCERS’ Fraud and Criminal Acts Internal Procedures.  Because SDCERS has combined the duties of the Compliance Officer and General Counsel in one person, SDCERS’ outside Fiduciary Counsel acts as the General Counsel for purposes of the Policy.

The SDCERS Internal Auditor will review all reports received under the Policy to determine whether SDCERS’ internal controls have failed or have been violated.  The Internal Auditor will make recommendations he or she deems necessary to revise internal controls.

If the reported acts do not fall within the scope of the Policy, the Chief Compliance Officer will forward the report to the appropriate division manager for review and investigation.

Enforcement

If a complaint is substantiated, the Chief Compliance Officer will recommend to the CEO or the Board, as appropriate, any of the following corrective actions deemed necessary:

  • System changes to prevent future violations of a similar nature
  • Appropriate disciplinary action which may include counseling, oral or written warning, reprimand, supplemental performance evaluation, suspension, reduction in compensation, demotion or termination
  • Referral to an outside enforcement or prosecutorial agency which may result in prosecution and conviction
  • Seek recovery of any losses suffered by SDCERS, its members or beneficiaries
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