North Dakota State University

While NDSU understands the importance of people wanting to remain anonymous, as a state entity, there are laws that we also must comply with in regards to open records. Callers don't have to provide their name to the Hotline. However, with regards to any written or electronic records, NDSU cannot guarantee absolute confidentiality.

This hotline should not to be used to report general workplace environment complaints about supervisors or other employees that don't involve known or suspected fiscal or legal misconduct. This hotline is not to be used as a sounding board for workplace frustration. See FAQ's on how to report these issues.

Definitions:

1. Webster’s New World Dictionary describes Fraud as the "intentional deception to cause a person to give up property or some lawful right."  
2. The Association of Fraud Examiners’(1999) Report to the Nation on Occupational Fraud and Abuse defines occupational fraud and abuse as "the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of employing an organizations’ resources or assets."
3. The Federal Bureau of Investigation defines fraud as "the fraudulent conversion and obtaining of money or property by false pretenses: included are larcenies by bailee and bad checks, except forgeries and counterfeiting" (FBI 1984:342).

The common theme among these definitions is that fraud is a deliberate deception for the personal enrichment of an individual or group

Fraud requires a theft, often accompanied by concealment of the theft, and the wrongful use of the stolen assets or resources into personal assets or resources.

Misuse or abuse of assets does not necessarily institute criminal fraud.

• According to the association of Certified Fraud Examiners, the average fraud scheme lasts about 18 months before discovery; moreover, U.S. businesses lose more than 6 percent of revenues each year due to occupational fraud and abuse.

• The most common method of fraud detection is a tip by an employee, customer, vendor, or anonymous source. 

• The ability to report incidents anonymously is essential to the success of any hotline.  

• Hotlines can help secure a company’s future by further identifying and deterring control weaknesses before they’re allowed to escalate. 

• Once a hotline is in place, employees tempted to defraud an organization may begin to have second thoughts.  

• A hotline is the most effective way for employees to anonymously report activities of wrongdoing that otherwise may go undetected.  Early action may minimize an organization’s loss or mitigate the circumstances if the company itself is charged with wrongdoing due to an employee’s actions. 

• A warning system that supports whistleblowers, such as a fraud hotline, encourages employees to act when others do wrong and can inspire confidence in employees that reporting misconduct is in their best interest and will benefit them, other employees, and the company. 

• It helps to create a culture that values ethical behavior, is committed to preventing and detecting fraud, and will respond decisively and appropriately to misconduct.

How Fraud is Typically Detected

40% Tips (hotlines)
24% Internal audit
21% By accident
18% Internal controls
11% External audit
1%  Other

Source: ACFE's 2004 Report to the Nation on Occupational Fraud and Abuse