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  1. #1
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    Default Making Excessive Reimbursement Claims With Your Employer

    State: OK

    An employee of a state agency submits a reimbursement request with a per diem several times that permitted and other expenses prohibited by agency policy. (The per diem was to be reduced due to meals being provided as part of a residential program and documented on the lease.) The payment is erroneously authorized by the employee's supervisor. The reimbursement request paperwork and ultimate payment is corrected (not accurately but closer than the original) by the staff member of the office processing travel vouchers and the repayment is less than requested. The employee is a seasoned traveler and should be aware of the rules. This same "error" was made numerous times on the monthly reimbursement requests in the course of the same extended trip.

    Is there any fraud? At what point would it occur - signing the reimbursement form affidavit or upon receipt of payment?

    In addition, the damage deposit for a temporary residence was paid by the agency but not reimbursed after the employee vacated the apartment.

    Is it fraud to fail to repay the deposit paid on the employee's behalf refunded to him?

    Another employee authorized the travel reimbursement for a family member even signing the affidavit that he has no family relationship with the traveler. There was a nepotism agreement in force prohibiting the authorizing employee from having any input or control over the financial affairs of the other. How serious is this and what should have been done to either or both employees? (Note the spouses use different last names and the reimbursement office employee would be unlikely to know of the affiliation or nepotism agreement.)

  2. #2
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    Default Re: When is a Reimbursement Fraudulent

    It’s fraud when the employee submits requests for payment for things he/she knows he/she is not entitled to get. The fraud occurs when the request is submitted to the agency. Whether the agency will actually pursue criminal charges for it is another matter.

  3. #3
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    Default Re: When is a Reimbursement Fraudulent

    If this person is really an employee of a state agency, there is absolutely no way that the state's Human Resources division would not be actively involved in any sort of discipline for fraudulent reimbursement of per diem, multiple reimbursements for the same expenses, or fraudulent authorization that involves family members. They (as a state government agency) have policies in place, controlled by state government employee policy as a whole, and this body would be the decision makers on whether or not to press charges, how to handle any overpayments of per diem, how to investigate incidents of possible wrongdoing, and what disciplinary measures would be taken against the perpetrators.

    Are you a co worker or a family member? Ex wife? It sounds like what you're considering trying to do is "tell on" somebody and find out what they could have done to them. I suspect you want to know just how much trouble you can get them into. Of course, you're a diligent citizen, taxpayer, co worker, whatever, so go on, report them, and let the chips fall. This happens with tremendous frequency in state government, which is one reason there's not as much of it that goes on as people outside the system would like to assume. The thing is, if anybody in the world knows it has happened, they can tell on you at any time, and probably will. This probably will not be the first report of this type of activity that they'll have gotten this week, or even today.

    One thing the agency will not do is inform the person who provides them the information about such things as what they've done, what punishment they've meted out, whether they've determined actual fraud, anything like that. It is reported, and then that's all she wrote unless you are the actual person involved or are very close and they tell you what transpires.

  4. #4
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    Default Re: When is a Reimbursement Fraudulent

    I am a concerned citizen investigating another issue within the agency and discovered these when reviewing the government transparency website as part of my background review. I do not know any of the individuals personally, only by reputation.

    It appears that their questionable conduct is being overlooked because the individuals involved bring large dollar federal grants into the agency. The agency has been made aware of many of the issues. Conduct of the individuals has changed over time; in some ways, it has become even more questionable involving family members. This may have been the case over time but is only becoming evident as I make additional requests based on responses to previous questions. (For a current concern, I was provided a list of purchases and the associated internal accounts. Earlier I had become aware of a publicly available (but well hidden, spreadsheet naming the accounts and responsible party.) Once I saw the name of the account, I associated it with a company about whose relationship with the agency I had become concerned.

    The reason for my question is that I have been advised that the only way to force an investigation when the state agency appears to be ignoring the problem (one person even received a $15,000 bonus after being reported for some of the activities) is to send the information to the county district attorney and that a widespread investigation would involve a multi county grand jury. Individually, the offenses are relatively small although at least one approaches $100,000 per year for a 3 year contract. One I discovered recently shows over $100,000 in purchases earlier this year for the benefit of a for profit company owned by a family member of the individual involved. I have asked for the documents demonstrating that the company has reimbursed for this material. There are likely advantages to the agency making the purchases as part of a price discount or sales tax avoidance scheme.

    Another recent discovery is that a for-profit company is granting its customers access to a custom application on the agency's computer network. I have previously asked for all agreements between the agency and the company for any collaborative arrangements; the one I was provided is first, expired and second, does not apply. I have asked for additional information but expect to be told that there are "no responsive records". I have received that reply in response to my request for meeting minutes for the committee overseeing a multi-million dollar resource - really, an oversight committee that chooses not to have a record of its activities so the record is unavailable.

    Before I decide to go to the DA, I need to understand what is actionable fraud verses what is bad judgment on the part of the state employees involved. Since it is impossible to get enough records to assess the magnitude of many of the questionable activities involved, it is impossible to quantify the financial impact to the agency. To make matters even worse, the employees benefitting personally are some of the most highly paid state employees (one made over $400,000 last year per the publicly available salary database).

    Based on what I have learned, several should be terminated for cause. However, my main concern is that the questionable conduct stop and that the companies involved (owned by the state employee and/or their family member) be held to the appropriate standard of conduct prescribed by law and agency policies.

    - - - Updated - - -

    I can understand not pursuing an individual for $1,000 but in some cases it exceeds $100,000. The person "owning" the account is related to the person owning the company involved in the unusual transactions.

    There is a clique of about a dozen individuals who all seem to collaborate on projects and have these unusual activities.

  5. #5
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    Default Re: When is a Reimbursement Fraudulent

    An you're just going to do this as a concerned citizen, hm? Well, lots of luck. You may talk to the DA's office. But you may find that in the convoluted world of state politics, which is the one in which the DA has been elected, they may decide not to pursue this issue. I assume you have already reported these situations through all the "state fraud and waste" hotlines that are available to you through state government.

    In my area there was a very shifty government contractor, who dealt with federal money, and the situation had gone on for about thirty years. When one of the principal parties was dying, she decided to rat out all her co-conspirators. She did it through the "channel five reports" on the local television channel. You know, the investigative news reporter who wants to have some topic to explore and would love to hear about and give in-depth reports about all the alleged fraud that's going on with your tax dollars at the xxx agency. Eventually there was a state audit, and a federal audit, and one person was actually fired from her multi-hundred thousand dollar a year job and had to give up her federally paid for living situation. Otherwise, there's been no prosecution, no real change and the agency is still carrying on, doing about the same amount of waste, fraud and nepotism. It will drive you crazy if you keep pursuing it. Trying to make government run correctly as it "should" will get you terminated, but it is doubtful it will bring about any meaningful change in the circumstances.

  6. #6
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    Default Re: When is a Reimbursement Fraudulent

    Quote Quoting T53147
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    Before I decide to go to the DA, I need to understand what is actionable fraud verses what is bad judgment on the part of the state employees involved.
    Why do you have to resolve that yourself? Presumably you are not a lawyer and thus may not be in a position to make a knowledgeable call on that and in any event you don’t have to prove it’s criminal before taking your concerns to the DA or state attorney general. It’s the prosecutor’s job to sort out what crimes, if any, have taken place and what to do about it. Present them with the facts you have and your concerns. That’s all you can really do here.

  7. #7
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    Default Re: When is a Reimbursement Fraudulent

    I cannot speak for prosecutors in Oklahoma, but as a retired state employee/manager/administrator from another state with 33 years of experience, I can offer some insight as to how these situations would be viewed where I am at.

    First I must point out there is the letter of the law and there is reality. There are more crimes committed than the police, prosecutors and courts have the resources to pursue. As a result, prosecutors do not have the luxury of going after each and every crime that is presented to them. Instead, they favor action on those crimes which are most serious and have the greatest likelihood of conviction. In short, just because you report a matter to the DA doesn’t mean it will be investigated and prosecuted.

    Quote Quoting T53147
    View Post
    An employee of a state agency submits a reimbursement request with a per diem several times that permitted and other expenses prohibited by agency policy. (The per diem was to be reduced due to meals being provided as part of a residential program and documented on the lease.) The payment is erroneously authorized by the employee's supervisor. The reimbursement request paperwork and ultimate payment is corrected (not accurately but closer than the original) by the staff member of the office processing travel vouchers and the repayment is less than requested. The employee is a seasoned traveler and should be aware of the rules. This same "error" was made numerous times on the monthly reimbursement requests in the course of the same extended trip.

    Is there any fraud? At what point would it occur - signing the reimbursement form affidavit or upon receipt of payment?
    Even though he was an experienced traveler, the employee could claim he acted in good faith and misinterpreted state travel expense rules which tend to be complex and confusing. Such a defense would be substantiated by the fact that his supervisor appeared equally confused and approved the erroneous claim. Because the error was caught and no overpayment was made, no one profited. More than likely prosecution would be declined with a recommendation for administrative action (retraining both the employee and the supervisor in travel expense policy). If after retraining, the employee and supervisor continued to make the same errors and it appeared they were deliberately conspiring to do so, the department might then look at them for falsification of public documents. However, if it was caught before payments were made, most likely the local prosecutor would decline to prosecute again, with another recommendation for administrative action (termination).

    Quote Quoting T53147
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    …the damage deposit for a temporary residence was paid by the agency but not reimbursed after the employee vacated the apartment.

    Is it fraud to fail to repay the deposit paid on the employee's behalf refunded to him?
    I’m going to assume that because the state paid the security deposit, they are the ones that rented the residence. Based solely on the little information you have posted there does not appear to be any fraud. Instead, this is an administrative matter between the state and their employee. If the employee intentionally or negligently damaged property rented by the state, the state needs to initiate administrative (disciplinary) action against that person. After hearing evidence from both sides, an Administrative Law Judge will determine what discipline to impose, which could include reimbursement to the state. OTOH, it is entirely possible the damage was the result of something beyond reasonable control of the employee, in which case there would be no liability on their part and no administrative action would be initiated against them.

    Quote Quoting T53147
    View Post
    Another employee authorized the travel reimbursement for a family member even signing the affidavit that he has no family relationship with the traveler. There was a nepotism agreement in force prohibiting the authorizing employee from having any input or control over the financial affairs of the other. How serious is this and what should have been done to either or both employees? (Note the spouses use different last names and the reimbursement office employee would be unlikely to know of the affiliation or nepotism agreement.)
    A lot is going to depend on the exact wording of the nepotism policy, whether there was anyone else available with authority to approve the claim in a timely manner, whether provisions of policy or an MOU would have been violated by a delay in seeking approval from an authorized person other that the spouse, whether there was anything about the claim that was fraudulent or out of policy with respect to reimbursement amounts claimed – there’s a whole laundry list of considerations.

    If it was a legitimate travel claim with no errors or improprieties, the worst that is likely to come from your complaint is a mild verbal counseling.

  8. #8
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    Default Re: When is a Reimbursement Fraudulent

    Thank you for all of the insight into the realities of government.

    Since I have never been employed by the state in any capacity and ma now retired, there is nothing they can do to me in that sense.

    What is so frustrating is that this agency is always begging for more funding and there is significant waste and abuse that could be redirected to the programs. While each item I have found is relatively small in the entire budget, $10,000 here and $100,000 there adds up.

    - - - Updated - - -

    Quote Quoting L-1
    View Post

    Even though he was an experienced traveler, the employee could claim he acted in good faith and misinterpreted state travel expense rules which tend to be complex and confusing. Such a defense would be substantiated by the fact that his supervisor appeared equally confused and approved the erroneous claim. Because the error was caught and no overpayment was made, no one profited. More than likely prosecution would be declined with a recommendation for administrative action (retraining both the employee and the supervisor in travel expense policy). If after retraining, the employee and supervisor continued to make the same errors and it appeared they were deliberately conspiring to do so, the department might then look at them for falsification of public documents. However, if it was caught before payments were made, most likely the local prosecutor would decline to prosecute again, with another recommendation for administrative action (termination).



    I’m going to assume that because the state paid the security deposit, they are the ones that rented the residence. Based solely on the little information you have posted there does not appear to be any fraud. Instead, this is an administrative matter between the state and their employee. If the employee intentionally or negligently damaged property rented by the state, the state needs to initiate administrative (disciplinary) action against that person. After hearing evidence from both sides, an Administrative Law Judge will determine what discipline to impose, which could include reimbursement to the state. OTOH, it is entirely possible the damage was the result of something beyond reasonable control of the employee, in which case there would be no liability on their part and no administrative action would be initiated against them.



    A lot is going to depend on the exact wording of the nepotism policy, whether there was anyone else available with authority to approve the claim in a timely manner, whether provisions of policy or an MOU would have been violated by a delay in seeking approval from an authorized person other that the spouse, whether there was anything about the claim that was fraudulent or out of policy with respect to reimbursement amounts claimed – there’s a whole laundry list of considerations.

    If it was a legitimate travel claim with no errors or improprieties, the worst that is likely to come from your complaint is a mild verbal counseling.

    I have found the agencies policies to be fair, well documented, and clearly written. It is not hard to understand that the agency does not pay first class airfare - and certainly not for the spouse as well, among other things. Taking personal time during an agency funded international trip to work for another employer without prorating all of the travel expenses seems to be an obvious abuse that no one would have thought to put that prohibition in agency travel policies.

    The person with the most questionable reimbursement claims continued to submit them in the same format after receiving payment on earlier ones that had been corrected. These are highly educated people. If they paid as little attention to the detail in their work as they do in their financial dealings, their work cannot be trusted. I have found misrepresentations in those documents as well.

    The rental agreement was actually a lease with the employee that was reimbursed by the agency. I was surprised that the agency would reimburse that fee upon payment since it is not the agency's responsibility to maintain the property in good condition.

    Many of the reimbursement claims are made months after the purchases or travel; seeing something dated 6 to 8 months earlier is not unusual. In the case of the nepotism violation, the travel claim contained numerous irregularities and line items for strictly personal expenses. Some claims are for purchases made locally on dates when the person making the claim was being reimbursed for international travel. I keep finding more and more abuses that are so flagrant that I cannot believe they are occurring.

    The supposedly independent oversight group that looks for fraud in government in the state actually rents space from the agency and has declined to investigate based on this relationship; they would have if it had been a different agency in which the questionable activities are occurring.

    The taxpayers,other employees, and - most importantly - the individuals being served by this agency are being harmed by having the limited funds misused.

    MANY THANKS FOR THE ADVICE.

  9. #9
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    Default Re: When is a Reimbursement Fraudulent

    25 years of my career were spent reviewing and approving all sorts of reports prepared by trained, experienced, college educated state employees. I rarely saw deliberate falsification but I frequently came across documents prepared by people who appeared to be Felony Stupid (for lack of a better term). Among other items, Travel expense claims could be a nightmare, with employees being unable to comprehend the difference between a reimbursement for something they actually purchased (and which must substantiated) and an allowance (which is like a stipend for which there is no accountability), or knowing the exact point at which a particular expense benefit kicked in (which could be literally dependent on how many minutes of overtime they worked). Often you had to temper this against individuals in upper management who would become upset with certain employees and want them fired for having the temerity to even submit a travel expense claim. Then you are stuck in the middle having to explain that travel expenses are a right granted by law and firing someone for claiming them could get us all terminated.

    You have to remember two things to survive in government:

    1. For as long as we recruit from the human race, civil servants are going to make mistakes. It’s just going to happen.

    2. No set of rules can be written so thoroughly as to anticipate every possible contingency. From time to time a situation will present itself that was never contemplated by policy. When this occurs, you have to make things up as you go, break a few existing rules and create a few ad hoc policies as needed. If you don’t, government will grind to a halt.

    - - - Updated - - -

    Just ensure you have a full understanding of the intricacies of your state government's allowances and reimbursement system. What the rules say is important. What they don't say can be even more important. Unless you have a grasp of that and know the loopholes, you will come across as a busybody

    For example, before I retired, state employees who worked more than two hours of overtime were allowed up to an $8 reimbursement for an overtime meal. However, the law did not specify what kind of food was to be purchased, how it was to be obtained or when it was to be consumed. Rather than go to a restaurant, employees would get off work, run to the grocery store and purchase steaks for later consumption, or to a liquor store where they would purchase alcoholic beverages. Many rib eye and liquor receipts came across my desk on travel expense claims.

    No doubt the public would have been enraged by such conduct as it was not in keeping with the spirit of the law, which was to save a tired and overworked employee from having to cook a meal. However, it was in keeping with the letter of the law and there was (and still is) nothing preventing it.

    My whole point here is, you need to know the ins and outs of the state's administrative laws on travel expenses (both what they say and don't say), how case law interprets those rules, what additional rights regarding travel expenses are granted the concerned employee by their bargaining unit's MOU and what their agency's established past practice is. Fail to do that and you will lack credibility and come across as a crackpot.

    Remember also, it is not enough to make an allegation of this nature, stamp your foot and insist prosecutors investigate it. Again, most of which you describe rests more in the administrative category. If you seriously want a criminal prosecutor's attention, you are going to have to put the case together yourself. That means you are going to have to document how you know the allegation to be true by collecting physical evidence, gathering witness statements, putting them in an understandable order and demonstrating that all the elements of a crime have been committed.

    There is also another consideration. Because you are doing this as a private citizen, you do not have the immunities and indemnification afforded you that a public employee would have if they were doing this within the scope and course of their duties. Let's assume a prosecutor declines to file charges after you present your case, but the negative publicity raised by your allegations hampers the accused employees' careers and causes them to be denied promotion in the future. You could be facing a serious civil suit for slander and defamation of character you would have to defend out of your own pocket. If you lose, you could be facing the loss of your bank account and home.

    If you still want to pursue this, I would suggest retaining the services of legal counsel, preferably a former prosecutor, and having him help you package everything together. I know it will cost you big bucks but what price justice? (Plus, it may help keep you out of legal trouble.)

  10. #10
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    Default Re: When is a Reimbursement Fraudulent

    Quote Quoting L-1
    View Post
    25 years of my career were spent reviewing and approving all sorts of reports prepared by trained, experienced, college educated state employees. I rarely saw deliberate falsification but I frequently came across documents prepared by people who appeared to be Felony Stupid (for lack of a better term). Among other items, Travel expense claims could be a nightmare, with employees being unable to comprehend the difference between a reimbursement for something they actually purchased (and which must substantiated) and an allowance (which is like a stipend for which there is no accountability), or knowing the exact point at which a particular expense benefit kicked in (which could be literally dependent on how many minutes of overtime they worked). Often you had to temper this against individuals in upper management who would become upset with certain employees and want them fired for having the temerity to even submit a travel expense claim. Then you are stuck in the middle having to explain that travel expenses are a right granted by law and firing someone for claiming them could get us all terminated.

    You have to remember two things to survive in government:

    1. For as long as we recruit from the human race, civil servants are going to make mistakes. It’s just going to happen.

    2. No set of rules can be written so thoroughly as to anticipate every possible contingency. From time to time a situation will present itself that was never contemplated by policy. When this occurs, you have to make things up as you go, break a few existing rules and create a few ad hoc policies as needed. If you don’t, government will grind to a halt.

    - - - Updated - - -

    Just ensure you have a full understanding of the intricacies of your state government's allowances and reimbursement system. What the rules say is important. What they don't say can be even more important. Unless you have a grasp of that and know the loopholes, you will come across as a busybody

    For example, before I retired, state employees who worked more than two hours of overtime were allowed up to an $8 reimbursement for an overtime meal. However, the law did not specify what kind of food was to be purchased, how it was to be obtained or when it was to be consumed. Rather than go to a restaurant, employees would get off work, run to the grocery store and purchase steaks for later consumption, or to a liquor store where they would purchase alcoholic beverages. Many rib eye and liquor receipts came across my desk on travel expense claims.

    No doubt the public would have been enraged by such conduct as it was not in keeping with the spirit of the law, which was to save a tired and overworked employee from having to cook a meal. However, it was in keeping with the letter of the law and there was (and still is) nothing preventing it.

    My whole point here is, you need to know the ins and outs of the state's administrative laws on travel expenses (both what they say and don't say), how case law interprets those rules, what additional rights regarding travel expenses are granted the concerned employee by their bargaining unit's MOU and what their agency's established past practice is. Fail to do that and you will lack credibility and come across as a crackpot.

    Remember also, it is not enough to make an allegation of this nature, stamp your foot and insist prosecutors investigate it. Again, most of which you describe rests more in the administrative category. If you seriously want a criminal prosecutor's attention, you are going to have to put the case together yourself. That means you are going to have to document how you know the allegation to be true by collecting physical evidence, gathering witness statements, putting them in an understandable order and demonstrating that all the elements of a crime have been committed.

    There is also another consideration. Because you are doing this as a private citizen, you do not have the immunities and indemnification afforded you that a public employee would have if they were doing this within the scope and course of their duties. Let's assume a prosecutor declines to file charges after you present your case, but the negative publicity raised by your allegations hampers the accused employees' careers and causes them to be denied promotion in the future. You could be facing a serious civil suit for slander and defamation of character you would have to defend out of your own pocket. If you lose, you could be facing the loss of your bank account and home.

    If you still want to pursue this, I would suggest retaining the services of legal counsel, preferably a former prosecutor, and having him help you package everything together. I know it will cost you big bucks but what price justice? (Plus, it may help keep you out of legal trouble.)
    Huge amen! to everything said!

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