Approved by Board of Trustees
Effective Date: June 5, 2017
Responsible Division: President
Responsible Office:  Audit and Consulting Services
Responsible Officer: Chief Audit Executive

I. Purpose

Middle Tennessee State University (MTSU or University) is committed to the responsible stewardship of its resources. Management is responsible for maintaining a work environment that promotes ethical and honest behavior. Additionally, it is the responsibility of management to establish and implement internal control systems and procedures to prevent and detect irregularities, including fraud, waste, and abuse. Management at all levels should be aware of the risks and exposures inherent in their areas of responsibility and should establish and maintain proper internal controls to provide for the security and accountability of all resources entrusted to them.

II. Definitions

A.  Fraud. An intentional act to deceive or cheat, ordinarily for the purpose or result of causing a detriment to another and/or bringing about some benefit to oneself or others. Fraudulent activities may include, but are not limited to, the following:

1.  Theft, misappropriation, misapplication, destruction, removal, or concealment of any University assets or resources, including, but not limited to, funds, securities, supplies, equipment, real property, intellectual property, or data.

2.  Improper use or assignment of any University assets or resources, including, but not limited to, personnel, services, or property.

3.  Improper handling or reporting of financial transactions, including use, acquisitions, and divestiture of state property, both real and personal.

4.  Authorization or receipt of compensation for hours not worked.

5.  Inappropriate or unauthorized use, alteration or manipulation of data, computer files, equipment, software, networks, or systems, including personal or private business use, hacking, and software piracy.

6.  Forgery or unauthorized alteration of documents.

7.  Falsification of reports to management or external agencies.

8.  Pursuit of a personal benefit or advantage in violation of Policy 12 Conflict of Interest.

9.  Concealment or misrepresentation of events or data.

10.  Acceptance of bribes, kickbacks, or any gift, rebate, money, or anything of value whatsoever, or any promise, obligation, or contract for future reward, compensation, property, or item of value, including intellectual property.

B.  Waste. Involves behavior that is deficient or improper when compared with behavior that a prudent person would consider a reasonable and necessary business practice given the facts and circumstances. Waste is a thoughtless or careless act, resulting in the expenditure, consumption, mismanagement, use, or squandering of University assets or resources to the detriment or potential detriment of the University. Waste may also result from incurring unnecessary expenses due to inefficient or ineffective practices, systems, or controls. Waste