Case in Point: Lessons for the proactive manager

Volume 17 Issue 03 | March 2025

This month we continue our review of the events of 2024 with a focus on the Fraud & Ethics Category. Since our inception of this newsletter, occupational fraud – situations where employees use their position to commit misappropriation – has been the most frequent item seen in this category. While occupational fraud continues to lead the way in 2024, coming in a close second is research related topics. These come in a variety of ways: grant fraud, foreign disclosure issues, false claims, and more. The third most frequent item we see are those stories related to conflicts of interest.

2024 Fraud & Ethics
1. Occupational Fraud
2. Research Related Issues
3. Conflicts of Interest

This category takes on increased importance in the current national environment of intense scrutiny of how funds are expended. We’ve also seen an overall increase in reports coming to our anonymous reporting system over the past year, with more than 100% growth in reports received from 2023 to 2024. We are on course after the first quarter of 2025 for yet another increase in the number of reports received. While not all reports are substantiated by our office, it does indicate a willingness by employees and others to report things that they see as issues. No matter what your opinion is of DOGE and those efforts to find fraud and wasteful spending, similar scrutiny will make its way down to institutions in the coming year. Therefore, the need to emphasize ethics and compliance has never been greater. 

The stories we link in this category all essentially come down to individuals who make poor decisions, which leads to the question: how can we increase the odds of ethical decision making?  We offer three suggestions that might help improve the odds of wise decision making at your institution:

1. Have a board approved Code of Conduct/Ethics. This sends the message from the very top that ethical behavior is expected at your institution. You can see AU’s board approved code here.

2. Ensure training is offered on both policies and ethics. While training in these areas is often optional, institutions might consider making ethics training mandatory going forward.

3. Have a way people can report wrongdoing they see. The threat of detection is a powerful motivator for not committing wrongdoing.

While this topic is vitally important, as always, there are a multitude of risks facing our industry. We invite you to review this month's news stories with a view toward proactively managing risk in your sphere of influence. We welcome your comments and suggestions.