Deterring, Detecting and Investigating Potential or Actual Fraud and Other Illegal Acts within the Employees Retirement System of Texas

The potential for, or occurrence of, fraud and other illegal acts is a significant and sensitive management concern in any organization. At the Employees Retirement System of Texas (ERS), this concern is heightened by the breadth and complexity of the responsibilities of this agency, as well as the public expectation of honesty and integrity in government, and particularly regarding administration of trust funds. This policy formalizes the process, and assigns the responsibility of coordinating all efforts of compliance with this policy to the Internal Auditing Department.

The purpose of this policy is to minimize the impact of all potential or actual fraudulent or illegal acts at ERS by deterring such activity or detecting it as early as possible; to alert the public that there is a mechanism by which such activities can be reported and investigated; and to ensure the fair, objective and thorough investigation and reporting of all such activities while safeguarding individual rights and maintaining confidentiality in accordance with applicable law. All documents related to an investigation conducted by Internal Audit are considered audit work papers during the investigation.

This policy relates to all potential or actual fraudulent and other illegal activities: (1) within ERS involving its employees in the conduct of their employment responsibilities, which includes, but is not limited to, theft, malfeasance, insider trading, abuse of power or authority, kickbacks and embezzlement; (2) that involve the misappropriation or theft of any assets belonging to ERS or for which ERS is responsible, including, but not limited to; cash, checks, securities, intellectual property, property and equipment, information and other data.

This policy does not relate to such activities involving any individual, group, organization, government or other entity which is not a part of ERS, unless such activity may have involved an employee of ERS in the conduct of his or her employment responsibilities, or unless such activity involved the embezzlement, misappropriation or theft of any assets belonging to ERS or for which ERS is responsible.

Every effort will be made to maintain the anonymity and protect the rights of all individuals who may be directly connected with the reported fraud or illegal activity.

This policy should not be perceived as a substitute for management's responsibility to be alert to and to deter fraud or other illegal acts in its daily activities.