§ 37.45. REPORTING ERRONEOUS OR IRREGULAR MATERIAL VARIANCES, LOSSES, SHORTAGES OR THEFTS.

(A) Any public official, department head, or employee with actual knowledge or reasonable cause to believe that there has been a misappropriation of public funds is to immediately send a written notice of the misappropriation to the State Board of Accounts and the Prosecuting Attorney, regardless of the amount.

(B) (1) The city establishes the following Materiality Policy under IC 5-11-1-10, 5-11-1-21 and 5-11-1-27:

(2) Materiality, in City of Peru Government, is defined as $500 per occurrence. That is, if one occurrence of a loss or shortage or other irregularity is equal or greater than $500, it must be reported to the State Board of Accounts. The materiality definition is not limited to defalcations, or suspicious activity involving only cash or cash transactions. If supplies, equipment or other fixed assets belonging to the city are suspected of being misappropriated or stolen or used in a manner not authorized by city officials and the value of those supplies, equipment or fixed assets are approximately $500, that misuse or series of misuse should be reported. That is not to say that if a loss or shortage is less than $500 it should be ignored. If there is a series of events, within the same office or department that appears to be a structuring event to defraud or misappropriate city funds or property, that event or series of events should be reported.

(C) Ghost employment.

(1) Indiana Code 35-44.1-1-3 defines ghost employment as a public servant who knowingly or intentionally: (1) hires an employee for the governmental entity that he or she serves; and (2) fails to assign to the employee any duties, or assigns to the employee any duties not related to the operation of the governmental entity; or knowingly or intentionally assigns to an employee under his or her supervision any duties not related to the operation of the governmental entity that he or she serves; or a person employed by a governmental entity who, knowing that he or she has not been assigned any duties to perform for the entity, accepts property from the entity; or a person employed by a governmental entity who knowingly or intentionally accepts property from the entity for the performance of duties not related to the operation of the entity; or any person who accepts property from a governmental entity in violation of this section and any public servant who permits the payment of property in violation of this section are jointly and severally liable to the governmental entity for that property.

(2) Any occurrence of ghost employment, no matter how insignificant it seems at the time, must be reported immediately to the Mayor who shall determine the discipline to be administered.

(D) All items not reported to the State Board of Accounts shall be resolved and discipline, if any, by the Mayor with appropriate documents retained by the Clerk-Treasurer.

(E) When an irregular variance, loss, shortage, or theft is determined material, pursuant to city policy on materiality, the Clerk-Treasurer shall report the incident to the State Board of Accounts. On the State Board of Accounts’ website there is a notification link, which allows public officials to report, via e-mail, irregular variances, losses, shortages, or thefts. Telephone and in-person reporting is also acceptable. Reports will be followed up with a return e-mail or call to gather additional information as necessary. All reports of irregular variances, losses, shortages, or thefts are maintained by the State Board of Accounts.

(Ord. 18, 2016, passed 7-5-16)