FRAUD POLICY STATEMENT Alternatives Federal Credit Union considers any form of fraud, dishonesty or manipulation on the part of its officials (all board members including committee members) or employees as totally unacceptable conduct. Fraud includes any act, omission, or concealment that involves a breach of duty, that involves a breach of trust, or involves a breach of confidence. Dishonesty infers a disposition to fraud, untrustworthiness, or lack of integrity. Acts which are considered to be either fraudulent or dishonest include, but are not limited to: 1) Manipulation of credit union or member loan accounts, documents, computer records, share accounts, share draft accounts, or other depository accounts. 2) Theft of any kind, including misappropriation of funds from members’ accounts, overpayment of dividends, creating fictitious accounts (either loan or share), or any other unauthorized misapplication of funds. 3) Check kiting or other unauthorized overdraft and deposit methods and practices. 4) Forgeries or unauthorized alterations of any documents whatsoever. 5) Unauthorized or unapproved salary advances, compensatory time off, leave advances, or overtime reimbursements, including unauthorized or unapproved use of time sheets. 6) Software piracy or unauthorized or unapproved use of computer time or equipment. 7) Intentional violation of credit union policies, rules, internal controls, regulations or procedures. 8) Giving out passwords/authorizations/combinations and/or keys to anyone not authorized to be in possession of such things. 9) Intentionally failing to secure collateral, to properly record a security interest in collateral or pledging a member’s depository accounts or other property as collateral without that member’s permission. 10) Obtaining employment on the basis of false or misleading information. 11) Initiating any activity on a member’s account without prior approval of the member or of management. 12) Initiating any activity on an employee’s own personal account or employee’s family account (including domestic partners). 13) Granting or requesting preferential treatment for anyone. 14) Disclosing confidential credit union information to any one not entitled to or authorized to have the information. 15) No credit union official or employee shall accept any gift, favor, or hospitality offered or tendered where the gift, favor or hospitality possesses any of the following characteristics: a. In substance or form that an impartial observer would considerate to be an improper incentive. b. It places the official or employee under an actual or implied obligation. c. It has a value equivalent to or greater than $25. d. It is in the form of cash of cash equivalents. I have read the above Fraud Policy Statement and understand that this statement is required of all officials and employees of Alternatives Federal Credit Union. I understand that the Board of Directors and management will not tolerate fraudulent or dishonest acts of any kind and I am not to engage in acts of fraud, dishonesty or manipulation while servings as a credit union official or employee of Alternatives Federal Credit Union. I further understand that engaging in such acts will be grounds for disciplinary action, up to and including immediate dismissal and termination of my employment with Alternatives Federal Credit Union. I have received a copy of this statement and understand that the original signed copy will be retained by the credit union in my personnel file. __________________________________________ ___________ Board Member, Committee Member, or Employee Date Signature __________________________________________ ____________ Witness Date Alternatives Federal Credit Union Fraud Policy Statement General Policy Statement - Alternatives does not tolerate fraud by its officials or employees. Unacceptable Acts: are listed in the employee statement above. Deterrence: a) Internal Controls. The Board of Directors is responsible to institute internal controls to deter fraud. The Supervisory Committee periodically examines the internal control for sufficiency and effectiveness. b) Employee Statement. All Credit Union Officials and staff will sign a statement defining acts considered fraudulent and acknowledging that fraud of any type will not be tolerated. Investigation: a) Confidentiality. Suspected fraud should be kept strictly confidential. The suspicion should only be discussed with individuals responsible for investigating it. b) Inform the CEO immediately. If you feel the CEO was involved, inform HR. c) Investigation by Supervisory Committee. Suspected fraud should be reported to the Supervisory Committee, who should immediately investigate. To the extent necessary, the Committee may involve additional persons to assist it, such as: a. Credit Union Management b. External auditors c. NCUA Response: a) Initial Response: Remove Opportunity for additional fraud. When the Credit Union learns that an employee or official has committed fraud, the Credit Union will immediately remove any opportunity for commission of additional fraud. This initial response may require that the employee or official be transferred, relieved of their duties or suspended. b) Final Response: Termination or Suspension. The Credit Union’s final response may be termination or suspension. In determining the appropriate response, factors to consider include: nature of offense, dollar amount involved, effect on bond coverage, employment policy and state and federal employment laws and regulations. c) Notification: a) Law enforcement of incidents involving theft, embezzlement, forgery or other criminal offence. b) NCUA of any crime or suspected crime (NCUA form #2362, Suspicious Activity Report). c) Fidelity Bond insurance company.
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