7-1951: County Fraud Policy

Purpose

The purpose of this policy is to establish a framework for the Department of Finance (DOF) under which the Director of Finance (as Auditor Controller) is to administer and operate the whistleblower Hotline. The Whistleblower Hotline provides a confidential mechanism for receiving reports of fraud, waste, abuse, or other improper government activity and for ensuring that such reports are appropriately reviewed and investigated.

This policy is intended to promote transparency and accountability, support ethical government operations, and safeguard public trust in Sacramento County government by helping to prevent financial loss, operational harm, and reputational risk to the County.

Authority

Government Code Section 26883
Government Code Section 53087.6
California Fair Political Practices Commission
County of Sacramento Code of Ethics
Board of Supervisor Resolution 2026-0107

Scope

The policy applies to reports alleging fraud, waste, abuse, or other improper government activity involving Sacramento County operations, programs, employees, officers, or use of County resources.

This policy applies to County employees, former employees, contractors, vendors, and members of the public who submit reports through the Whistleblower Hotline.

Policy

The County is committed to maintaining an ethical, transparent, and accountable workplace. Employees and members of the public are encouraged to report, in good faith, any suspected violations of law, policy, misuse of public resources, fraud, waste, abuse, or other improper conduct.

County employees who make a protected disclosure, participate in an investigation, or otherwise assist in an inquiry related to such reports are protected from retaliation. Retaliation against an employee for engaging in protected whistleblower activity is strictly prohibited and will not be tolerated.

Department Responsibilities

Each County Department is responsible for establishing internal controls to prevent and detect fraud, waste, abuse, and any other irregularities. Department management is also responsible for taking appropriate action to remedy any known fraud, waste, abuse or improper activities.

Each member of the department’s management team should be familiar with the types of improprieties that might occur in their area of responsibility and shall adopt procedures and internal controls to prevent and detect potential fraud, waste, and abuse, and be alert for any indication of improper activities.

Actions Constituting Fraud, Waste, and Abuse

The terms misappropriation and other fiscal irregularities refer to but are not limited to any dishonest or fraudulent act; forgery or alteration of any document of account; accepting or seeking anything of material value from vendor(s) or person(s) providing services or materials to the County; destruction or disappearance of records or fixed assets; or any similar or related irregularity.

Below are some examples of potential Fraud, Waste and Abuse:

Examples of Fraud:

computer fraud;
contractor or management improprieties;
theft of cash or equipment;
misuse of County property and equipment including vehicles;
incorrect reporting of work hours;
alteration of or falsifying documents;
bribery and acceptance of gratuities.

Examples of Waste:

purchase of duplicate or unnecessary items;
failure to follow bidding processes resulting in higher costs;
inefficient inventory management leading to over-purchasing or underutilization of assets;
unused equipment or resources due to poor tracking systems.

Examples of Abuse:

inappropriate access of confidential information;
splitting purchases to circumvent procurement limits or approval thresholds;
accepting gifts or favors from County vendors or contractors;
excessive use of County resources beyond reasonable needs;
misuse of delegated purchasing authority.

Reporting Procedures

Any fraud, waste, abuse, or improper government activity that is detected or suspected must be reported immediately to the Department of Finance, Auditor-Controller Division, Internal Audits Unit using the below contact information:

Fraud Hotline: 916-874-7822, Email: audits@saccounty.gov

When making a report, the reporting individual should include as much detail as possible so there can be a full investigation. Include details such as who, what, where and when for the reported instance.

If requested and contact information is provided, an initial contact will be made within five business days of reporting date. The names of those reporting fraud are kept confidential to the fullest extent of the law and reports can be made anonymously.

The reporting individual must adhere to the following restrictions:

not contact the suspected individual in an effort to determine facts or demand restitution, and
not discuss the case, facts, suspicions, or allegations with anyone outside unless specifically asked by the Auditor-Controller, or individuals within the department who have a legitimate need to know.

All inquiries from the suspected individual and/or designated representative should be directed to the Auditor-Controller. Proper response to such an inquiry is: “I am not at liberty to discuss this matter.”

Great care shall be taken in the investigation of suspected improprieties so as to avoid mistaken accusations, alerting suspected individuals that an investigation may be under way, and to minimize legal, financial, and reputational risk.

Non-fraud Improper Activities

Identification or allegations of personal improprieties (i.e. those that are not related to the County or County services), whether moral, ethical, or behavioral, should be resolved by department management and the Department of Personal Services.

If there are any questions as to whether an action constitutes fraud, waste, or abuse, contact the Director of Finance (in role as Auditor-Controller) or the Fraud Hotline for additional guidance.

Referrals

The Director of Finance or their delegate may refer calls received on the whistleblower hotline to the appropriate government authority of review and possible investigation.

For example:

Department of Human Assistance operates a Welfare Fraud Hotline,
In-Home Supportive Services (IHHS) operates an IHSS Fraud Hotline, and
District Attorney operates an Insurance Fraud and a Real Estate Fraud Hotline.
SHRA operates a Housing fraud hotline.

After referral to the appropriate agency, the Director of Finance or their delegate has no obligation to continue to investigate and may close the case, as appropriate.

Investigation Responsibilities

The Director of Finance and/or their delegate(s) have the primary responsibility for the fiscal investigation. If the investigation reveals that the fraudulent activities have occurred, the Director of Finance (serving as Auditor-Controller) shall refer the matter to the District Attorney for review or to other appropriate law enforcement agencies.

Decisions to prosecute will be made after a review by the County Executive Office, Department of Personal Services, County Counsel, and the Department.

Confidentiality

The Department of Finance will maintain all information on a confidential basis for any employee who suspects dishonest or fraudulent activity. The individual should report the incident immediately. No attempt to personally conduct investigations or interview/interrogations related to suspected fraud should occur (see Reporting Procedure section above).

The results of investigations conducted by the Department of Finance will not be disclosed or discussed with anyone other than individuals associated with the County Department who have a legitimate need to know to perform their duties and responsibilities. This is important to avoid damaging the reputations of individuals suspected but subsequently found innocent of wrongful conduct and to protect the County from potential liability.

Authorization for Investigating Suspected Fraud

In instances where the Auditor-Controller determines it is in the County’s best interests, members of the Department of Finance, Internal Audits Unit have the authority and responsibility after consulting with appropriate management, to:

take control of, and/or gain full access to all departmental premises, whether owned or rented; and
examine, copy, and/or remove any portion of the files, desks, cabinets, phones, computers, and other storage facilities on the premises without prior knowledge or consent of any individual who may use or have custody of such items or facilities.

Discipline or Termination

Substantiated allegations of fraud may result in disciplinary action, up to and including termination.

Administration, Tracking, and Reporting

The Director of Finance is responsible for the administration, interpretation, and application of this policy and procedure.

The Director of Finance or designee should track each report on the Fraud Hotline from receipt through disposition. Reports shall be provided to the Sacramento County Audit Committee, as needed.