I. Purpose of Policy
The Executive Board of SEIU Local 99 acknowledges their status as fiduciaries and further acknowledges its role as the steward of union assets. To help to insure that the funds intended to be provided are actually spent on behalf of members and not fraudulently misappropriated, and to help to insure that union funds are used only to pay valid union debts and not fraudulently misappropriated, the Executive Board hereby adopts this policy to prevent, deter, and detect any fraudulent misappropriation of funds that are due the union or funds that are to be used to pay union debts.

II. Scope of Policy
The Executive Board in this policy intends to:

1. Identify and assess risks of fraud;
2. Create a culture of honesty;
3. Implement procedures to prevent, deter, and detect fraud; and
4. Implement an anti-fraud oversight process.

III. Identification and Assessment of Material Risks of Fraud Against the Union 
The Executive Board identifies two major categories of fraud risk: (1) the risk that funds due to the union are underpaid because of fraud and (2) the risk that union funds are not used to pay valid union debts but are instead fraudulently misappropriated.

The Executive Board considers fraud, while not necessarily a major existing problem, is sufficiently possible as to require the implementation of measures in each of these areas to prevent, deter, and detect fraud against the union.

IV. Identification of Anti-Fraud Stakeholders
The Executive Board will coordinate, to an appropriate degree, with other stakeholders who have an interest in preventing, deterring and detecting fraud, including:

1. Membership of SEIU Local 99;
2. Executive Board of SEIU Local 99;
3. SEIU International;
4. SEIU Local 99 Executive Director;
5. The union’s staff; and
6. The union’s independent auditors.

V. Maintenance of a Culture of Honesty
The Executive Board recognizes that fraud often occurs in a context where honesty and ethical conduct are not valued. Although creating a culture of honesty is a complex undertaking, the Executive Board adopts the following as important steps in creating an ethical culture:

1. The Executive Board will adopt SEIU International’s code of conduct;
2. The Executive Board will notify members periodically of the existence of this code; and
3. The Executive Board will periodically ask the Executive Director whether:
   • The code of conduct has been implemented;
   • Employees are trained regarding ethical conduct; and
   • Ethical employees are hired and promoted.

VI. Prevention of Material Fraud Against the Union
The Executive Board will periodically inquire whether the Executive Director has the following practices or procedures in place:

1. Adoption of an anti-fraud policy;
2. Implementation of anti-fraud personnel policies, including mandatory vacations;
3. Implementation of an anti-fraud whistleblower program;
4. Implementation of internal financial controls, including but not limited to:
   • Independent checks by second employees of the work of accounts payable employees;
   • Separation of duties of employees who issue checks from those who process accounts payable;
   • Limit access to union documents, including password protection on computer files, limits on check signing, and physical safeguards on blank check stock; and
   • Timely performance of bank reconciliations by individuals separate from the accounts payable function.
5. Requiring annual audits by independent, external auditors and notifying the trust of any deficiencies in the implementation of anti-fraud controls identified by the auditor and the response thereto; and
6. Implementation of measures to confirm and verify accurate expense reports and financial controls over purchasing.

VII. Deterrence of Material Fraud Against the Union
The Executive Board recognizes that applying appropriate sanctions against an employee apprehended for fraud, including suspension or termination or referral to law enforcement authorities, may deter other employees from committing fraud. Accordingly, the Executive Board will request the Executive Director to consistently inform staff of the anti-fraud enforcement policy.

VIII. Detection of Material Fraud Against the Union
The Executive Board recognizes that its external auditor possesses a duty to the union with respect to the detection of material fraud. The Executive Board will instruct its external auditor to include in its annual audit an assessment of anti-fraud controls within the union. An anti-fraud component is to be included in the union’s financial audit.

The Executive Board further recognizes that a whistleblower and conflict of interest program is a further means to detect fraud. The Executive Board adopts the whistleblower and conflict of interest program outlined in the attached document. The program will be publicized on the SEIU Local 99 website. The Executive Board will annually ask about the implementation of the whistleblower program and how it is communicated to employees.

IX. Oversight of Union’s Anti-Fraud Program
The Ethics Liaison will have the primary responsibility for overseeing SEIU Local 99’s anti-fraud program. The Ethics Liaison will follow procedures as outlined by the SEIU International’s Code of Ethics and SEIU Local 99 Code of Conduct.

X. Policy Review
The Executive Board will periodically review this policy, the implementation of this policy, and issues of fraud prevention, deterrence, and detection.

Adopted: September 18, 2010