DEPARTMENT OF THE NAVYHEADQUARTERS UNITED STATES MARINE CORPS
WASHINGTON, DC 20380-0001
NAVMC 2768FDR-30/rjc17 June 1991
This handbook is designed to heighten the awareness ofcommanders and functional managers to the potential for fraud andwaste within their activities. Commanders are responsible toensure functional managers are aware of the contents of thispublication.
NAVMC 2768 of 27 June 1983.
Our common objective is the detection and prevention of fraudand waste. This is possible only through a combination ofincreased sensitivity on the part of commanders and resourcemanagers to those activities indicative of fraud and waste, andthe swift and accurate application of resource, evaluation andanalysis staff (REA), inspection, law enforcement, investigativeand legal expertise.
Each member of the Marine Corps community must be committedto fighting fraud and waste. Although the Inspector General ofthe Marine Corps has been designated as the Marine Corps focalpoint in combating these problems, the ultimate success or failureof the program rests upon the involvement of each Marine Corpscommander and manager.
You are encouraged to use this handbook and to seekprofessional support when you recognize the potential for fraudand waste in your area of responsibility.
Recommendations are invited and should be submitted toCommandant of the Marine Corps (FDR).
7. RESERVE APPLICABILITY
This Handbook is applicable to the Marine Corps Reserves.
DEPARTMENT OF THE NAVYHEADQUARTERS UNITED STATES MARINE CORPS
WASHINGTON, DC 20380-0001
Reviewed and approved this date.
E. T. ComstockFiscal Director of the Marine Corps
DISTRIBUTION: PCN 1000345700
Copy to: 7000050 (200)
SPECIAL HANDLING INSTRUCTIONS
LOCAL REPRODUCTION OF THIS HANDBOOK IS NOT AUTHORIZEDADDITIONAL COPIES ARE AVAILABLE FOR OFFICIAL USE ONLY FROM MCLBALBANY WITH THE WRITTEN APPROVAL OF THE COMMANDANT OF THE MARINECORPS, (CODE FDR).
THIS HANDBOOK IS NOT TO BE RELEASED OUTSIDE OF THE MARINE CORPSWITHOUT THE PRIOR APPROVAL OF THE COMMANDANT OF THE MARINE CORPS.INQUIRIES CONCERNING THIS HANDBOOK SHOULD BE ADDRESSED TO THECOMMANDANT OF THE MARINE CORPS (CODE FDR), WASHINGTON, D.C. 20380,AUTOVON 224-4500.
Combating fraud and waste is a personal and professionalresponsibility. A number of significant events have occurred inrecent years to heighten public awareness of fraudulent,wasteful, or abusive activities within the Federal Government.From the President on down, a number of actions have been takenor are planned to counter these activities. The most importantelement in this fight is you--the commander or functionalmanager. Without your full cooperation, we cannot succeed in ourfight against fraud and waste.
The key to prevention and detection of fraud and waste is arecognition of conditions that allow these practices to goundetected. For the commander or functional manager, there are"indicators" of these conditions which provide the initialwarning and show the need for further attention. It is importantto remember that these indicators often appear on the surface asminor administrative or managerial irregularities; therefore, youshould look below the surface.
Each indicator set forth in this handbook is taken fromaudits, inspections, and investigations. In a number of cases,the functional manager's recognition of the indicator was theprimary reason fraud and waste was uncovered.
This handbook provides a list of indicators that you, ascommander or functional manager, can use in overseeing youroperations. Your participation in this effort is encouraged.The handbook is not meant to be all-inclusive by any means. Ifyou have indicators that you feel should be added to the list,send them to the Commandant of the Marine Corps (Code FDR)Washington, D.C. 20380.
A Word of Caution: Due to the explicit manner in whichthis handbook is written, there is a potential for misuse of theinformation. Although it is vitally important that theindicators be given to the right people, it is equally importantthat you ensure this information is not disseminated in such amanner that it will be misused by unscrupulous individuals.Additionally, the indicators are not evidence that fraud or wasteexists. They are simply situations which may need further reviewto determine if Marine Corps resources are being lost. Duringthis "further review" process, you are encouraged to use commandresource, evaluation and analysis (REA), investigative, legal,law enforcement, and inspection resources available to you.
This chapter discusses the unique, yet strategicallyimportant role of the Marine Corps Commander in preventing anddetecting fraud, waste, and abuse in Marine Corps activities andoperations. While overall responsibility for combating fraud,waste and abuse is a function of command, most command positionsare sufficiently broad as to preclude the detailed day-to-daypersonal involvement needed to detect fraudulent, wasteful andabusive actions. The commander is ultimately responsible whenthese actions occur.
The other chapters in this Handbook provide a number ofspecific suggestions for detecting and preventing potentialfraud, waste, and abuse. Because these suggestions require in-depth involvement, the busy commander must normally rely onsubordinate managers and staff to ensure the suggested actionsare taken.
This chapter provides 10 suggestions for fulfillingcommanders1 responsibilities in the fraud, waste, and abuse area.The suggestions are, by their nature, broad because commandersresponsibilities are broad. They are, however, the result ofspecific observations made by inspectors, investigators, andResource, Evaluation and Analysis Staff (REA) when dealing withfraudulent or wasteful conditions.
1. Commander's Attitude Toward Fraud, Waste, and AbusePrevention and Detection. Attitudes and actions of subordinateunits and personnel often mirror those of the commander. When acommander chooses to emphasize or pay particular attention tospecific areas, people under the commander will generally followsuit. Conversely, commanders who consciously or unconsciouslyde-emphasize or ignore particular areas may find later that theseareas have also been neglected by their subordinates. The samesituation exists for fraud, waste, and abuse. A commander whodownplays the importance of detection and prevention may laterfind the same attitude existing throughout the command. As aconsequence, the vulnerability to fraud, waste, and abuseincreases.
Suggested Action: Recognize that no activity is immune fromfraud, waste, or abuse. Promote through sincere attitude andactions a positive attitude among subordinates toward preventionand detection. In dealing with subordinates, recognize negativeattitudes toward the program. (A common attitude is that thewhole program is "political".) Further, recognize that areaswhere negative attitudes exist are often the most susceptible tofraud, waste, and abuse. Commanders should publish a policy
statement on what fraud is and that fraud will not be tolerated.This policy where applied by private corporations regardingthefts, has resulted in a decrease in losses.
2. Importance of Standard Procedures and Controls. Over theyears, the Marine Corps has adopted numerous procedures andcontrols which are designed to protect and safeguard resources.When properly followed and practiced, these procedures andcontrols significantly reduce an activity's susceptibility tofraudulent and wasteful actions. Conversely, REA, inspectors andinvestigators have found that most fraud and waste occurs whenactivities have been allowed to deviate from normal controlprocedures. In addition, two common reasons have been found fordeviations, either people did not understand the reasons for thecontrol or procedure, or deviations were permitted to "get thejob done."
Suggested Action: Insist on adherence to standard procedures andcontrols. When deviations are necessary to fulfill missionrequirements, ensure subordinates understand that the deviationis only temporary. When temporary deviations are permitted tofulfill mission requirements, provide an additional controlthrough special attention to the area. Ensure the activityreturns to normal operations as soon as possible. When thereasons for specific procedures and controls are not understood,find out why the procedures or controls exist and explain thereasons. (Call on the REA staff and investigators to explain thereasons.)
3. Use of Trend Reports to Monitor Operations. Evaluation ofstatic information does not normally disclose indications ofpotential fraud or waste. Rather, the evaluation of informationover a period of time is more likely to disclose significantproblems. Two conditions are often indicative of fraudulent orwasteful practices: (1) sudden or dramatic shifts in trends, and(2) persistent deviations from a known norm or standard.Examples include:
- a sudden increase in expenditures in a given activity.
- a sudden shift in an activity's ability to fulfill mission.
- persistent inventory losses in a supply operation.
- a sudden increase in absenteeism or a perceived drop in morale.