Four-Part Test for Reportability

Reportability under SAM 20080 can be thought of as a four-part test:

Actual loss of
$950 or more of
Public (state) funds because of
A reportable impetus
1. Misuse/Theft: Intentional use of public resources for an improper purpose or taking public resources without consent.
2. Fraud: Intentional or criminal deception using public resources intended toresult in financial or personal gain.
3. Damage: Intentional acts impairing the value, usefulness, or function of public resources.
4. Improper Contract/Procurement Activities: Inappropriate activities related to vendor selection, performance, or billing.
5. Employee Misconduct: Willful, improper, or unethical employee behavior that violates policies and laws affecting the state's best interests.
6. Error: Unusual events causing impairment or inaccuracy. To be an error, it must be unintentional.

You may exclude auxiliaries from the rollout of collection mechanisms for this reporting and focus on stateside actors and departments. However, if your collection mechanisms reveal a confirmed loss of public (state) funds greater than $950, you should include it. Do not report errors or losses of auxiliary funds and resources.

Note that types of loss and errors is based on how the loss happened. A reportable act, accident, or error that leads to a regulatory fine, an insurance claim, or a need to expend resources to replace damaged property is a reportable loss. Conversely, there could be a fine, insurance claim, or need to expend resources to replace property that isn’t because of a reportable act, accident, error. In the examples that follow, stay focused on the cause of the loss.

Guidance on Condition 1: Actual Loss

Sometimes a determination of a qualifying unrecoverable loss may be made substantially after the fact, as in the case of errors discovered during an internal audit. Regardless of the delay between when the loss may have occurred and when the determination was made, report an actual loss that is discovered on or after September 16, 2025.

Examples of things that you are not required to report (at least not yet) because of the requirement that there be an Actual Loss:

Vendor or Employee overpayments or duplicate payments while they are in accounts receivable. (However, you would report them, because they were erroneous, at the point where the A/R balance is written off as a loss, if that loss is greater than $950).
Recovered assets
Pending lawsuits (You would report settlement payouts at the time payment is made, assuming that the remaining elements are met: the amount is greater than $950, payout is made with public (state) funds, AND there was some employee misconduct, error, misuse, damage, etc. that was the cause of the events)

Guidance on Condition 2: Minimum Amount of $950

Determining the amount of the loss can be challenging. Using your best judgment, you may use whatever value is most readily available at the time the asset is lost, stolen, or written off the books, including book value (purchase price less depreciation), replacement cost, or fair market value. Where multiple means of assessing value associated with an item exist, and conflict, fair market value amount should be used, for consistency with past guidance around similar questions in the context of EO 1104 reporting.

For property damage due to negligence or intentional acts, you should also estimate the most readily available and/or practical value. Cost to repair, if applicable, or the value of the entire asset if written off as a total loss.

The SAM reporting requirement is intended to catch control failures, and that doesn’t necessarily have to be parsed out to each single transaction. You are permitted to immediately exclude any loss less than $950, for failure to meet condition two. However, if the information is aggregated as part of your normal business process, you do not need to disaggregate it in order to 1) enumerate them individually, and 2) weed out those that are less than $950. SAM 20080 allows flexibility in determining how to aggregate information. Choose whatever is easiest for you and your colleagues’ normal business processes.

Example of the flexibility permitted in defining aggregation:

$4,000 is lost, due to four consecutive erroneous $1,000 monthly payments made to a fraudulent account, which were unable to be recovered. You meet the requirement whether you report four incidents of $1,000 each, or one incident resulting in a loss of $4,000. It is your choice, and please choose whatever is most convenient. However, do not aggregate completely unrelated losses.

Guidance on Condition 3: Public (State) Funds

Public (State) funds include, but are not limited to: general fund appropriations, enterprise funds (such as parking revenues), capital projects funds, debt service funds, student tuition and fees. All funds included in the university's financial statements are state funds. See the DOF’s Uniform Codes Manual for a complete listing.

Examples of things that you are not required to report because of the requirement that the loss be a loss of public (state) funds:

Losses of auxiliary funds, property, or assets
Personal belongings of a student or employee being reported stolen
Unauthorized systems access that does not lead to a loss, or the loss is of student balances, etc., rather than of public (state) fund
Settlement payouts in excess of $10 million. These are funded by reinsurance/excess insurance, and are not public (state) funds

Guidance on Condition 4: Reportable Impetus for Loss

The DOF provided six categories of reportable losses, listed on page 2.

Examples of things you are not required to report because the loss was not the result of a reportable impetus:

Salary advance write-offs, where appropriate collection efforts were made. (This is not reportable per the DOF FAQ. It can be distinguished from vendor or employee overpayments or duplicate payments because there wasn’t an error, the original payment was made intentionally).
Non-returned IT or similar equipment, where appropriate collection efforts were made. (This seems similar to the above example, and different from theft of IT equipment.
Write-offs of missing equipment or goods, or inventory discrepancies, discovered during a routine inventory review. (Since discrepancies found in a routine review may not come with clues as to the cause of the discrepancy, this routine process should be excluded from SAM 20080 tracking. It may be that product was lost through theft or error, but it also may be that the original bookkeeping was erroneous and no actual loss occurred. Because SAM 20080 focuses on actual losses or errors, inventory discrepancies without verified causation should not be reported.)
Insurance claims, or losses resulting from settling or losing civil suits, where there was no misuse, error, or employee misconduct that caused the accident, regardless of the funding source for the settlement payout.
Payments for goods/services not received IF it does not involve employee misconduct or error: For example, procard purchases do not have a step requiring
verification of delivery/receipt. (Unlike the example below, if the payment was made via a procard, there may not be any employee error that precipitated the loss.)

Examples of actual losses of public (state) funds that we would count because there was a reportable act, accident, or error:

Payments for goods/services not received IF it involves employee misconduct or error. For example, for PO’s, payment requires a step of confirming receipt. (This would count, assuming that the required step in the procurement process of confirming receipt must have been missed, mistaken, or circumvented, if it was marked received and was not in fact received.)
Stolen property from a lab, meaning there are unrecovered, missing assets, plus a determination in the investigation that a theft occurred (unlike the routine inventory example above).
Lost property or assets where the report indicates error or misuse as the cause (unlike the routine inventory example above).
Actual losses resulting from noncompliance with bidding procedures, leading the university to incur higher costs than if a lower-priced vendor had been selected (Do not project opportunity costs, include only actual losses).
Fines/penalties because of willful non-compliance or violations.
Fines/penalties because of unintentional/erroneous non-compliance or violations.
Improper Travel Reimbursements (unrecovered-if returned it is not an actual loss).
Cell phone charges due to improper use of company cell phone during a recreational trip abroad (unrecovered-if reimbursed it is not an actual loss).
All applicable actual losses and errors resulting in losses of public (state) funds greater than $950, including actual losses resulting from fiscal improprieties over $5,000. Note this means that a handful of incidents each year will be reported both to compliance and to Audit and Advisory Services via the EO 1104 reporting.
Losses (insurance deductibles, replacement of vehicle) associated with a vehicular accident where the employee was improperly using a university vehicle for recreational purposes, if the resulting loss is of public (state) funds.
Losses (insurance deductibles, settlement payouts) where an employee or student is injured due to negligence, or fault of the university such as slip and fall, unsafe working conditions, or lab accidents. (This is reportable when paid, only if the accident is due to errors or non-compliance, and if the resulting loss is of public (state) funds.)