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Anti-Fraud policy
1. Introduction
3. English Partnerships’ responsibilities
9. Conclusion
1. Introduction
1.1 The Agency requires all staff at all times to act honestly and with integrity and to safeguard the public resources for which the Agency is responsible.
1.2 Fraud is an ever-present threat to these resources and hence must be a concern to all members of staff and persons employed in a similar capacity. Fraud may occur internally or externally and may be perpetrated by staff, consultants, suppliers, contractors or development partners, individually or in collusion with others.
1.3 The purpose of this document is to set out your responsibilities with regard to fraud prevention, what to do if you suspect fraud and the action that will be taken by management.
2. Definitions of fraud
2.1 In addition to the existing common law offence of conspiracy to defraud, the Fraud Act 2006 provides for a general offence of fraud with three ways of committing it.
These are:
- Fraud by false representation
- Fraud by failing to disclose information
- Fraud by abuse of position
For the purpose of reporting fraud to HM Treasury the following are included in the fraud report: theft, false accounting, bribery and corruption, deception and collusion.
2.2 Computer fraud is where information technology equipment has been used to manipulate programs or data dishonestly (for example, by altering, substituting or destroying records, or creating spurious records), or where the use of an IT system was a material factor in the perpetration of fraud. Theft or fraudulent use of computer time and resources, including unauthorised personal browsing on the internet, is included in this definition.
3. English Partnerships’ responsibilities
3.1 Irrespective of the amount involved, the Financial Memorandum requires that all cases of attempted, suspected or proven fraud shall be reported to Communities and Local Government (CLG) on an annual basis. Where cases of a substantial, novel or unusual nature arise, these will be notified immediately to the Department. The Financial Memorandum also states that English Partnerships must:
- ensure it has suitable policies and practices in place to safeguard itself against fraud and theft
- ensure that it communicates its policy on fraud to staff in a formal policy statement
- prepare an annual report on fraud and theft
- Expect periodic checks by CLG on whether any new or suspected frauds have been detected.
3.2 Annex 4.7 of Managing Public Money states that an ‘organisation’s response to fraud risk should be customised to the risks it faces’. In accordance with its recommendations English Partnerships has:
- Developed an Anti-Fraud Policy and Fraud Response Plan
- Developed an anti-fraud culture
- Allocated responsibilities for the overall management of fraud risk
- Established well publicised avenues for staff to report their suspicions of fraud
- Measures the effectiveness of the fraud risk strategy
- Reports internal fraud to the Treasury
3.3 The Accounting Officer is responsible for managing English Partnerships' risks including fraud.
4. Manager’s responsibilities
4.1 The day to day responsibility for the prevention and detection of fraud rests with line managers who are responsible for:
- Identifying the risks to which systems, operations and procedures are exposed
- Developing and maintaining effective controls to prevent and detect fraud
- Ensuring that controls are being complied with.
4.2 Staff from Finance and Corporate Assurance are available to offer advice and assistance on control issues and managers are encouraged to make use of this service.
5. Staff responsibilities
5.1 All staff, including managers, are responsible for:
- Acting with propriety in the use of English Partnerships’ resources and in the handling and use of public funds whether they are involved with cash or payment systems, receipts or dealing with contractors, suppliers or customers
- Reporting details immediately to the Financial Accountant if they suspect or believe that there is evidence of irregular or improper behaviour or that a fraud may have been committed.
6. Fraud response plan
6.1 The Agency has prepared a Fraud response plan (see Annex A), which should act as a checklist of actions and a guide to follow in the event that fraud is suspected. It covers:
- Notifying suspected fraud
- The investigation process
- Liaison with police and external audit
- Initiation of recovery action
- Reporting process
- Communication with CLG.
7. Disciplinary action
7.1 In the case of proven fraud, or suspected fraud of a serious nature, English Partnerships reserves the right to refer the matter to the police at the earliest possible juncture.
7.2 Notwithstanding this, and following appropriate investigations, the Chief Executive will determine whether to invoke action in accordance with established disciplinary procedures.
8. Personal conduct
8.1 As stewards of public funds all staff must have, and be seen to have, high standards of honesty, propriety and personal integrity. Staff are required to report any potential conflict of interest to their Executive Director and the Chief Executive. Staff should not accept gifts, hospitality or benefits of any kind from a third party which might be seen to compromise their personal judgement and integrity. Further guidance on all aspects of personal conduct and the acceptance of gifts and hospitality is contained in current procedures and, specifically, the Terms and Conditions of Service.
9. Conclusion
9.1 English Partnerships views fraud very seriously. All instances will be investigated rigorously and promptly and appropriate action will be taken.
9.2 Further advice may be obtained from Jane Castor, Financial Accountant on 0191 497 7610.
Annex A: Fraud response plan
1. Introduction
1.1. This fraud response plan provides a checklist of actions and a guide to follow in the event that fraud is suspected. It covers:
- Notifying suspected fraud
- The investigation process
- Liaison with police and external audit
- Initiation of recovery action
- Reporting process
- Communication with CLG.
1.2 Its purpose is to define authority levels, responsibilities for action and reporting lines in the event of suspected fraud, theft or other irregularity.
2. Notifying suspected fraud
2.1. It is important that all staff are able to report their concerns without fear of reprisal or victimisation and are aware of the means to do so. The Public Interest Disclosure Act 1998 (the “Whistle-blowers Act”) provides appropriate protection for those who voice genuine and legitimate concerns through the proper channels.
2.2 In the first instance, any suspicion of fraud, theft or other irregularity should be reported, as a matter of urgency, to your line manager. If such action would be inappropriate, your concerns should be reported upwards to one of the following persons:
- Head of Department (or equivalent)
- EMB Director
- Director of Investment and Performance
- Chief Executive.
2.3 Additionally, all concerns must be reported to the Financial Accountant
2.4. Every effort will be made to protect an informant’s anonymity if requested. However, the Agency will always encourage individuals to be identified to add more validity to the accusations and allow further investigations to be more effective. In certain circumstances, anonymity cannot be maintained. This will be advised to the informant prior to release of information.
3. The investigation process
3.1. Suspected fraud must be investigated in an independent, open-minded and professional manner with the aim of protecting the interests of both the Agency and the suspected individual(s). Suspicion must not be seen as guilt to be proven.
3.2. The investigation process will vary according to the circumstances of each case and will be determined by the Chief Executive in consultation with the Director of Investment and Performance, the appropriate Executive Director and the Financial Accountant. An “Investigating Officer” will be appointed to take charge of the investigation on a day-to-day basis. This will normally be the Head of Operational Audit or, exceptionally, another independent manager.
3.3 The Investigating Officer will appoint an investigating team. This will normally comprise staff from within the Corporate Assurance team but may be supplemented with other resources from within the Agency or from outside.
3.4 Where initial investigations reveal that there are reasonable grounds for suspicion, and to facilitate the ongoing investigation, it may be appropriate to suspend an employee against whom an accusation has been made. This decision will be taken by the Chief Executive and/or Director of Investment and Performance, in consultation with the Head of Human Resources and the Investigating Officer. Suspension should not be regarded as disciplinary action nor should it imply guilt. The process will follow the guidelines set out in English Partnerships’ Terms and Conditions of Service relating to such action.
3.5 It is important, from the outset, to ensure that evidence is not contaminated, lost or destroyed. The investigating team will therefore take immediate steps to secure physical assets, including computers and any records thereon, and all other potentially evidential documents. They will also ensure, in consultation with management, that appropriate controls are introduced to prevent further loss.
3.6 The Investigating Officer will ensure that a detailed record of the investigation is maintained. This should include a chronological file recording details of all telephone conversations, discussions, meetings and interviews (with whom, who else was present and who said what), details of documents reviewed, tests and analyses undertaken, the results and their significance. Everything should be recorded, irrespective of the apparent significance at the time.
3.7 All interviews will be conducted in a fair and proper manner. Where there is a possibility of subsequent criminal action, the police will be consulted and interviews may be conducted under caution in compliance with the Police and Criminal Evidence Act (PACE), which governs the admissibility of evidence in criminal proceedings.
3.8 The findings of the investigation will be reported to the Chief Executive, Director of Investment and Performance and Head of Human Resources who will determine, in consultation with the Investigating Officer, what further action (if any) should be taken.
4. Liaison with Police & external audit
4.1. The police generally welcome early notification of suspected fraud, particularly that of a serious or complex nature. Some frauds will lend themselves to automatic reporting to the police (such as theft by a third party). For more complex frauds the Chief Executive, following consultation with the Director of Investment and Performance, Head of Human Resources and the Investigating Officer will decide if and when to contact the police. The Director of Investment and Performance will report suspected frauds to the external auditors at an appropriate time.
4.2. All staff will co-operate fully with any police or external audit enquiries, which may have to take precedence over any internal investigation or disciplinary process. However, wherever possible, teams will co-ordinate their enquiries to maximise the effective and efficient use of resources and information.
5. Initiation of recovery action
5.1 The Agency will take appropriate steps, including legal action if necessary, to recover any losses arising from fraud, theft or misconduct. This may include action against third parties involved in the fraud or whose negligent actions contributed to the fraud.
6. Reporting process
6.1 Throughout any investigation, the Investigating Officer will keep the Chief Executive, Director of Investment and Performance and Head of Human Resources informed of progress and any developments. These reports may be verbal or in writing.
6.2 On completion of the investigation, the Investigating Officer will prepare a full written report setting out:
- Background as to how the investigation arose
- What action was taken in response to the allegations
- The conduct of the investigation
- The facts that came to light and the evidence in support
- Action taken against any party where the allegations were proved
- Action taken to recover any losses
- Recommendations and/or action taken by management to reduce further exposure and to minimise any recurrence.
6.3 In order to provide a deterrent to other staff a brief and anonymised summary of the circumstances will be published on intrepid.
7. Communication with CLG
7.1 Irrespective of the amount involved, the Financial Memorandum requires that all cases of attempted, suspected or proven fraud shall be reported to CLG.
7.2 In addition, CLG requires an annual return of all losses arising from fraud together with details of:
- All cases of fraud perpetrated within the Agency by members of its own staff, including cases where staff acted in collusion with outside parties
- All computer frauds against the Agency, whether perpetrated by staff or outside parties
- All cases of suspected or proven fraud by contractors arising in connection with contracts placed by the Agency for the supply of goods and services.
7.3 The Financial Accountant is responsible for preparation and submission of fraud reports to CLG.
Annex B: Dos & Don’ts
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Do |
Don't |
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Make a note of your concerns |
Be afraid of raising your concerns |
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Retain any evidence you may have |
Convey your concerns to anyone other than authorised persons |
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Report your suspicions promptly |
Approach the person you suspect or try to investigate the matter yourself |
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© English Partnerships 2003-2008