Item 13.2 - Attachment 1

Draft Fraud and Corruption Prevention Policy

 

 

                         

 

Fraud and Corruption Prevention Policy – Draft

Policy Number ##

 

 

1. Background

Parramatta City Council is committed to high ethical standards.  We have a responsibility to protect taxpayer funded resources and assets from fraud and corruption and to ensure that our decisions and actions are free of any corruption.

 

 

 

2. Scope

This policy provides guidance as to the Council’s actions and expectations in relation to fraud and corruption and the responsibilities of Councillors and employees for dealing with the risks of fraud and corruption.

 

 

 

3. Objectives

The Fraud and Corruption Prevention Policy provides Council’s strategic approach to fraud and corruption prevention, detection and investigation.

 

The Fraud and Corruption Prevention Policy aims to reduce the likelihood of employees, Councillors and members of the public acting in a fraudulent or corrupt manner towards Council or its employees and representatives.

 

 

4. Related Legislation, Policies and Strategies

 

·  Local Government Act 1993

·  Crimes Act 1900

·  Independent Commission Against Corruption Act 1988

·  Protected Disclosures Act 1994

·  Guiding Principles

·  Code of Conduct

·  Whistleblowers Protection Policy

·  Customer Compliments and Complaints Policy

·  Performance Counselling and Disciplinary Policy

·  Policy for Interaction Between Councillors and Staff

·  Fraud and Corruption Prevention Strategy

 

5. Policy Statements

 

5.1 Responsibilities

 

5.1.1 Employees and Councillors

 

Employees and Councillors have the following responsibilities:

 

·       report all instances of suspected fraud or corrupt conduct in accordance with Council’s Code of Conduct and Internal Reporting Policy (Whistleblowers Protection Policy)

 

·       report any attempts at fraud or corruption.  This includes any corrupt inducements offered or hinted at.

 

·       not to take detrimental action against any individuals reporting fraud, corruption, maladministration or serious and substantial waste.  They must protect colleagues from detrimental action if they are aware of colleagues who have made any reports.

 

·       operate systems of internal control to prevent and detect fraud or corruption in accordance with instructions and established procedures

 

·       to provide cooperation and undertake relevant training to aid in the prevention, detection and investigation of fraud and corruption

 

·       provide cooperation and assistance to investigators or officials investigating suspected or reported fraud or corruption

 

 

5.1.2 Managers and Team Leaders

 

Managers and team leaders have the following responsibilities, in addition to the responsibilities that they have as employees:

 

·       take appropriate measures to ensure that their staff understand the standards of expected behaviour as outlined in the Guiding Principles, Council’s Code of Conduct, and relevant policies and procedures

 

·       ensure that all reports made to them of suspected fraud or corruption, maladministration and serious and substantial wastage are referred to the Manager, Service Audit & Review who carries out the role of Corruption Prevention Coordinator, or the Chief Executive Officer without delay.  If a report is received orally, it should be clearly documented.

 

·       maintain the confidentiality of people making reports and the subject matter of reports, insofar as practical and in conformity with the instructions of the investigator

 

·       ensure that employees who have reported in accordance with the reporting procedure are not disadvantaged or suffer detrimental action

 

·       identify and assess the risks of fraud and corruption in their area of responsibility

 

·       ensure that reasonable internal controls have been implemented to address these risks, and monitor the continued operation of controls to prevent and detect fraud and corruption in their area

 

·       provide leadership in the area of ethics and the minimisation of fraud and corruption

 

·       undertake regular reviews and checks to detect irregularities

 

·       use basic data mining tools to detect possible fraud and corruption

 

·       ensure that all employees and Councillors have been made aware of the fraud control policy document and its contents, and that the policy is readily available for them

 

·       ensure that contractors and consultants employed by the Council are bound contractually to comply with appropriate ethical standards, including reporting any suspected or alleged fraud or corruption

 

 

5.2 Risk Assessment Reviews

 

As managers at all levels in the Council are primarily responsible for fraud and corruption prevention and detection, they should conduct fraud and corruption risk assessments in their area of responsibility.  Appropriate measures must be implemented to reduce the risks to a minimum level.  Risk assessments must be undertaken at least every two years, and more frequently in areas of high risk of fraud and/or corruption.

 

 

5.3 Employee and Councillor Awareness

 

Employees and Councillors must understand that fraud and corruption are unacceptable in or against the Council.  Fraud and corruption control is the responsibility of every person.

 

All managers and supervisors need to be aware of the behaviours that could result in corruption, either real or perceived.

 

Council will provide guidance and training to enable employees and Councillors to be able to prevent and detect fraud and corruption in accordance with this policy.

 

 

5.4 Customer and Community Awareness

 

We should promote awareness among the community, customers, contractors, suppliers and other third parties that fraud and corruption against the Council is unacceptable.

 

Relevant managers and staff are to ensure that it is easy for third parties to report any suspected fraud or corruption.  Once a report is made to a volunteer or employee then he or she is to report this in accordance with the policy for reporting corruption, maladministration and serious and substantial waste.

 

 

5.5 Reporting Suspected Fraud or Corruption

 

Ignoring fraud or corruption is tantamount to endorsing it.  Ignoring fraud or corruption and turning “a blind eye” can lead to it becoming acceptable behaviour that can taint whole sections of the organisation.  Reporting fraud and corruption is an obligation imposed by honesty.

 

Councillors and staff are required to report any suspected fraud or corruption.  The requirement is contained in the Code of Conduct and the Council’s Internal Reporting Policy.

 

Managers are to ensure that staff and Councillors are supported in reporting suspected fraud and corruption, and have easy access to the reporting policy.

 

 

5.6 Detection Systems

 

Managers are responsible for establishing, documenting and maintaining appropriate fraud and corruption controls and detection systems in their areas.  Regular internal audits are also undertaken to detect fraud and corruption.

 

 

5.7 External Notification

 

Crimes committed against the Council will be reported to the police and any corruption will be reported to the Independent Commission Against Corruption on the authority of the Chief Executive Officer.  Other external authorities will be notified of fraudulent or corrupt conduct as appropriate.

 

 

 

5.8 Investigations

 

All suspected or alleged fraud or corruption will be investigated.  All employees and Councillors are to cooperate fully in such investigations.  Investigations are undertaken under the direct authority of the Chief Executive Officer in accordance with appropriate investigation standards and the principles of natural justice.

 

 

5.9 Conduct and Discipline

 

All Councillors and employees are to carefully read, understand and observe the Code of Conduct.

 

Fraud and corruption is unacceptable and offenders will face disciplinary action in accordance with Council’s Code of Conduct.  In addition criminal prosecution will be undertaken and civil and administrative action instituted to recover any losses to the Council, as appropriate.

 

 

 

6. Definitions

 

6.1 Fraud is:

 

dishonest activity causing actual or potential financial loss to any person or entity including theft of moneys or other property by employees or persons external to the entity and whether or not deception is used at the time, immediately before or immediately following the activity.  This also includes the deliberate falsification, concealment, destruction or use of falsified documentation used or intended for use for normal business purposes or the improper use of information or position.

 

6.2 Corrupt Conduct is:

 

·       conduct of a person (whether or not a public official) that adversely affects, or could affect the honest and impartial exercise of public official functions, or

·       conduct of a public official that involves the dishonest or partial exercise of any of his or her public official functions, or

·       a breach of public trust, or

·       the misuse of information or material acquired in the course of a public official’s functions.

 

Additionally corrupt conduct can also be conduct of any person (whether or not a public official) that adversely affects or could affect the exercise of official functions and involves conduct such as bribery, blackmail, fraud, forgery and various other crimes.

 

For conduct to be corrupt it must be covered by one of the conditions above and also any one of the following:

·       a criminal offence; or

·       a disciplinary offence; or

·       reasonable grounds for dismissal or dispensing or terminating the Councils of a public official.

 

 

 

7. Administration

 

7.1 Authorisation

This policy was adopted by Council on XX/XX/2009.

 

7.2 Review

This policy is scheduled for review eighteen months after its authorization, and every twelve months thereafter.

 

7.3 Version

0.1

 

7.4 Owner

The Service Audit & Review Unit is responsible for this policy