DGD13-044
FRAUD AND CORRUPTION CONTROL PLAN
Contents
1.EXECUTIVE SUMMARY
1.1Introduction
1.2The Organisation
2.OVERVIEW
2.1Background
2.2Definition of fraud and corruption
2.3Objective
2.4Organisation Culture
3.FRAUD AND CORRUPTION CONTROL PRINCIPLES
3.1Responsibilities for Fraud and Corruption Management
3.2Functional Responsibilities, Strategies and Actions
3.3Internal Controls and Internal Audit
3.4Ethics
4.VULNERABILITIES TO FRAUD AND CORRUPTION
4.1Potential fraud threats
5.REPORTING AND CASE HANDLING
5.1How to report suspected fraud or corruption
5.2Confidentiality
5.3Public Interest Disclosure
5.4Preliminary Case Handling
DGD13-044
1.EXECUTIVE SUMMARY
1.1Introduction
ACT Health has prepared this Fraud and Corruption Control Plan (Plan) to assist our staff in the management of fraud and corruption in accordance with ACT Health’sFraud and Corruption Control Policy.A Fraud and Corruption Prevention Plan is a key part of the governance framework for any organisation. Fraud and corruption can impact on the ability of an organisation to achieve its objectives. An effective plan can assist management in:
- preventing fraud and corruption,
- ensuring any fraud which does occur is detected, and
- conducting an effective fraud investigation to resolve allegations of fraud or corruption which may arise.
1.2The Organisation
ACT Health aims to achieve good health for all residents of the Territory by planning, purchasing and providing quality community-based health services, hospital and extended care services, managing public health risks and promoting health and early care interventions.
ACT Health is structured into three levels in line with its organisational business planning; performance and reporting structure see Figure 1– Governance Definitions
- Tier 1:Organisational Level
- Tier 2: Divisional Level
- Tier 3: Team Level
Figure 1 – Governance Definitions
2. OVERVIEW
2.1Background
Residents of the ACT must be able to trust and have confidence in the integrity of the ACT Public Service and have a realistic expectation that employees will not abuse their office and will fulfil their responsibilities to protect public money and property. Fraud, waste and mismanagement are unacceptable and have the potential to both damage ACT Health’s reputation and to misdirect resources reducing ACT Health’s ability to meet its obligations to the ACT community.
ACT Health endeavours to promote an ethical and professional environment where all staff play a role in minimising the incidence of fraud and corruption. Management has put in place strategies to manage threats, to control costs, review systems and introduce effective controls. Thesestrategies intend to achieve a balance between enabling staff to undertake their duties with minimal restriction whilst establishing appropriate controls to minimise the potential for fraud or corruption.
The Fraud and Corruption Control Plan is supported by an up-to-date awareness, training and education program.
2.2Definition of Fraud and Corruption
Fraud,is defined in the ACTPublic Service (ACTPS) Integrity Policy as:
“taking or obtaining by deception, money or another benefit from the government when not entitled to the money or benefit, or attempting to do so – this includes evading a liability to the government.”
Fraud is not restricted to obtaining monetary or material benefit. The benefits of fraudulent acts can either be tangible or intangible. The following serve as examples of fraud:
- Theft of money (cash, cheques, EFTPOS) due to the agency;
- Theft of assets;
- Unauthorised or illegal use of assets;
- Falsification or manipulation of accounting or any other records;
- Submitting false claims for reimbursement;
- Raising fictitious invoices.
Corruptionis defined in the ACTPS Integrity Policyas:
“in relation to an officer or employee, corruption means that the officer or employee seeks, obtains, or receives any benefit other than lawful salary and allowances on the understanding that the officer or employee will do or refrain from doing anything in the course of their duties or will attempt to influence any other officer or employee on behalf of any person”.
The following serve as examples of corruption:
- Manipulating a tender process to achieve a desired outcome;
- Abuse of power and position for personal gain;
- Unauthorised use of an agency’s facilities, and time to operate a private business;
- Non-disclosure of conflict of interest or perceived conflict of interest;
- Receiving personal benefits or gains in exchange for assisting a supplier or service provider.
The source of fraud or corruption may be internal (staff) or external (persons outside the agency).
2.3Objective
The overall objective of this plan is to prevent, to the greatest extent possible, incidents of fraud and corruption within ACT Health. In the event that potential fraud or corruption does occur the plan outlines the predetermined response for each incident.
The plan also meets the following objectives:
- Assists the Director-General to meet regulatory and legislative requirements;
- Provides an integrated element to ACT Health’s overarching governance framework;
- Provides an easy reference tool for staff wishing to report or investigate incidents of fraud or corruption.
2.4Organisational Culture
The opportunity for fraud within an organisation is influenced by the culture and context in which a business operates.
ACT Health has a mature program of internal audit planning and testing which ensures established controls are effectively operating to prevent and detect fraud and corruption. ACT Health also promotes a culture that is aligned with the ACTPS Code of Conduct (2012). This Code is founded on the ACTPS values of Respect, Integrity, Collaboration and Innovation and signature behaviours that all people employed under the Public Service Management (PSM) Act 1994 and Public Service Management Standards 2006 are expected to demonstrate.
Senior executives and managers set high standards of integrity, professionalism and work ethic that are promoted, fostered and serve as role models for staff within ACT Health.
3.FRAUD AND CORRUPTION CONTROL PRINCIPLES
3.1Responsibilities for Fraud and Corruption Management
The responsibility and accountability for full and effective implementation of integrity strategies lies with the Director-General who is accountable to the Minister.
The responsibility for managing fraud and corruption in ACT Health is shared by all senior executives. They are all expected to promote and exhibit a genuine and strong commitment to fraud control, corruption prevention and to good policies and procedures. The Director-General is also responsible for the appointment of a Senior Executive Responsible for Business Integrity Risk (SERBIR).Details of the SERBIR appointment are provided by the Director-General to the ACT Director Public Sector Management Group at the Chief Minister’s and Treasury Directorate.
3.2 Functional Responsibilities, Strategies and Actions
At the strategic level, fraud incident and threat mitigation strategies should provide executives and managers with assurance that fraud and corruption are being adequately prevented, detected and if necessary, will be adequately investigated.
The following key strategies have been identified to address the current level of fraud risk throughout the organisation:
Areas and Strategies / Action / ResponsibilityAwareness:
Maintenance of on-going fraud awareness,training and education program. /
- Dissemination and ongoing easy access to all ACT Health staff of fraud and corruption prevention policy and supporting documents.
- Communication and training to staff of their responsibilities with regard to prevention, detection and reporting.
- Ensure updates and changes to fraud and corruption control are communicated to all ACT Health staff.
- Ensure staff induction which includes fraud and corruption awareness training is completed within set timeframes.
SERBIR
SERBIR
- Executive Directors;
Foster an environment which promotes the highest standards of ethical behaviour /
- Commit to leading and promoting ethical practices and include the criteria in Performance Management Assessments.
Prevention and Detection:
Implementation of a fraud and corruption threat assessment. /
- Identify trend and threats and develop corrective action plans within 45 days.
Implement strategies to reduce fraud and corruption threats. /
- Develop protocols to encourage and implement sound, financial, legal and ethical decision making within ACT Health.
- Ensure that regular and systematic assessment of compliance within their area is completed to identify potential breaches of integrity, theft corruption and fraud.
Deputy Directors General, Chief Health Officer & Executive Directors
Monitoring:
Maintenance of ACT Health’s management reporting regimes to assist identification. /
- Provide advice to the Audit and Risk Management Committee (ARMC) and to Director-General by assessing and reporting the level of compliance and effectiveness of the systems in ACT Health.
- Oversee the implementation of fraud and corruption requirements and strategies across the organisation.
- Provide independent assurance, assistance and advice to the Director-General regarding the organisation’sFraud Control & Corruption control framework.
ARMC
ARMC
Areas and Strategies / Action / Responsibility
Investigation:
Conduct of investigations /
- Development of investigation protocols and identification of resources.
- Refer investigations to ACT Policing if necessary.
SERBIR
Prosecution:
Apply aconsistent firm and fair approach /
- Investigators will recommend to the SERBIR whether a matter should be referred to the Department of Public Prosecutions for final determination on legal action.
Resolution
Review of systems and procedures /
- If a fraud or corruption event is detected the control system involved will be reviewed to identify implement improvements.
Recovery of money/assets lost through fraud or corruption /
- Actively pursue the recovery of lost money or assets.
The SERBIR has overall responsibility for ensuring these strategies are regularly updatedin line with ACT Government requirements and for regularly providing development and compliance status reports to the Audit and Risk Management Committee as directed by the committee and at least six monthly.
The ARMC will oversight the implementation of the Fraud and Corruption Control Strategies and provide assistance and advice to the Director-General about the adequacy of Fraud and Corruption Control measures.
3.3Internal Controls and Internal Audit
The design, development and maintenance of financial, administrative and operational systems, procedures and controls are paramount to the control of fraudand corruption.Systems and procedure reviews will continue to be undertaken with a view to early detection ofpossible fraud and corruption therefore ensuring an appropriate audit trail exists.
Compliance with procedures will be reviewed regularly through spot checks, sample testing and formal audits undertaken by Internal Audit and Risk Management Branch (IA&RM). The results of the audit reviews will be reported back to the ARMC and within ACT Health as appropriate.
3.4Ethics
Two of the most important factors that prevent fraudulent and corrupt activity are:
- The establishment and maintenance of a sound ethical culture; and
- An awareness of exposures tofraud and corruption threats at all levels.
Executives and managers are required to identify and manage fraudand corruptionthreats, control costs, monitor and improve systems, institute proper controls and foster an ethical environment. ACT Health expects all staff to behave ethically and to be responsible for minimising any possibility of fraud and corruption.
When faced with ethical dilemmas, staff may require assistance in deciding the appropriate course of action. This assistance is provided in the form of plans, established and easily accessible reporting lines and procedures. ACT Health maintains an open environment in which all staff are supported and encouraged to discuss ethical dilemmas.
The ACT Public Service Code of Ethics, the ACT Integrity Policy and the ACT Public Service Code of Conduct are published on the intranet to support staff in recognising the ethical code of values and principles that applieswithin the ACT Public Service.
4.VULNERABILITIESTO FRAUD AND CORRUPTION
4.1Potential Fraud Threats
A number of potential fraud and corruption threats are listed below:
- Abuse and /or misuse of corporate credit cards,
- Private use of cabcharge vouchers,
- Cash and cheque collections retained by staff who issue stolen or fraudulent official receipts,
- Theft of portable or attractive items,
- Duplicate payments to suppliers,
- Introduction of fictitious invoices, and
- Bribery, nepotism, conflict of interest and patronage systems.
Although legislation and criminal prosecution are the ultimate deterrents; the following controls are in place to mitigate these threats:
- There is a Corporate Credit Card Policy and Credit Card procedures outlining usage, acquittals and authorisation. These form part of the Director-General Financial Instructions.
- There is a Travel and Cabcharge Policy. Branches are to keep a record of issuance of cabchargevouchers and staff are required to sign when accepting a cabchargevoucher.
- ACT Health has a Cash Management Policy which forms part of the Director-General Financial Instructions. This policy outlines how cash and receipts are handled. There are also financial delegations in place.
- ACT Health has developed an Asset Management Policy. Included in this policy is a Portable and Attractive items procedure which details how these items should be controlled.
- Shared Services is responsible for physical payments to suppliers on behalf of ACT Health. ACT Health prepares the invoices and the appropriate delegate will approve the invoice for payment before it is sent to Shared Services for payment. Invoices are also matched to purchase orders. Shared Services also check to ensure that there is no duplicate payment.
- Invoices have to be approved by the appropriate delegate who has an approved financial delegation. Shared Services will not process an invoice unless the appropriate delegate has approved the invoice.
- Systems and protocols provide transparency and establish audit trails in specific areas such as recruitment, procurement, licensing, etc.
- All activities are subject to internal and external audit.
5.REPORTINGANDCASEHANDLING
5.1How to Report Suspected Fraud or Corruption
It is the responsibility of all ACT Health staff and contractors to act with honesty and integrity at all times and to be vigilant for possible incidents of fraud and corruption.
The SERBIR is responsible for managing investigation of all suspected cases of fraud or corruption. Staff and contractors are requested to notify their supervisor, line manager, executive director or preferably the SERBIR if they want to report cases of suspected fraud or corruption. Where an allegation of suspected fraud or corruption is made to a supervisor, line manager or executive director it is their responsibility to promptly and discretely report it to the SERBIR.
Before proceeding with an allegation staff are to ensure that they:
- Do not jump to conclusions,
- Carefully observe and note the alleged fraud or corrupt activity,
- Document actions,
- Keep all relevant documents as possible evidence and do not alter them,
- Inform only those who need to know,
- Maintain confidentiality.
Staff can make an allegation via e-mail, letter, face to face meeting or telephone call.
Once the allegation is made the SERBIR is responsible for maintaining an appropriate record and tracking system to ensure that all instances of suspected fraud and corruption are satisfactorily resolved. The Internal Audit and Risk Management Branch may also investigate and report on suspected cases of fraud or corruption.
5.2Confidentiality
People who report evidence or suspicions of fraud or corruption can be confident that their identity and information will be treated in the strictest confidence, and that such action will in no way bepermitted to adversely affect their position or prospects within the organisation. Indeed,employees are actively encouraged to be forthright and honest in all their dealings.Staff aggrieved by the conduct of any investigations may raise their concerns in anappropriate manner with management, or if necessary through an appropriate, independentACT body such as the ACT Ombudsman, or the Auditor General.
5.3Public Interest Disclosure
Employees should be aware that the ACT Public Interest Disclosure Act 2012 supports thereporting of wrongdoing, including reporting of fraud and corruption. The Act provides for a method ofinvestigating allegations, while protecting the individual who has made the disclosure fromany reprisals. Members of the public, as well as current and former ACT public servants maymake a ‘public interest disclosure’ to any ACT government agency.
5.4Preliminary Case Handling
Initial investigation into reported fraud or corruption will be made by the SERBIR, who will determine whether there is any basis for further action. The SERBIR may appoint an Authorised Officer within the organisation to undertake enquiries or may acquire the services of external experts to assist in the conduct of an enquiry.
In the investigation process, care needs to be taken to avoid unfounded and incorrect accusations.ACT Health strongly stresses that the alleged are considered innocent until proven otherwise and identity must be protected. In addition, unnecessarily and prematurely alerting individuals against whom allegations have been made may in turn result in destruction of evidence of fraud or corruption. Making unsubstantiated statements could expose ACT Health to legal liabilities for damages arising from a wrongful accusation.
In the event that the SERBIR determines that there is a basis for further action, the case maybe referred to ACT Policing or an investigator who holds and meets ACT Government Fraud Control Investigation requirements.
Doc Number / Issued / Review Date / Area Responsible / PageDGD13-044 / Dec 2013 / Dec 2016 / People Strategy & Services Branch / 1 of 11