Counter fraud training for all staff

a criminal activity where deception is used for personal gain or to cause a lossa criminal activity where deception is used for personal gain or to cause a loss

Fraud is...

Three main ways of committing fraud, established by the Fraud Act 2006

Fraud by...

• False representation• Failure to disclose information• Abuse of position

An estimated £73 billion a year in the UK

Losses of £20.3 billion in the public sector

Fraud costs...

Public sector fraud £20.3bn

Tax £14bn

Central Government £2.5bn

Local Government £2.2bn

Benefits £1.6bn

Why does this matter?

£20.3 billion would fund 700,000 public sector staff

Fraud can also lead to...

• Reputational damage• Distrust • Poor morale• Higher taxes• More expensive public services• Funding for terrorism, drug gangs & child exploitation

Read all about it:

When the perpetrator spots an opportunity, has a motivation to commit fraud and feels able to justify their actions

Fraud happens...

Motivation

OpportunityJustification

!Fraud Risk

The Fraud Triangle

• Pressure for results• Financial• Revenge

• Controls not functioning• Staff changes/losses• Tolerance

• I’ve earned it• Nobody will suffer• It’s a ‘one off’

The fraudsters we encounter

Insiders A dishonest minority

working within an organisation and either

perpetrating fraud themselves or helping

fraudsters on the outside

Serious organised criminals

Who target huge public sector budgets to help

fund other crimes such as drugs, people trafficking

and terrorism

Members of the public Either opportunistic or

serial fraudsters, who take advantage of tax, benefits

and grants provided by local government for the

needy

Suppliers and contractors Employees of external

firms who spot the opportunity to exploit

local government processes or systems

A criminal obtained more than £500,000 by diverting payments intended for a legitimate supplier into his own bank account.

He checked government records and spotted regular, large, payments of the same amount being made to a supplier company by a department.

He called the department and, chatting to staff, found out when the payment runs were made. He then called again, to amend the supplier’s bank account details to his own. And started to collect payments…

Case study

The fraud was discovered because the criminal’s payment claims did not match a credit note on the system – of which he had no knowledge. This prompted the department to check details with their legitimate supplier.

This case is currently being prosecuted

The fraud was discovered because the criminal’s payment claims did not match a credit note on the system – of which he had no knowledge. This prompted the department to check details with their legitimate supplier.

This case is currently being prosecuted

How does fraud come to light?

40% of fraud against government occurred because proper processes were not followed

Your Council needs

YOU!

It is your responsibility to help in the fight against fraudIt is your responsibility to help in the fight against fraud

You are one of the most effective deterrents against fraud – 30% is uncovered by staff, members of the public, or 3rd parties

You are one of the most effective deterrents against fraud – 30% is uncovered by staff, members of the public, or 3rd parties

YOU are vital

Good procedures and controls – and following them - are vital for removing the fraud opportunity. If you spot a weakness in the system, voice your concerns

Good procedures and controls – and following them - are vital for removing the fraud opportunity. If you spot a weakness in the system, voice your concerns

Suppliers & contractors...• requesting payment for goods before delivery• placing tender bids much higher or lower than others• submitting invoices on non-headed paper• notifying that their bank details have changed

Suppliers & contractors...• requesting payment for goods before delivery• placing tender bids much higher or lower than others• submitting invoices on non-headed paper• notifying that their bank details have changed

Colleagues... • being disdainful of procedures & controls • having a sudden change of lifestyle or unexplained wealth.• appearing withdrawn at work• reluctant to take holiday or a promotion• changing their work practices without authorisation

Colleagues... • being disdainful of procedures & controls • having a sudden change of lifestyle or unexplained wealth.• appearing withdrawn at work• reluctant to take holiday or a promotion• changing their work practices without authorisation

Some of the warning signs of fraud

Discussion

Consider these examples...

Mary recently returned from a business trip overseas. When putting in a claim for travel and subsistence, she decided to add an extra £50. She was experiencing financial difficulties at home and her youngest son’s birthday was approaching. After all, she thought, nobody would suffer as the department wouldn’t miss £50.

Mary recently returned from a business trip overseas. When putting in a claim for travel and subsistence, she decided to add an extra £50. She was experiencing financial difficulties at home and her youngest son’s birthday was approaching. After all, she thought, nobody would suffer as the department wouldn’t miss £50.

Simon made fraudulent claims of more than £28,000 for travel and subsistence. He did this by forging authorised signatures, claiming for hotels when he had stayed with relatives, and claiming for visits not made. He had been passed over for promotion on several occasions and felt the organisation was treating him unfairly.

Simon made fraudulent claims of more than £28,000 for travel and subsistence. He did this by forging authorised signatures, claiming for hotels when he had stayed with relatives, and claiming for visits not made. He had been passed over for promotion on several occasions and felt the organisation was treating him unfairly.

If you suspect fraud...

DO Act quickly to find out what has happenedDocument the details clearly and factuallyReport it to your line manager, internal fraud or audit team

DON’T Ignore your concernsDelay reporting the matterRemove documentationTry to investigate it yourselfDiscuss the matter with colleagues or friendsApproach or accuse any individuals directly

If you are a manager...

DO

DON’T

In this slide, please state the procedure for managers in your Council, on how to react should they have a fraud reported to them. It is important to mention that managers must react when a concern is raised, and not dismiss it

Fraud: Help us spot it and stop it

Spot loopholes in your project that fraudsters could exploit

Tell your line manager or contact XXXX (insert details) if you suspect fraud

Own the problem – it is everyone’s responsibility to stop fraud

Pass the counter fraud, bribery and corruption course (give details on where to find it)

Thank you for participating

• Any questions?

• For further information please contact INSERT NAME AND CONTACT DETAILS