Anti-Fraud, Theft and Corruption Policy
Introduction
East Devon District Council has always set itself high standards of honesty and probity. Although instances of fraud and theft are rare and the Council is not aware of any corruption, this Policy is seen as helpful confirmation of the Council’s stance on these matters.
East Devon District Council does not condone fraud, theft or corruption irrespective of whether it is attempted internally by employees or elected council members or externally by members of the public. The Council is committed to this Anti-fraud, Theft and Corruption Policy that is designed to:
- Encourage prevention;
- Promote detection;
- Ensure protection; and
- Identify a clear approach for investigation.
East Devon District Council’s Anti-Fraud, Theft and Corruption Policy is based on a series of comprehensive and integrated procedures designed to prevent any attempted fraudulent or corrupt act. These cover:
- Culture;
- Prevention;
- Detection and investigation;
- Arrangements for Members of the Public;
- Housing Benefit – Fraud Strategy and Prosecution Policy
- Central Government initiatives, eg: National Fraud Initiative
- Training; and
- Whistleblowing.
There is a continuous review of systems and internal controls by Internal Audit and a high degree of external scrutiny of the Council’s business by a variety of bodies, including:
- Local Government Ombudsman;
- Audit Commission;
- Central Government Departments and Parliamentary Committees; and
- Department of Health & Social Security
Fraud Strategy
Staff of the Council are required by its Financial Regulations to report all suspected irregularities to the Internal Audit and Risk Manager. Reporting is essential and:
- ensures the consistent treatment of information regarding fraud, theft and corruption;
- ensures compliance with RIPA and Data Protection legislation
- ensures all enquiries are routed through the Council’s Single Point of Contact (SPoC) currently located in Internal Audit (for definition of SPoC see below)
- facilitates proper investigation by an experienced internal audit team; and
- ensures the proper implementation of a fraud response investigation plan.
Depending upon the nature and anticipated extent of the allegations, Internal Audit will normally work closely with management and other agencies such as the police to ensure that all allegations and evidence is properly investigated and reported upon.
The Council’s Disciplinary Procedure will be used where the outcome of the Audit Investigation indicates improper behaviour.
The Council will normally wish the police to be contacted where financial impropriety is discovered. Referral to the police ensures that offenders are dealt with in accordance with the law.
The relevant Corporate Director will be kept informed of the progress of the investigation.
Definitions
Anti-Fraud is defined as the measures taken within the Council to prevent, detect and investigate instances of fraud.
Fraud itself may be regarded as any deliberate act taken by one or more individuals to deceive or mislead with the objective of misappropriating assets or business usually culminating in the distortion of the Council’s financial records or statements.
Theft is defined as being the dishonest appropriation of the Council’s property with intent to deprive the Council of it permanently.
Corruption is defined as being the use of bribery, fraud or the irregular alteration and or distortion of records to conceal and/or misappropriate assets of the Council.
Whistleblowing means action by an employee to disclose malpractice in the form of irregularity, wrong-doing or serious failures of standards at work.
SPoC means a person authorised by the Home Office to lawfully access telecommunications data, such as land-line, mobile networks, internet and e-mail data.
Culture
East Devon District Council is committed to ensuring that its culture will continue to be one of honesty and opposition to fraud, theft and corruption. There is an expectation and requirement that all individuals and organisations associated in whatever way with the Council will act with integrity and that Council staff and members, at all levels, will lead by example in these matters.
Council staff are positively encouraged to raise any concerns about fraud, theft and corruption that they may have on these issues where they are associated with the Council’s activities.
They can do this in the knowledge that such concerns will be treated in confidence and properly investigated. Any instance must be reported to either the:
- Internal Audit and Risk Manager;
- Corporate Director—Economy;
- Head of Organisational Development; or
- Confidential Answerphone – 01395 517494
In the first instance, members of the public are also encouraged to report any concerns to either the relevant Corporate Director, Internal Audit and Risk Manager or Chief Executive. If these concerns relate to an housing benefit claim they will be passed to the housing benefit fraud team rather than be dealt with by the internal audit and risk management section.
Senior management are responsible for following up any allegation of fraud or corruption and will do so by immediately informing the Internal Audit and Risk Manager. In cases of alleged corruption the Chief Executive should also be informed.
The investigating officer, usually the Internal Audit and Risk Manager, will:
- deal promptly with the matter;
- record all evidence, ensure it is sound and adequately supported;
- ensure the security of all evidence;
- contact and liaise with other agencies, e.g. Police; and
- notify and liaise with the Head of Organisational Development.
Senior Management are expected to deal swiftly and firmly with those who defraud or steal from the Council or who are corrupt. The Council should be considered as robust in dealing with financial irregularity or malpractice.
There is, of course, a need to ensure that any investigation process is not misused, therefore, any incidence of raising unfounded malicious allegations may be dealt with as a disciplinary matter. Any wrong doing or malpractice outside the scope of this Policy Document should be reported to the Chief Executive.
Prevention - Staff
East Devon District Council recognises that a key preventative measure in the fight against fraud, theft and corruption is to take effective steps at the recruitment stage to establish, as far as possible, the previous record of potential staff. Temporary staff are subject to the same recruitment policies as permanent staff.
Staff recruitment must be in accordance with approved fair selection policies and, in particular, the Council will obtain written references before employment offers are made.
Staff of the Council are expected to adhere to established Policies and to follow the Council’s Code of Conduct together with, where applicable, their Professional
Institute’s Code of Ethics. The Council’s Code of Conduct is referred to in the Council’s Staff Handbook; both of which are forwarded with letters of appointment.
Staff are reminded under the Council’s Standing Orders that they must operate within Section 117 of the Local Government Act 1972, regarding pecuniary interests in Contracts relating to the Council or fees and rewards other than proper remuneration.
National Fraud Initiative
The NFI is part of the statutory audit process for health, local government and other public sector bodies. In total, 1500 organisations supply almost 3,500 sets of data in areas such as housing benefit, payroll and pensions. The NFI cross-match this data and sends matches back to Authorities to investigate. Since it was launched in 1996, the NFI has identified more than £290 million in savings for the audited bodies taking part.
Staff are reminded that their personal data will be used for data matching purposes
Members
Members are required to operate within:
- Council Standing Orders;
- National Code of Local Government Conduct;
- Sections 94, 98 and 105 of the Local Government Act 1972;
- Local Authorities (Member Interests) Regulations 1992 (S1.618); and
- Section 106 of the Local Government Finance Act 1992.
These matters are specifically brought to the attention of Members in the Council’s Code of Conduct and include the declaration and registration with the Council’s Chief Executive, potential areas of conflict between Members’ Council duties and responsibilities and any other areas of their personal or professional lives.
Systems
East Devon District Council has Financial Regulations and Financial Operating Procedures in place that require staff, when dealing with the Council’s affairs, to act in accordance with best practice.
The Corporate Director—Economy has a statutory responsibility under Section 151 of the Local Government Act 1972 to ensure the proper arrangements of the Council’s financial affairs and has published Financial Regulations, Financial Operating Procedures and Standing Orders to guide and control the processes with respect to contracts for works, supplies and services. These documents outline the procedures and responsibilities of staff throughout the Council. The Corporate Director—Central Services has a statutory responsibility under Section 5 of the Local Government Housing Act 1989 in respect of monitoring the conduct of the Council’s business.
East Devon District Council has developed and is committed to continuing with systems and procedures which incorporate efficient and effective internal controls and which include adequate separation of duties. Corporate Directors and Heads of Service have a responsibility to ensure these controls are properly maintained and documented. Their existence and appropriateness may be independently monitored by Internal Audit.
Working with other Agencies
Arrangements are in place and continue to be developed to encourage the exchange of information between the Council and other agencies on national and local fraud, theft and corruption activity in relation to Local Authorities.
These include:
- Police;
- Devon Audit Group;
- Audit Commission;
- Initiatives by Government Departments, eg DSS, NFI
Detection and Investigation
Despite the best efforts of financial managers and auditors, many frauds and thefts are discovered by chance or from a ‘tip off’. East Devon District Council has arrangements in place to enable such information to be dealt with properly.
The array of preventative systems, particularly internal control systems within the Council, have been designed to provide indicators of any fraudulent activity. Generally they should be sufficient in themselves to deter fraud. It is, however, a fact that alert and observant Council staff, Council members and members of the public do become aware of fraud, theft and corruption and every opportunity is available for them to report any suspicions to the relevant officers of the Council.
Arrangements for Members of the Public
Members of the public are encouraged to report all suspected irregularities, including suspected fraud, theft or corruption to the Internal Audit and Risk Manager.
A confidential answerphone has been set up to receive calls relating to suspected fraud, theft or corruption in the event that any member of public wishes to telephone out of hours.
A leaflet giving advice on what members of the public should do if they suspect fraud, theft or irregularity has occurred has been produced, a copy of which can be obtained from the Internal Audit and Risk Management Section.
Housing Benefit Fraud Strategy & Fraud and Prosecution Policy
Housing Benefit Fraud Strategy
East Devon District Council has its own team of designated Housing Benefit Fraud Officers who actively pursue any suspected fraud or irregularity brought to their attention. These officers work closely with benefit assessment staff and liase frequently with the Benefits Agency, Inland Revenue, Customs & Excise and other agencies.
East Devon District Council adheres to the housing benefit claim ‘verification framework’; this is a procedure which is designed to prevent fraud by promoting close scrutiny of evidence used to support housing benefit claims. Departmental policies within Housing Benefits encourages referrals to the Housing Benefit Fraud Officers of any suspected fraudulent claim. The Housing Benefit Fraud Officers comply with the Housing Benefits Investigation Manual produced by the Department for Work and Pensions (DWP) and the codes of conduct required under parliamentary legislation.
The Council has introduced new anti-fraud software to assist in the detection and prevention of Housing Benefit fraud.
A confidential answerphone has been set up to facilitate the reporting of fraud by members of staff or members of the public – this number appears in the leaflet ‘what should you do if you suspect fraud, theft or corruption’ a copy of which is available from the Internal Audit and Risk Management section.
Fraud & Prosecution Policy
East Devon District Council has adopted policies and procedures to help ensure investigations into suspected fraud and irregularities are carried out consistently and with due care. These policies and procedures ensure that where fraud is proved, an investigation is progressed to prosecution or penalty.
Training
East Devon District Council recognises that the effectiveness of its Anti-Fraud, Theft and Corruption Policy will depend largely on the effectiveness of programmed training and responsiveness of staff throughout the organisation. To facilitate this, the Council has an induction programme which provides full opportunities for Corporate Directors to arrange for responsibilities to be highlighted and re-inforced.
Anti-Fraud, Theft and Corruption Policy
Whistleblowing
East Devon District Council is aware of the difficulties and conflicts that may arise for staff and Council Members who suspect a colleague of fraud, theft or corruption. It is, nevertheless, essential that all instances are reported without delay. It is incumbent on all staff and Council members to report instances or suspicions of fraud, theft and corruption.
Wherever possible all instances reported will be treated in the strictest confidence. It is the Council’s intention that any person reporting a concern or incident will as far as is possible, have their identity kept confidential. It should be understood however, that it is impossible to guarantee anonymity, especially where disciplinary action or prosecution arises.
The Council is sensitive to the potential difficulties staff and Council members may face if they report an incident and subsequently have to continue working with the individual(s) concerned. It is the Council’s intention that every reasonable measure will be taken to ensure that no reprisals are taken against whistleblowers.
Finally, no one will be penalised for making an allegation that is subsequently proved to be groundless, where the allegation has been made in good faith. The Council will not, however, tolerate individuals making malicious allegations and disciplinary action may be taken against such persons.
Conclusion
East Devon District Council has in place a clear network of systems and procedures to assist it in the fight against fraud, theft and corruption. It is determined that these arrangements will keep pace with any future developments in both preventative and detection techniques regarding fraudulent or corrupt activity that may affect its operations.
To this end, the Council maintains a continuous overview of such arrangements and, in particular, through its Internal Audit coverage, Financial Regulations, Financial Operating Procedures, Standing Orders, established Policy and Codes of Conduct
