Anti-Fraud and Corruption Policy and Procedures 

Policy Statement 

The Authority is committed to ensuring that the people of the Devon and Torbay can have complete confidence that the affairs of the Authority, its committees and joint committees are conducted in accordance with the highest standards of probity and accountability. The Authority is, consequently, committed to combating fraud and corruption wherever it may arise in relation to any of the Authority’s activities or services and involving any Members, its committees or joint committees, or Officers of the and the Constituent Authorities and Non-Constituent Authorities who provide services to the Authority, its committees or sub committees or members of the public or other third parties.  

In this policy, references to Members of the Authority include references, where appropriate, to members of its committees and joint committees and, references to Officers of the Authority include references where appropriate to Officers of the Constituent Authorities and Non-Constituent who provide services to the Authority, its committees and joint committees.  

The Authority expects Members and Officers to demonstrate the highest standards of honesty and integrity. This includes compliance with appropriate legislation, Member and Officer Codes of Conduct, Standing Orders, Financial Regulations, conditions of service, standards of appropriate professional bodies, and any other standards, guidelines or instructions which are relevant to the particular service or activity.  

The Authority is committed to establishing and maintaining effective arrangements to prevent fraud and corruption. The Authority recognises, however, that fraud and corruption cannot be prevented and so effective arrangements have been established to detect and investigate all incidents or situations where fraud and corruption is suspected.  

The Authority will not tolerate dishonesty on the part of any of the Members or Officers of the Authority or any persons or organisations involved in any way with the Authority. Where fraud or corruption is detected, the Authority will rigorously pursue appropriate action against the persons concerned including legal and / or disciplinary action.  

The Authority is committed to creating and maintaining an anti-fraud and corruption culture and this includes establishing arrangements which enable Officers, or other persons, to express concerns and suspicions without fear or repercussions or intimidation and in the knowledge that the information will be treated confidentially and will be investigated fully and rigorously.  

The Authority is committed to working constructively with the police and other relevant agencies in relation to combating fraud or corruption within the Authority or within the wider community.  

The Authority will seek to ensure that its stance on anti-fraud and corruption is widely publicised. All Officers and Members of the Authority will be made aware of this policy statement.  

This policy statement is supported by guidance notes that set out the procedures for applying the policy.

Introduction

The Authority is committed to the highest standards of probity and accountability to safeguard public funds. It will not tolerate dishonesty on the part of Members, Officers or others involved with the Authority. It expects that Members and Officers at all levels will act in a manner that ensures adherence to statutory requirements and to the rules and procedures of the Authority.  

The Anti-Fraud and Corruption Policy applies to all Members and Officers of the Authority. It also applies as far as it can to any persons, companies or organisations in relation to their dealings with the Authority including partnership arrangements and developments involving ‘arm’s length’ companies or organisations, contractors, consultants, suppliers and claimants.  

The Authority’s primary objective, through the Anti-Fraud and Corruption Policy, is to ensure that fraud and corruption does not occur within the Authority and if it does occur that it is detected and dealt with appropriately and effectively.  

These procedures are intended to advise all Members and Officers of obligations and rights within this policy and to assist senior Officers in dealing with any matters which arise in relation to the policy. 

Definitions

Fraud

The legal definition of fraud contained within the Fraud Act 2006 includes; fraud by false representation; fraud by failing to disclose information and fraud by abuse of position. Fraud is typically associated with financial loss however this policy relates to acts of dishonesty whether or not financial loss is incurred. For the purposes of these procedures fraud may include but is not limited to:  

1. the intentional distorting of statements or other records by persons internal or external to the Authority which is carried out to conceal the misappropriation of assets, evasion of liabilities or otherwise for gain;  

2. unauthorised use of the Authority ’s property; or  

3. theft of monies or other property of the Authority by persons internal to the Authority.  

The theft of the Authority’s property carried out by persons external to the Authority through for example break-ins, burglary and opportunist theft falls outside the scope of the Anti-Fraud and Corruption Policy. Thefts of this nature should continue to be reported by Chief Officers directly to Internal Audit and the police in the normal way.  

Fraud is a deliberate act of commission or omission by an individual or group of individuals. Fraud can occur in a number of ways including:-  

1. fraud perpetrated against the Authority by members of the public or other third parties;  

2. fraud perpetrated against the Authority by Members or Officers of the Authority;   

3. fraud perpetrated jointly by members of the public or other third parties in collusion with Officers or Members of the Authority.   

Areas which may be most at risk in respect of fraud include but are not exclusively related to the following: 

1. cash collection (any situation where cash or cheques are received or collected) – misappropriation, failure to account, borrowing by delaying paying monies in, falsifying of receipts, not issuing receipts;  

2. credit income – suppression of invoices, issuing invoices for wrong amounts, unauthorised writing off of debts;  

3. payroll – falsification of records (time sheets, overtime claims); creation of fictitious Officers;  

4. creditor payments – payments for work not completed or not in accordance with the specification, or for goods not supplied or not in accordance with the original order;  

5. expenses claims – over claiming of expenses;  

6. false, fictitious or contrived claims. The unauthorised setting up or amendment of claims by Officers (including payments to self, family, friends etc.). Officers aiding or abetting third parties in the completion or submission of false claims;  

7. bank accounts and imprest accounts – use of accounts for unauthorised purposes;  

8. equipment and vehicles – unauthorised personal use.  

Corruption

Corruption is defined as the offering, giving soliciting or acceptance of an inducement or reward that may influence the action of any person.  

The main law relating to corruption in public bodies is contained the Bribery Act 2010.   

The Bribery Act 2010 creates four new criminal offences:-  

1. a general offence covering offering, promising or giving a bribe;   

2. a general offence covering requesting, agreeing to receive or accepting a bribe;   

3. a separate offence of bribing a foreign official to obtain or retain business;  

4. a strict liability offence for commercial organisations where they fail to prevent bribery by those acting on their behalf.   

The Act includes severe penalties for offences. Individuals can receive unlimited fines and up to a ten year custodial sentence; organisations can receive unlimited fines. Senior Officers can also be convicted of an offence where they are deemed to have given their consent or connivance to giving or receiving a bribe or bribing a foreign public official. These offences could involve Members or Officers of the Authority, members of the public or other third parties.  

Areas which may be most at risk in respect of corruption include but are not exclusively related to the following:-  

1. tendering and award of contracts;  

2. settlement of contractors’ claims for loss and expense, compensation, additional payments, or work not done or substandard;  

3. award of permissions, consents, licences;  

4. lettings; and  

5. disposals of assets.  

Anti-Fraud Culture and Key Principles  

The Authority aims to ensure that Members and Officers exercise proper stewardship of public money and that effective controls and procedures are embedded into all working practices which will prevent and detect fraud and corruption. Members and Officers should be aware of their roles in preventing and detecting fraud and managers should ensure they lead by example in compliance with rules and regulations.  

Legislation regulates local authorities and, amongst other things, sets out the framework that ensures that local authorities adopt effective control and governance arrangements. Within this framework, the Authority has adopted a constitution containing instructions, regulations and procedures which are designed to ensure high standards of probity in the conduct of the affairs of the Authority of which this policy forms a part.  

The primary defence against fraud and corruption is the establishment of sound practices, procedures and systems, incorporating effective controls, which are subject to effective monitoring, supervisory and managerial arrangements. It is the duty of every manager and supervisor to operate the systems and controls in their area of responsibility, necessary to prevent and detect fraud and corruption. Failure to do so, especially where such failure results in fraud, corruption or theft, may result in disciplinary action.  

These control arrangements need to apply within an overall culture, within the Authority , which positively promotes the highest standards of probity and which makes it absolutely clear that the Authority will not tolerate dishonesty on the part of any of the Officers or Members of the Authority or any persons or organisations involved in any way with the Authority .  

Where the Members or Officers are involved, or where any person acts on or as an agent of the Authority, or where initiatives or schemes involve funding through the Authority, the principles outlined in the Anti-Fraud and Corruption Policy and Procedures must be applied.  

Roles and Responsibilities

Members

All Members have a duty to act to prevent fraud and corruption. Every Member has a role to play in maintaining the standards of probity and integrity that the public is entitled to expect, which obviously includes compliance with relevant rules and procedures. The Code of Conduct for Members sets addresses standards and expectations.  

Audit and Governance Committee/Standards Committee

The Audit and Governance Committee and Standards Committee will regularly review Anti-Fraud and Corruption Policy and will ensure that any matters arising from the implementation of the policy are properly investigated. Internal Audit will report to the Audit and Governance Committee and Standards Committee on significant matters arising from investigations of fraud and corruption.  

The Treasurer  

The Treasurer is responsible for ensuring that suspected financial irregularity is reported and investigated. The Treasurer is responsible for deciding what investigation action is to be taken and ensuring it is completed.  

Monitoring Officer  

Any concerns related to Members’ compliance with the Code of Conduct would be addressed to the Standards Committee which would request the Monitoring Officer to investigate. The Monitoring Officer may ask Internal Audit or others to carry out investigation work.  

Internal Audit  

Internal Audit acts on behalf of the Treasurer in relation to the investigation of reports of financial or other irregularity and can offer advice and support to managers during this process.  

Internal Audit also provides advice on appropriate controls to help prevent and detect fraud and corruption and will work with Chief Officers to provide assurance that controls are working as intended and to improve internal control where necessary.  

Management  

Chief Officers have a specific responsibility to publicise the anti-fraud and corruption policy to all Officers and to ensure that they are aware of their responsibilities as outlined in this policy and of sanctions that can be levied.  

Managers are responsible for actively dealing with suspected cases of fraud in a reasonable timeframe.  

Responsibility for maintaining effective systems, procedures and controls to prevent fraud and corruption rests with Chief Officers and their managers responsible for relevant systems or particular areas of service.   

Officers

All Officers have an obligation to be vigilant to the risk of fraud and corruption. They are expected and positively encouraged to raise concerns relating to potential fraud and corruption when they become aware of it. Officers should report matters of concern as soon as possible. Reports raised in good faith will be treated in a confidential manner and investigated.  

The Officers’ Code of Conduct addresses the Authority’s standards and expectations of personal conduct. Breaches of conduct will be addressed through disciplinary procedures. Officers must make sure that they read and understand the rules and regulations that apply to them, and act in accordance with them 

Reporting Irregularities

Members

Where Members wish to report alleged irregularities, the normal reporting route should be through the Chief Executive or the Treasurer.  

The Chief Executive and Monitoring Officer must be informed where alleged irregularities involve Members. If allegations involve a breach of the Code of Conduct this will be referred to the Standards Committee where any appropriate action will be taken.  

Officers

As indications of suspected irregularities could arise in many different ways it is possible that any of the Authority’s Officers could be the first to become alerted to a potential situation involving fraud or corruption.  

Any Officer, becoming aware of a potential financial irregularity must, under normal circumstances, report the situation to his/her line manager as soon as possible. The manager in turn should also report through the management structure and to Internal Audit as soon as possible.  

At the appropriate management level, which is normally Chief Officer, the situation must be reported to Internal Audit which will then inform the Treasurer and agree a course of action.  

Internal Audit will advise on and instigate such action as considered necessary for investigating the alleged irregularity. This will take into account whether the alleged financial irregularity warrants investigation by Internal Audit, whether the Police should be referred to immediately or whether the Authority should conduct its own investigation. 

Where an allegation or suspicion of fraud concerns an Officer of the Authority and is considered sufficiently serious to be investigated, then an Investigating Officer will be appointed. As appropriate and agreed Internal Audit (from either Constituent Authority) will investigate fraud involving accounting and other records, evaluate systems and internal control and collate evidence providing an opinion on allegations made. This will be reported to the Investigating Officer who will have overall responsibility in taking the investigation forward for disciplinary purposes and reported to the Treasurer where system weaknesses and control issues are involved. The Authority will consider the full range of sanctions, disciplinary, regulatory, civil and criminal which will be applied as appropriate to each case. Where allegations are identified to have been made maliciously appropriate action will be taken.   

Reporting Directly to the Statutory Officers of the Authority 

If an Officer feels it would not be appropriate to report alleged or suspected irregularities through the normal line management structure, then the Officer should report to a Statutory Officer of the Authority.  

Alternative Contact Points  

The Authority provides the reporting lines above to ensure that Members and Officers are satisfied that reports will be treated seriously, and that action will be taken. If they consider this is not the case, then matters could be taken outside the Authority to other contact points. The process for this is described in more detail in the Whistleblowing policy and guidance.  

Monitoring

The Treasurer is responsible for monitoring the effectiveness of the procedures for investigation of irregularities outlined in the guidance note and for amending the procedures as necessary. Internal Audit will review the effectiveness of the internal control environment and reports will be made to the Audit and Standards Committee where appropriate on the number, type and outcome of investigation matters as appropriate.  

Sharing Information

The Authority is committed to working and co-operating with other organisations to prevent organised fraud and corruption. They support the National Fraud Initiative and, wherever possible, the Authority will be prepared to help and exchange information with other authorities and organisations to counter fraud. This information will be shared in accordance with the principles of the Data Protection Act 1998 and the United Kingdom General Data Protection Regulations (UKGDPR).