WREXHAM COUNTY BOROUGH COUNCIL
COUNTER FRAUD STRATEGY
(incorporating offences relating to
theft, corruption and bribery etc)
2011 – 2014
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Table of Contents
Chapter Heading Page No.
COUNTER FRAUD POLICY STATEMENT 1
1. Introduction 1
2 Counter Fraud Strategy 2
4. Objectives 3
5. Roles and Responsibilities 4
6 Culture, standards and ethics 4
8. Implementation of the Strategy 8
APPENDIX 1 10
Appendix 2 12
Appendix 3 19
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COUNTER FRAUD POLICY STATEMENT
1 In the context of this document, the Council recognises that the term counter fraud also includes the separate offences of theft, corruption and bribery.
2 The Council expects the highest standards of propriety and ethics in the delivery of its services and the management of its resources and assets.
3 The Council will carry out its business fairly, honestly and openly at all times.
4 The Council does not and will not tolerate any form of fraud, corruption or bribery when undertaking any of its responsibilities, including Housing / Council Tax Benefit fraud.
5 The Council will prevent fraud, corruption and bribery by designing and formulating proportionate policies and systems to minimise risk.
6 The Council will continue to promote the detection and investigation of fraud, corruption and bribery including the application of robust, effective sanctions and recovery procedures where it is identified.
Counter Bribery Statement
7 The Council recognises that bribery is a criminal offence. We do not, and will not, pay bribes or offer improper inducements to anyone for any purpose, nor do we or will we, accept bribes or improper inducements. To use a third party as a conduit to channel bribes to others is a criminal offence.
8 We do not, and will not, engage indirectly in or otherwise encourage bribery. We are committed to the prevention, deterrence and detection of bribery. We have zero tolerance towards bribery. We aim to maintain anti-bribery compliance “business as usual”, rather than as a one-off exercise.
1. Introduction
1.1 Wrexham County Borough Council (the Council) employs around 6,000 staff and spends around £200 million per year. It commissions and provides a wide range of services to individuals and households and works with a wide range of private, public and voluntary sector organisations.
1.2 As with any other large organisation, the size and nature of the Council’s services mean that there is an ongoing risk of loss due to fraud and corruption from both internal and external sources. There is also an ongoing risk of bribery as the Council provides and procures goods, works and services. The Council has therefore put in place proportionate systems to minimise this risk and these are kept under constant review.
1.3 The Council recognises that as well as causing financial loss, fraud is also detrimental to the provision of services, and damaging to the reputation of, and confidence in, the Council and public bodies in general.
1.4 In recent years the Council has experienced a relatively low level of detected fraudulent activity. Where such activity has been identified, prompt action has been taken to investigate and seek sanctions and redress. There has been no evidence of any corruption or bribery either of Council officials or by them.
1.5 In its policies and procedures the Council gives out the clear message that it will not tolerate any impropriety by employees, elected Members or third party organisations. These are all signs of a robust framework in place to mitigate the risk of fraud, corruption or bribery.
1.6 The Strategy has the full support of Members and the Council’s Strategic Management Team. The Lead Member for Finance and Asset Management will act as the Champion for all counter-fraud related activities.
1.7 The Council is also aware of the high degree of external scrutiny of its affairs by a variety of bodies including:
· The Local Government Ombudsman,
· The Wales Audit Office,
· Statutory Inspectorates such as ESTYN and the Care and Social Services Inspectorate Wales (CSSIW),
· Her Majesty’s Revenue and Customs,
· Auditors of organisations for whom the Council acts as agents as well as those that provide direct funding for the Council e.g. European funding organisations.
2 Counter Fraud Strategy
2.1 The current Counter Fraud and Corruption Strategy was approved by the Executive Board in 2009. This revised Strategy takes account of changes in legislation e.g. the Bribery Act 2010 and also best practice e.g. CIPFA’s “Red Book 2 – Managing the Risk of Fraud”.
2.2 The Strategy is based on the following principles of best practice:
a) culture / b) deterrencec) prevention / d) detection
e) investigation / f) sanctions
g) redress / h) training
2.3 The Strategy also covers the arrangements in place to prevent and detect Housing / Council Tax Benefit fraud. The Council has a separate Sanctions Policy in respect of Housing / Council Tax Benefit Fraud.
3. Scope
3.1 All references to fraud within this document include any other type of fraud related offence. The relevant definitions are as follows:
3.2 Fraud – “A person shall be guilty of fraud if he
1) a) dishonestly makes a false representation, or
b) dishonestly fails to disclose to another person information which he is under a legal duty to disclose, or
c) occupies a position in which he is expected to safeguard or not to act against the financial interests of another person and dishonestly abuses that position
AND
2) intends to make a gain for himself or another or to cause loss to another or expose another to a risk of loss"
3.3 Theft - “A person shall be guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it’ (Theft Act 1968).
3.4 Corruption - The Council has defined corruption as ‘the offering, giving, soliciting or acceptance of an inducement or reward, which may influence the action of any person”.
3.5 Bribery – The Council has defined bribery as “a financial or other advantage that is offered or requested with the intention of inducing or rewarding the improper performance of a relevant function or activity, or with the knowledge or belief that the acceptance of such an advantage would constitute the improper performance of such an activity.
4. Objectives
4.1 The key objectives of this Counter Fraud Strategy are to:
a. Increase awareness of counter-fraud responsibilities at all levels within and outside the Council;
b. Increase awareness of the Bribery Act 2011
c. Further embed and support the effective management of fraud risk within the Council;
d. Support counter fraud activities across the Council;
e. Minimise the likelihood and extent of losses through fraud and corruption;
4.2 All the above will directly support the achievement of Council and Improvement priorities for 2011 – 2014 whilst also ensuring that statutory responsibilities are met.
5. Roles and Responsibilities
5.1 Roles and responsibilities for identifying and mitigating the risk of fraud must be clearly understood and embraced effectively. These are shown in Appendix 1.
5.2 The risk of fraud is considered in the Council’s corporate risk management arrangements. Heads of Department must therefore ensure that:
a) their risk register accurately reflects the risk of fraud including any emerging risks;
b) controls, including those in a computerised environment, are effective and are properly maintained and documented;
c) there is compliance with the Council’s Financial Regulations, Standing Orders and any other relevant codes of practice;
d) those engaged in countering fraud, have the appropriate authority, skills and knowledge to undertake this work effectively;
e) that the necessary framework agreements and due diligence requirements to counter fraud are in place where the Council is working with other organisations either by way of contract or partnership. The Council will not knowingly enter into any contractual agreement with an organisation that fails to comply with its Codes of Practice and/or other related procedures.
6 Culture, standards and ethics
6.1 The Council’s Code of Corporate Governance sets out its commitment to the highest ethical and moral standards and also to a culture of honesty, openness and accountability i.e.:
“Promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour”
6.2 All employees, partner organisations as well as organisations working on the Council’s behalf, are expected to share in this commitment and to lead by example in ensuring adherence to all Council regulations, procedures, practices and codes of conduct in accordance with the Nolan Committee’s “Seven Principles of Public Life” which are:
a) Selflessness / b) Opennessc) Integrity / d) Honesty
e) Objectivity / f) Leadership.
g) Accountability
6.3 All elected Members and co-opted members will be expected to adhere to the ten principles set out in “The Conduct of Members (Principles) (Wales) Order 2001”. In addition to the seven Nolan principles set out above, it also sets out the requirements in relation to Stewardship, Duty to Uphold the Law and Equality and Respect.
6.4 The Council’s commitment to the highest standards of governance is supported by a strong ethical framework i.e. the Constitution, Member / Officer Codes of Conduct, Financial Regulations etc This is a key control in minimising the risk of fraud and corruption and also includes specific counter-fraud policies such as the Whistleblowing Policy, Anti Money Laundering Policy etc.
6.5 The framework supports a preventative, counter fraud culture which is supported by ongoing work to detect / investigate fraud and to apply sanctions and recover losses where it is found.
The Council is opposed to any form of fraud, corruption or bribery and will not permit any of these to be tolerated or perpetuated.
6.6 The Council aims to both deter those who may commit fraudulent and corrupt acts and encourage those who suspect such activity to report it promptly. The Council’s Whistleblowing Policy actively encourages elected Members and employees to raise concerns in confidence without fear of reprisals or victimisation so that they can be investigated properly and fairly. Concerns may also be raised via the Council’s Grievance Procedures. Appendix 3 provides details of how to raise such concerns.
6.7 Members of the public are encouraged to report any concerns which they may have. This may be direct using the contact details shown in Appendix 3 or by using the Council’s customer liaison procedures which are available on the Council’s website; www.wrexham.gov.uk or by contacting 01978 292000 and asking to speak to the Audit and Technical Manager..
7 Counter-fraud measures
Deterrence
7.1 As Section 151 Officer, (Appendix A), the Head of Finance has a statutory duty to ensure the proper administration of the Council’s financial affairs. This includes establishing systems and controls e.g. Financial Regulations, Internal Audit etc as well as a clear programme of work to act as a strong deterrent to fraud.
7.2 In terms of bribery, these systems and controls will be proportionate to the risks faced by the organisation.
7.3 The Council will publicise its counter fraud measures using all available means i.e. the local and national press, Council newsletters, technical publications, the internet etc and will include:
a) That the honest majority of people are opposed to fraud, corruption or bribery
b) The effectiveness of controls including the governance framework
c) The sophisticated arrangements that are in place to detect fraud
d) The professionalism of those who investigate fraud
e) The Council’s policy on applying proportionate sanctions and the prompt, effective recovery of losses
f) The Council’s commitment to ensuring that Housing / Council Tax Benefit is awarded only to those claimants who have an entitlement and that procedures and processes are in place to verify the circumstances of claimants before making any awards
g) The Council’s participation in the National Fraud Initiative (NFI) and its extension into new areas
h) The Council’s Whistle Blowing Procedures
Prevention
7.4 Heads of Department should ensure that controls to mitigate fraud risks are effective. This includes promoting awareness, assessing compliance with the Council’s policies and ensuring that adequate levels of internal check are included in operational procedures.
7.5 The Chief Executive, Strategic and Performance Directors and Heads of Department are responsible for the appraisal of internal control systems in relation to fraud, corruption and bribery. In doing so, they may be assisted by Internal Audit.
7.6 Internal Audit will give an annual assurance to the Council’s Audit Committee on the overall adequacy and effectiveness of the Council’s internal control environment including “the extent to which the Council’s assets and interests are accounted for and safeguarded from losses of all kinds arising from fraud, other offences, waste, extravagance, inefficient administration, poor value for money or other cause”.
Detection
7.7 The Council will use all legal and cost effective means to detect fraud, corruption and bribery including working with other organisations and participating in national data matching schemes e.g. the National Fraud Initiative. This may require the lawful sharing of information.
7.8 Elected Members, staff and external stakeholders are expected to report suspected fraud, corruption or bribery promptly in accordance with Financial Regulations, the Council’s Whistle Blowing Procedures and the Fraud Response Plan. (Appendix 2). The Council’s Whistle Blowing Procedures are intended to encourage and enable staff to raise serious concerns. Employees reporting concerns this way are allowed certain rights and protection under the Public Interest Disclosure Act 1998.
Investigation
7.9 Any allegation of fraud will be investigated in accordance with the Fraud Response Plan (Appendix 2) / Benefit Fraud Sanctions Policy and the Council’s Disciplinary Procedures. The Council will also adhere to the provisions of the Regulation of Investigatory Powers Act (RIPA) and Money Laundering Legislation.
7.10 Heads of Department will deal swiftly and firmly with those who attempt to defraud the Council and make any necessary changes to systems and procedures to ensure that similar frauds will not recur.
7.11 Any cases of financial impropriety will normally be referred to the Police. The Head of Corporate and Customer Services is responsible for considering any such cases prior to referral and acting as the main contact point thereafter.