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AUDIT, GOVERNANCE & STANDARDS COMMITTEE

15 January 2018

 

Counter Fraud & Corruption Policy

 

Final Decision-Maker

Audit, Governance & Standards Committee

Lead Head of Service/Lead Director

Mark Green, Director of Finance & Business Improvement

Lead Officer and Report Author

Rich Clarke, Head of Audit Partnership

Classification

Public

Wards affected

All

 

Executive Summary

 

This report proposes a refreshed policy setting out how Maidstone Borough Council aims to identify and mitigate the risks of fraud, corruption and wider economic crime. The Policy also sets out how the Council will deal with incidents.

 

 

This report makes the following recommendations to this Committee:

1.   Approve the Counter Fraud & Corruption policy.

 

 

Timetable

Meeting

Date

Wider Leadership Team

9 January 2018

Audit, Governance & Standards Committee

15 January 2018



Counter Fraud & Corruption Policy

 

 

1.††† INTRODUCTION AND BACKGROUND

 

1.1     The Councilís present counter fraud policy dates from 2009.† While that document remains fundamentally sound, it has fallen out of date against current best practice.† There are also specific developments since then, including the Bribery Act 2010 and CIPFAís Counter Fraud Code of Practice that should feature within the Councilís policymaking.

 

1.2     We have aimed to keep the Policy brief and straightforward with much detail included within the appendices.† Those appendices are in summary rather than attached here for the following reasons:

 

         They contain details of investigative method (including, for example, the range and types of information shared) that might aid potential fraudsters.

 

         They repeat policies already seen by the Committee (including the Whistleblowing Policy).

 

         They need further detailed development with at-risk services (for instance discussing with public facing, decision making and cash handling departments on specific procedures to identify and address bribery threats).

 

1.3     However, for a brief overall summary, see the notes below which describe how the Policy addresses the key principles of the CIPFA Code.

 

Key Principle

Policy Approach

1 Ė Accept responsibility

Includes clear statements on the unacceptability of fraud (e.g. paras 1 to 7) and describing roles and responsibilities of individuals and groups (e.g. paras 13 to 28).

2 Ė Identify risks

Sets out an approach to identifying fraud risk (para 30), including reference to external and benchmarking data.

3 Ė Develop a strategy

Overall strategy set out in general procedures (paras 29 to 43) plus specific commitment for annual plan (para 31).

4 Ė Provide resources

Includes provision for specific annual plan (para 31) and oversight arrangements (para 43).

5 Ė Take action

Sets out response features (paras 39-40), including seeking sanctions and publicising success.† Also includes commitment to upholding training and awareness (para 38).

 

 

 

2.        AVAILABLE OPTIONS

 

2.1     The Council is not required to have a Counter Fraud & Corruption policy.† However, it is in keeping with the Councilís desired standards of governance to clearly set out its approach to identifying and tackling economic crime and affirming a robust approach to threat.† The Council does currently have a policy that, broadly, conforms to those aims and would allow (but not demand) the extra action set out in Appendix 1.

 

2.2     Members could, therefore, choose to keep the previous policy.

 

2.3     Alternatively, the Policy at Appendix 1 conforms to current best practice, in particular in recognising developments since the previous incarnation. It also sets out with more clarity our aims to keep our approach updated year to year for developing risk and providing results to Senior Management and Members. It also clarifies decision making around information and investigation.

 

 

 

3.        PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

 

3.1     We recommend approval of the Policy at Appendix 1.† This will direct a more comprehensive approach to tackling fraud and corruption. We will set that out in more detail in the Internal Audit & Governance Plan 2018/19.

 

 

 

4.       RISK

4.1    We have considered the risks associated with this proposal, including the risks if the Council does not act as recommended in line with the Councilís Risk Management Framework.† We are satisfied that the risks associated are within the Councilís risk appetite and will be managed as per the (Risk Management) Policy.

 

 

 

 

5.       CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

 

5.1     The Policy was circulated to the Director of Finance and Business Improvement last month and updated for comments.† The Policy will also be discussed at a Wider Leadership Team meeting on 9 January.† The Head of Audit Partnership will advise Members verbally of any further updates that arise from that meeting.

 

5.2     The Council is also a member of the CIPFA Counter Fraud Network.† Using that membership we have circulated the policy to CIPFA for comment.† The document at Appendix 1 reflects those comments.

 

5.3     We presented to Members in an informal briefing in November 2017 our outline plans for the Policy.† In a discussion following that presentation, Members made several points on areas to include, such as stressing the benefits of publicising successful prosecutions.† The Policy reflects the feedback from that discussion.

 

 

6.       NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

 

6.1     Once agreed, the Policy will inform preparation of our 2018/19 Internal Audit & Governance Plan.† Members will see that plan in the Spring and have opportunity to comment on the detail.

 

 

 

7.       CROSS-CUTTING ISSUES AND IMPLICATIONS

 

 

Issue

Implications

Sign-off

Impact on Corporate Priorities

We do not expect the recommendations will by themselves materially affect achievement of corporate priorities.  However, they will support the Councilís overall achievement of its aims by helping enhance the quality of corporate governance.

Rich Clarke

Head of Audit Partnership

3 January 2018

Risk Management

See section 4

Financial

The proposals set out in the recommendation are all within already approved budgetary headings and so need no new funding. It is consistent with the principles of good governance to have in place a robust Counter Fraud & Corruption Policy.

Section 151 Officer & Finance Team

Staffing

We will deliver the recommendations with our current staffing.† The Mid Kent Audit team includes 3 officers with relevant professional qualifications.† We will keep the required level of experience and expertise under review.

Head of Service

Legal

The Council is free to set out policies on how it will address economic crime risk and incidents.† The actions set out in the policy are within the Councilís powers, which include investigating incidents and (potentially) referring for prosecution.

Legal Team

Privacy and Data Protection

The Policy includes references to how we will use information to help identify and address risks of Economic Crime.† The Policy also sets out that we will share information with others where useful and efficient.

 

We will undertake all data sharing in line with applicable laws and policies.

Legal Team

Equalities

The recommendations do not propose a change in service that require an equalities impact assessment.

Rich Clarke

Head of Audit Partnership

3 January 2018

Crime and Disorder

The Policy aims to improve the Councilís approach in dealing with specific forms of crime.

Procurement

The Policy does not require any immediate procurement.† Any future procurement exercises for products or services that would enhance our approach will be undertaken in line with applicable Contract Standing Orders.

 

8.        REPORT APPENDICES

 

         Appendix 1: Counter Fraud and Corruption Policy

 

 

9.        BACKGROUND PAPERS

 

CIPFA Code of Practice for Counter Fraud - http://www.cipfa.org/services/counter-fraud-centre/code-of-practice

 

Existing Corporate Anti-Fraud and Corruption Policy - http://vindex/HR/Documents/Corporate%20Anti%20Fraud%20and%20Corruption%20Policy.pdf

 

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