Fraud Prevention Policy and Procedure

Transcription

1 1 Fraud Preventin Plicy and Prcedure 1. Aim The Library is cmmitted t taking all practicable steps t prevent all types f fraud within the rganisatin (internal fraud) and t prevent the rganisatin being defrauded by external bdies (external fraud). 2. Purpse This dcument gives guidance n the preventin f fraud. The Library is mre likely t deter fraudsters if we are fully aware f the risks, keep cntrl systems under regular review, and respnd effectively whenever fraud is suspected r discvered. If fraud is suspected, please refer t the Library's Fraud Respnse Plicy and Prcedure. 3. Principles All Library staff have a duty t prevent fraud and t cperate in the detectin f fraud The existence f prper cntrls lessens the pprtunity fr fraud Managers have the respnsibility fr designing, perating and reviewing cntrl systems t minimise the risk f fraud ccurring Prcedures set up t prevent and detect fraud must be fllwed withut exceptin. Many frauds are due t failures t cmply with existing cntrl prcedures, plicies and regulatins The Library will nt victimise r therwise disadvantage staff wh raise cncerns abut fraudulent activity in gd faith, even if the allegatins turn ut t be unfunded. (Please als refer t the Whistleblwing Plicy.) Internal and external auditrs will frm time t time carry ut independent reviews f systems and the adequacy f cntrls in place.

2 2 4. Definitin f fraud Fraud is defined as the btaining f financial advantage r causing lss by implicit r explicit deceptin. This can include: Making false representatin Failing t disclse relevant infrmatin Abuse f psitin. Attempted fraud is treated as seriusly as accmplished fraud and is als cnsidered as a criminal activity. Fraud can be carried ut by single members f staff, cntractrs, custmers r thers, r by grups f peple acting tgether. Fraud can include: Theft r misapprpriatin f mney r ther assets such as statinery supplies r equipment Theft f cllectin items Diversin f incme Breaches f prcurement rules fr persnal r family gain Misuse f gds and services fr an unauthrised purpse Misuse r falsificatin f expenses Illegal invices Duble-billing fr the same delivery Misrepresented quality r value f purchased materials Mney transfer fraud, e.g. via scam s r phne calls. Fraud techniques are varied but can include: Making false statements Falsifying recrds Setting up bank accunts and diverting funds t them Rigging prcurement prcesses Falsifying cpyright wnership Tampering with cmputer systems.

3 3 The higher the stakes, the mre elabrate the peratin can be. 5. Danger signs internal fraud Evidence f excessive spending by staff engaged in cash/cntract wrk Inapprpriate relatinships with suppliers Reluctance f staff t take leave Requests fr unusual patterns f vertime Undue pssessiveness f recrds. Reluctance t take leave and ver-pssessiveness f recrds culd suggest there is smething t hide, and abnrmal patterns f vertime culd be used t achieve unauthrised access t recrds and systems. Junir staff shuld resist any pressure frm line management t circumvent internal cntrls r t ver-ride cntrl mechanisms. Such actin culd be indicative f fraudulent activity and shuld be reprted. 6. Respnsibilities 6.1 Respnsibilities f all staff Fllw all prcedures set up t prevent and detect fraud withut exceptin Reprt suspected fraud t their Head f Department, r directly t the Head f External Relatins and Gvernance, prmptly If staff feel unable t raise the matter with any member f Library staff, ur Internal Audit cntractr Hendersn Lggie prvides a pint f cntact independent f Library management. Any infrmatin it receives will be dealt with in cnfidence and acted n as necessary. Hendersn Lggie has access t the Audit Cmmittee Chair if they cnsider the matter is nt being adequately dealt with The cntact pint at Hendersn Lggie is: Stuart Inglis n Respnsibilities f managers Be aware f the risks f fraud Ensure all staff are aware f their respnsibilities, and f the plicies and prcedures in place t mitigate the risk f fraudulent activity

4 4 Design, perate and review cntrl systems t minimise the risk f fraud ccurring Balance administrative simplicity and efficient peratin with the respnsibilities and csts f safeguarding public assets. The degree f cntrl within a system shuld be based n a clear and up-t-date assessment f the risks invlved, the cnsequences f failure and the resurce csts f eliminating r reducing these factrs Frmally review key r high risk systems at least annually t assess whether they are adequate, and the cntrls are effective, r if the systems and degree f cntrl are ver-elabrate Cnsult with the Finance Department where new cntrl prcedures are being set up r significant changes t existing prcedures are being prpsed Put in place preventive and detective cntrls Managers with respnsibility fr prcurement (including the award f minr cntracts and small purchases), making payments, authrising grants and similar activities must ensure they and their staff fllw the prcurement plicies Business areas with significant grant-giving respnsibilities must cmply with the Award f Grant Plicy. Guidance fr managers is available in the Fraud sectin f the Scttish Public Finance Manual (SPFM). 6.3 Respnsibilities f the Finance and Prcurement departments Ensure cre financial systems are designed and perated s as t minimise the risk f fraud: Ensure payment prcedures include a check that invices have been prperly authrised Ensure expense prcedures include a check that the expenditure has been prperly incurred fr business purpses Ensure accunting and ther recrds, such as cash balances, bank balances, physical stck cunts, are recnciled with the actual psitin Ensure there are prper and adequate budgetary delegatins and cntrls in place. Ensure rbust prcurement plicies and prcedures are in place t ensure the risk f fraud is minimised

5 5 Maintain up-t-date guidance and prvide advice t managers n cntrl prcedures Ensure staff cmply with guidance/instructins issued abut these systems. 6.4 Respnsibilities f Heads f Department Set up prper systems f cntrl fr their areas f respnsibility and ensure strict cmpliance and regular review In these areas assessed as having the greatest risk f fraud, give particular attentin t cntrl systems Ensure there is adequate separatin f duties. Withut adequate separatin f duties the effectiveness f ther cntrl measures is undermined. Where resurces are limited and separatin f duties is nt pssible, apprpriate cmpensating management cntrls must be emplyed Keep a recrd f frmal reviews f key r high risk systems carried ut by managers, fr reprt in the HD's annual Letter f Assurance declaratin. 6.5 Respnsibilities f the Head f External Relatins and Gvernance Ensure fraud prcedures are accessible and regularly updated Ensure staff dealing with fraud prcedures receive apprpriate training, supprt and supervisin Ensure a risk-based internal audit service is in place cvering with greater frequency thse areas where the risk f fraud is greatest. 6.6 Respnsibilities f the Natinal Librarian Overall respnsibility fr ensuring cntrl systems and prcedures are in place rests with the Natinal Librarian, as Accuntable Officer. 7. Related Plicies See als the Library's Discipline Plicy and Prcedure; Gifts, Fees, Hspitality, Bribery and Crruptin Plicy; Whistleblwing Plicy; and Fraud Respnse Plicy and Prcedure.