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PREVENTION

NAV3a


The purpose of this set of standards is to ensure you have a clear risk based fraud strategy aligned to the delivery of your organisational objectives, with strong executive support and proportionate resources available to tackle the problem.

1A - Risk Management

Area of Action

Fraud and corruption risks should be considered as part of the organisation’s risk management arrangements.

Risk
The organisation may fail to highlight the importance and potential impact and likelihood of fraud.

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1B - Executive Support

Area of Action

There needs to be strong executive support for work to counter fraud and corruption.

Risk
If this support is not strong/apparent, then:

  • Executive and Non-Executive Directors may not be aware of counter fraud roles and responsibilities.
  • Staff will see the policy as a paper exercise with no real meaning
  • There could be a lack of investment in counter fraud which will demonstrate the organisation's lack of commitment to counter fraud work.

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1C - Senior Management Accountability

Area of Action

The organisation should create 'ownership' of fraud risks by identifying a member of senior management as having responsibility for managing all fraud risks within the organisation and by explicity communicating to business unit managers that they are responsible for managing fraud risks within their area?

Risk
The Fraud Strategy will lack drive and focus and managers will assume it is someone else's responsibility and therefore fraud risks will not be effectively managed at an operational level.

 

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1D - Clear Policy and Strategy

Area of Action

The organisation should have a counter fraud and corruption policy and strategy that can be clearly linked to the organisation's overall strategic objectives.

Risk

Stakeholders will not be aware of local counter fraud arrangements and the organisation's commitment to reduce fraud and corruption to an absolute minimum.

Staff may take inappropriate action when dealing with suspicions of fraud.

The organisation's counter fraud arrangements will lack focus.

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1E - Effective Proactive and Reactive Work

Area of Action

There should be effective links between proactive 'policy' work and reactive 'operational' work to detect and investigate fraud and seek to apply sanctions and recover losses where fraud is found.

Proactive work includes:

  • creating a strong deterrent effect through the development of an anti-fraud and corruption culture; and
  • preventing fraud by designing fraud and corruption out of policies and systems.

Risk

Policies will not be aligned and will contradict each other, this may result in reduced capacity to undertake criminal investigations which may in turn be compromised by inappropriate actions.

There will be an absence of clear links leading to uncertainty and no defined responsibilities regarding other functions within the organisation.

Counter fraud work will not be cohesively linked and intelligence from reactive work will not be used to take preventative measures to reduce fraud to an absolute minimum.

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1F - Accurate estimate of fraud losses

Area of Action

The organisation should use accurate estimates of losses to make informed judgements about levels of budgetary investment in work to counter fraud and corruption.

Risk

Resources and investigation into work to counter fraud and corruption may not be reflective of the organisation's needs.

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1G - Proportionate Financial Investment

Area of Action

The  level of financial investment in work to counter fraud and corruption should be proportionate to the risk that has been identified.

Risk

Resources may be limited and not reflective of the organisation's local requirements.

The organisation may fail to benefit from effective counter fraud arrangements because investment is restricted.

Local risks will not be clearly highlighted.

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