Anti-Fraud and Corruption Strategy, Policy and Response Plan RTF
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Anti-Fraud and Corruption Strategy, Policy and Response Plan RTF Document Transcript

  • 1. GLA Anti-Fraud and Corruption Strategy , Policy and Response Plan October 2009
  • 2. Anti-Fraud and Corruption Strategy 1. Introduction 1.1 The Greater London Authority (GLA) is committed to protecting the public funds that it administers. The GLA is therefore determined to prevent, deter and detect all forms of fraud and corruption committed against it both internally and externally. In pursuing this aim the GLA will seek to adopt best practice and this Anti Fraud and Corruption Strategy will have due regard to the implementation of the recommendations made by the Nolan Committee, the Audit Commission and the Chartered Institute of Public Finance and Accountancy (CIPFA). 1.2 The objective of this document is to provide an Anti-Fraud and Corruption Strategy for the GLA. The Strategy is supported by the GLA’s Anti-Fraud and Corruption Policy and Response Plan. This Strategy is designed to integrate with the GLA’sorganisational objectives. In order to deliver the GLA’saims, it is necessary to maximise the available financial resources. Therefore this Strategy is designed to: • Reduce losses due to fraud and corruption to an absolute minimum; • Include all areas of the organisation and external stakeholders in relation to fraud and corruption; • Maintain a ‘zero- tolerance culture to fraud and corruption; ’ • Maintain a stance of providing a strong deterrent; • Undertake the detection and investigation of fraud and corruption; • Encourage sanctions and the implementation of recovery of monies where fraud is identified; and • Prevent fraud and corruption by designing and continuing to review policies and systems. 1.3 As part of its strategic risk management process, the GLA has to ensure that there is robust framework in place to mitigate the risk of fraud and corruption. The GLA is committed to an outcomes based strategy; that is, the achievement of a real reduction of losses, or the risk of losses, to the Authority. 2. The GLA’ s approach 2.1 The GLA’sapproach is to develop a corporate anti-fraud and anti- corruption culture and the prevention of fraud and corruption by designing, implementing and continuously reviewing policies and systems. This is further supported by the GLA’swork to detect and investigate fraud and corruption and seeking to apply sanctions and Page 2
  • 3. recover losses where it is found. Page 3
  • 4. 2.2 The application of the GLA’sStrategy to counter the risk of fraud and corruption is based on: • Awareness and training; • Prevention, including deterrence and detection; • Investigation; • Sanction; and • Recovery of losses. 3. Awarenes s and Training 3.1 The GLA is committed to ensuring staff and management are aware of their responsibilities with regard to preventing fraud and corruption. To this end, the GLA will ensure that there is an on-going training programme for staff regarding measures to minimise the risk of fraud and corruption. The GLA also recognise that the organisation is exposed to risk from external partners and suppliers. To this end, the GLA will ensure there is an on-going programme of awareness to ensure external partners and suppliers are aware of the GLA’scommitment to protect its funds against fraud and corruption. 4. Prevention, including Deterrence and Detection 4.1 The GLA recognises that the most efficient way to protect its assets is to undertake a scheduled plan of prevention work. This plan will include a programme of work directed at deterring fraud. It will also include fraud risk assessment work which will form part of the GLA’sstrategic risk management process. The Fraud Prevention Plan will be developed on an annual basis and include targeted prevention, deterrence, detection and fraud risk assessment actions. The Fraud Prevention Plan will be the responsibility of Internal Audit and will form part of the GLA’sInternal Audit Plan. 5. Investigation 5.1 The GLA is committed to investigating all suspected occurrences of fraud and/or corruption. The GLA will undertake all investigations pursuant to the Anti-Fraud and Corruption Policy and Response Plan. Page 4
  • 5. 6. Sanctions 6.1 The GLA is committed to pursuing all possible sanctions for proven cases of fraud and/or corruption. The GLA’sAnti Fraud and Corruption Policy and Response Plan will be adhered to regarding the appropriate level of investigation of suspected cases. The GLA is committed to pursuing internal disciplinary, criminal and civil sanctions where there is evidence to support the occurrence of fraud and/or corruption. These sanctions will be sought pursuant to the GLA’sAnti Fraud and Corruption Policy and Response Plan. 7. Recovery of loss e s 7.1 The GLA is committed to seeking to minimise any potential loss due to fraud and/or corruption. In all cases of suspected fraud the GLA will take action to minimise the risk of further loss. In all cases of proven fraud and/or corruption the GLA will take action where it is available to seek to recover any funds lost due to fraud. The provisions of the GLA’sAnti- Fraud and Corruption Policy and Response Plan will be adhered to in all instances. 8. Conclusion 8.1 The GLA's expectation on propriety and accountability is that the Mayor, Assembly Members, management and staff at all levels will lead by example in ensuring adherence to legal requirements, rules, policy and practices. The GLA also expects that individuals and organisations, e.g. suppliers, contractors and service providers with whom it deals, will act towards the GLA with integrity and without thought or actions involving fraud and corruption. 8.2 The GLA has in place a structure of systems and procedures to assist in the fight against fraud and corruption. These arrangements will be kept under review to ensure that all opportunities to take advantage of developments in techniques for preventing and detecting fraudulent or corrupt activity are maximised. This Strategy fully supports the GLA's desire to maintain a culture of openness, fairness, trust and dignity; free from fraud and corruption. 8.3 This Strategy will be subject to regular review as necessary. Page 5
  • 6. Anti-Fraud and Corruption Policy 1 Introduction 1.1 Fraud is estimated to cost the public sector billions of pounds every year and diverts resources from those who need them. Fraud also undermines public and political confidence in public services and can impact negatively upon staff morale across an organisation. The Greater London Authority (GLA) is committed to the values of probity and accountability that lead to a positive organisational culture. In developing such a culture the GLA will seek to prevent, detect, investigate and deter all forms of fraud and corruption. 1.2 The Mayor, Assembly Members and staff are expected to uphold the highest standards of conduct in public life. The Mayor and Assembly Members must ensure proper financial practice and adherence to all codes of ethics and standards, Financial Regulations and Standing Orders. The GLA expects that all individuals and organisations associated with the Authority will act with integrity and without intent to commit fraud or corruption. 1.3 The GLA requires staff and partners at all times to act honestly and with integrity in order to safeguard the public resources for which they are responsible. The GLA takes the risk of fraud and corruption extremely seriously and does not tolerate any level of fraudulent activity. The threat of fraudulent activity and impact on programme delivery is managed at the highest level within the Authority, with overall responsibility resting with the Chief Executive. The GLA subscribes to the seven principles of public life set out in the Nolan Committee first report, Standards in ’s Public Life, which appear at Appendix 1. 1.4 The first line of defence for an organisation against becoming the victim of fraud is professional staff, supported by the establishment and maintenance of carefully designed and consistently operated procedures. Managers have the prime responsibility for establishing internal control arrangements to minimise the risk of fraud or corruption and other irregularity within their areas of responsibility. 1.6 The GLA is committed to ensuring that opportunities for fraud or corruption are prevented and that all cases of internal and external fraud are investigated and reported in accordance with the Anti Fraud and Corruption Response Plan. This policy statement, along with the Response Plan, prescribes what the Mayor, Assembly Members and staff should do if they suspect fraud or any wrongdoing in any business associated with the GLA. By staff, this means all staff, whether they are full-time, part-time, agency staff or staff employed by any of the GLA’s contractors. Page 6
  • 7. 1.7 The principles outlined in this document support the overall framework of guidance for the Mayor and Assembly Members contained within their Code of Conduct. Page 7
  • 8. 2 Purpose of the Policy 2.1 The purpose of the Policy is to outline how the GLA will manage the risk of fraud and corruption. The Anti-Fraud and Corruption Response Plan that complements this Policy details how the GLA will respond to allegations of fraud, including who should be involved: • If an allegation is made; • During the investigation; and • In post investigation reporting. 3 Scope of this Policy 3.1 This policy is applicable to the Mayor, Assembly Members, employees of the GLA, temporary staff, secondees, contractors working within the GLA, and other relevant external stakeholders. 3.2 This Policy forms part of the GLA’sAnti-Fraud and Corruption Strategy. As part of that Strategy the GLA is committed to the prevention of the risk of fraud and corruption and as such will have an annual pro-active Fraud Prevention Plan. The Fraud Prevention Plan will follow the principles of this Policy. 4 Definitions of Fraud and Corruption 4.1 For the purposes of this Policy, the definition of “fraud” as covered in is the Fraud Act 2006 (see paragraph 4.2 below) and is characterised by dishonest acts, whereby the individual knowingly makes a false representation, (including by omission), with the intention of acquiring a gain for themselves and/ or others, or places the GLA at risk of a loss. It is important to note that the Fraud Act 2006 focuses on the ‘intention of’ the act, so whether there has been an actual gain or loss is immaterial to whether a fraud has been committed. Additionally, for the purposes of this Policy, fraud includes acts such as forgery, theft, extortion, bribery, embezzlement, misappropriation, false representation, concealment of material facts and collusion. Fraud can be perpetrated by persons outside as well as inside an organisation. 4.2 Many of the offences referred to as fraud were covered by the Theft Acts of 1968 and 1978 with fraud for practical purposes defined as the use of deception with the intent ion to obtain an advantage, avoid an obligation, or cause loss to another party. This definition implied deliberate intent and thus could exclude negligence. The Fraud Act 2006 makes it no longer necessary to prove a person has been deceived. The focus is now on the dishonest behaviour of the subject and their intent to make a gain Page 8
  • 9. or loss. Many cases are still likely to be prosecuted under the Theft Acts with the Fraud Act being used for matters after 15th January 2007. Page 9
  • 10. 4.3 For the purposes of this Policy, “corruption”is defined as the “offering, giving, soliciting or acceptance of an inducement or reward, which may influence a person to act against the interest of the organisation”. Corruption relates to rewards or inducements, such as bribes. Under the Prevention of Corruption Act 1916 any money, gift or consideration received by an employee in public service from a person or organisation holding or seeking to obtain a contract will be deemed by the Courts to have been received corruptly unless the employee proves the contrary. The criminal acts of corruption are covered in the Prevention of Corruption Acts 1906 and 1916. 4.4 The impact of fraud and/or corruption on the GLA could include the following: • Loss of resources (financial, staffing and other assets); • Reputation and brand damage; • Reputational impact on the GLA and/or the Mayor; • Negative cultural impact; • Outputs not delivered; • Damage to the GLA’srelationship with partners and stakeholders; • Disruption to service delivery; • Damage to the working relationships between the GLA’sstaff; • Investigation costs; and • Recruitment, retention and morale issues. 4.5 The impact on a staff member who has perpetrated a fraud could include: • Dismissal for gross misconduct; • Criminal proceedings potentially leading to a criminal record, fines and/or imprisonment; • Professional disbarring; • Serious damage to future employment prospects; and • Civil recovery of the value of resources lost as a result of the fraud. 5 Responsibilities 5.1 The Mayor and Assembly Members – The Mayor and Assembly Members have a duty to protect the assets of the Authority and avoid any suspicion of impropriety. The Mayor and the Assembly must ensure proper financial practice and adherence to all codes of ethics and Page 10
  • 11. standards, Financial Regulations and Standing Orders. The Mayor and Assembly Members are expected to conduct themselves in line with the regulations laid out in the Code of Conduct, and the seven Nolan principles for public life. These principles have been included at Appendix 1 to this document and are in summary: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. 5.2 The Audit Panel – The Audit Panel is the Assembly Committee with the responsibility for scrutiny oversight of the GLA’sAudit function. A specific responsibility of the Audit Panel is to ensure that there is an anti-fraud culture, and promote probity and good practice within the GLA. The Audit Panel reviews the Authority’sAnti-Fraud Policy and receives the reports of Internal Audit, External Audit and any other Investigating Officers where suspected fraud has been investigated. 5.3 The Standards Committee – The Standards Committee will advise Members on ethical codes of conduct and monitor compliance with local and national codes. The Committee will also take appropriate action on all matters involving the Mayor and Assembly Members where there may have been an alleged breach of the GLA’sCode of Conduct. In addition the Committee retains an oversight of policies relating to GLA officers and, along with the Assembly’sAudit Panel, receives and comments on the Authority’sAnnual Governance Statement. 5.4 GLA Directors – It is the responsibility of the directors to take steps as are reasonably open to them to prevent and detect fraud. This includes: • Taking steps to provide reasonable assurance that activities of the GLA are conducted honestly and that its assets are safeguarded including assessing the fraud risk involved in the operations for which they are responsible; • Ensuring, that to the best of their knowledge and belief, financial information, whether used in the GLA operations or for financial reporting, is reliable; • Establishing arrangements designed to deter fraudulent or other dishonest conduct and ensuring that these arrangements are complied with; and • Implementing new controls to reduce the risk of similar fraud where frauds have taken place. 5.5 GLA Managers – All staff in management positions are responsible for ensuring there are procedures and systems of internal control in place to safeguard the resources for which they are accountable. Management has a responsibility to ensure their staff are aware and comply with requirements of the GLA’sCodes of Ethics, Financial Regulations, and other GLA policies and regulations. Managers should identify all areas within their service that could be subject to fraud and corruption. Managers must satisfy themselves that adequate controls are in place to Page 11
  • 12. detect irregularities at the earliest opportunity. Internal Audit is there to support all managers in this role and they should be contacted if any manager requires advice or guidance. Page 12
  • 13. 5.6 GLA Staff – All staff are responsible for ensuring that their conduct complies with the Rules for Staff Conduct laid out by the GLA, and the seven principles of public life selflessness, integrity, objectivity, accountability, openness, honesty and leadership (see Appendix 1). Employees have a responsibility to carry out their duties carefully and honestly and to follow the GLA’sprocedures and guidance from managers. Such diligence will ensure that the GLA operates with integrity and in the best interests of the people of London. The GLA expects its Members and employees to lead by example in ensuring opposition to fraud and corruption. These responsibilities will be enacted in the following ways: • Complying with the law, the GLA’sFinancial Regulations and other policies; • Acting with propriety in the handling and use of official resources and public funds including via cash and payments systems, receipts, contracting and grant claims; • Conducting themselves in accordance with the seven principles of public life; • Being alert to the possibility that unusual events or transactions could be indicators of fraud; • Reporting details immediately through the appropriate channel if they suspect that a fraud has been committed or attempted or see any suspicious acts or events; and • Co-operating fully with whoever is conducting internal checks or reviews or fraud investigations. 5.7 Employees should always be aware of the possibility that fraud and corruption, including other offences such as theft and bribery, may occur in the workplace. All employees are encouraged to take a positive role in identifying all such irregularities. Employees should ensure that if they have any suspicions of such irregularities, they follow the clearly laid down procedures within the Anti-Fraud and Corruption Response Plan document. Page 13
  • 14. 5.8 GLA Auditors – It is not the Internal and External Auditors’responsibility to prevent fraud and error. The fact that an audit is carried out may, however, act as a deterrent. The primary role of Internal Audit is to provide an independent appraisal of internal controls within the GLA’s financial and management systems. In conducting this role, internal audit may identify financial irregularity. Internal Audit should consider the risks of fraud and corruption in the course of its assurance activities, and assist in the deterrence and prevention of fraud by examining and evaluating the effectiveness of controls. Management should ensure that the work of Internal Auditors and investigators is complementary. The role of External Audit is not to detect fraud and corruption. However, it has a duty to report any potential instances of fraud that it comes across in the normal course of its work. Other responsibilities of Internal Audit with regards to the anti-fraud culture of the organisation are listed below: • Act as an independent section for staff to report suspected frauds; • Maintain expertise on counter-fraud measures for the Authority; • Giving independent assurance on the effectiveness of the process put in place by management to manage the risk of fraud; • Providing or procuring any specialist knowledge and skills to assist in fraud investigations, or leading investigations where appropriate and requested by management; • Playing a part in responding to staff who use the Whistleblowing Policy; • Considering fraud risk in every internal audit undertaken; and • Maintaining the Fraud Prevention Plan as a component of the Internal Audit Plan. 5.9 Responsibility for corporately managing the risk of fraud is that of the Executive Director of Resources. His responsibilities in relation to fraud include: • Establishing an effective Anti-Fraud and Corruption Policy and Response Plan; • Designing an effective and proportionate control environment to prevent fraud; and • Establishing appropriate mechanisms for: (i) Reporting fraud risk issues; (ii) Reporting significant incidents of fraud to the Mayor and Assembly Members where necessary; and (iii) Co-ordinating assurances about the effectiveness of the Anti-Fraud Policy to support the Statement on Internal Control. Page 14
  • 15. 5.10 Human Resources – Human Resources is responsible for: • Providing advice and support to management in implementing suspensions and any subsequent disciplinary investigation including advising on the application of the GLA’sDisciplinary Policy; • Ensuring employment matters are dealt with in a consistent and fair way regarding any case of suspected fraud; and • Being an integral part of the Fraud Response Group, where the suspected fraud involves a member of staff. 5.11 Service Users and Members of the Public – If service users or the public have any suspicions regarding irregularities within the GLA, including the Mayor, Assembly Members and staff, they are positively encouraged to report such concerns directly to the Executive Director of Resources, Internal Audit or via the GLA’sComplaints Procedure or Fraud Hotline. 5.12 The Role of Contractors, Partners and Other Associated Bodies – Contractors, partners and other bodies working with the GLA are expected to conform to the same high standards of conduct and integrity that the GLA operates to. Such partners: • Are expected to have adequate internal controls in place to prevent fraud and corruption that may affect the name of the GLA; and • Must co-operate with the GLA’santi-fraud activity. 6 Fraud Response Plan 6.1 The GLA’sAnti Fraud and Corruption Response Plan details the GLA’s procedures for responding to any incidents of suspected fraud. The Response Plan sets out how suspicions should be raised and how investigations will be conducted and concluded. The Response Plan should be read in conjunction with this Anti-Fraud and Corruption Policy. 7 Confidential Reporting 7.1 The GLA has a whistleblowing policy which encourages staff to report suspected instances of fraud in an open yet confidential manner. This Policy follows the principles as laid down in the Public Interest Disclosure Act 1998. Staff are actively encouraged to report genuine suspicions and are required to co-operate with any Internal Audit activity. Their anonymity will be respected and they will not be discriminated against for making reports. Page 15
  • 16. 8 Prosecution 8.1 Where initial evidence suggests that a criminal offence has been committed the Executive Director of Resources will be consulted, via the Fraud Response Group, about a referral to the police. Informal advice may be sought from the police by the Assistant Director of Finance or the Finance Manager at an early stage in an investigation as this may affect the way the investigation is conducted. 8.2 It is the policy of the GLA that where there is prima facie evidence that a criminal offence has been committed then the case will be referred to the police for investigation. This does not affect disciplinary action or civil recovery and those who perpetrate fraud will be liable to these sanctions as well as possible prosecution. Liaison will take place with the police to ensure that any other action instigated under the Response Plan does not prejudice or interfere with criminal proceedings. 8.3 Where there is a requirement for GLA staff to liaise with the police, the GLA will provide all support and assistance that may be required, or that any GLA staff member feels that they need in assisting the police. This support is extended to staff who are potential witnesses in matters regarding the prosecution of fraud. It does not extend to any employees or contractors who are subsequently charged by the police with fraud offences committed against the GLA. 9 Sanctions 9.1 Staff suspected to be involved in fraudulent activity may be subject to one or all of the following sanctions: • Disciplinary with dismissal sought where the offence is considered to constitute ‘grossmisconduct pursuant to the provisions of the GLA’s ’, Disciplinary Policy; • Criminal where the relevant law enforcement agency considers it to be in the public interest to pursue a prosecution; • Civil recovery of monies or assets fraudulently acquired; and • Profes sional disbarring whereby the GLA will make a referral to the employee professional regulatory bodies where appropriate. ’s Page 16
  • 17. 10 Money Laundering 10.1 Money laundering is a process by which the proceeds of crime are converted into assets which appear to have a legitimate origin, so that they can be retained permanently or recycled into further criminal enterprises. Legislation defines money laundering as ‘concealing, converting, transferring criminal property or removing it from the UK; entering into or becoming concerned in an arrangement which you know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person; and/or acquiring, using or possessing criminal property.’ The Money Laundering Regulations 2007 apply to cash transactions in excess of €15,000 (approximately £10,000). However, the Proceeds of Crime Act 2002 applies to all transactions and can include dealings with agents, third parties, property or equipment, cheques, cash or bank transfers. 10.2 Offences covered by the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 may be considered and investigated in accordance with this Policy and the Anti-Fraud and Corruption Response Plan. 11 Conclusion 11.1 The GLA takes fraud and corruption extremely seriously and actively seeks to prevent any level of fraud. All cases of actual or suspected fraud or corruption will be vigorously and promptly investigated and appropriate action will be taken. Staff must report suspected fraud or other suspicious activity immediately. Page 17
  • 18. Anti-Fraud and Corruption Response Plan 1 Introduction 1.1 The purpose of the GLA’sAnti-Fraud and Corruption Response Plan is to define responsibilities for action and reporting lines in the event of a suspected fraud, corruption or irregularity. The use of the Plan should enable the GLA to prevent loss of public money, recover losses and establish and secure the evidence necessary for any civil, criminal or disciplinary action. 1.2 The Response Plan should also provide direction to take appropriate action against those responsible for any fraud or irregularity, deal with requests for references for employees who have been disciplined and/ or prosecuted for fraud, review the reasons for the incident, the measures taken to prevent a recurrence, and any action needed to strengthen future responses to fraud. 1.3 The Response Plan complements the Anti-Fraud and Corruption Policy and forms part of the overall Anti-Fraud and Corruption Strategy of the GLA. 2 Reporting suspected fraud 2.1 Staff must raise any concerns they have on issues of dishonesty, fraud, corruption, money laundering, and other suspicions of maladministration associated with the GLA. The GLA’s Whistleblowing Policy is intended to encourage and enable staff to raise concerns within the GLA. 2.2 There is a clear link between the Whistleblowing Policy and the Anti- Fraud and Corruption Response Plan. The anonymity of employees who make allegations will be protected under the Public Interest Disclosure Act 1998 and any discrimination against such a person will be a disciplinary offence. However, it will also be a disciplinary offence for employees who maliciously or intentionally make false accusations. 2.3The first point of contact for staff to raise their concerns is usually their line manager. However, staff can also report their concerns direct to Internal Audit or the Executive Director of Resources, in accordance with the Response Plan. Staff can also utilise the GLA’s confidential Fraud Reporting Line to raise their concerns. The Fraud Reporting Line is operated by trained staff who will take the initial details of the concern and report them through to the Assistant Director of Finance or the Finance Manager for further consideration. Staff are encouraged to provide their details when raising a concern, Page 18
  • 19. however calls made to the Fraud Reporting Line may be made anonymously. All contact details are listed at the end of this document. 2.4Regardless of the initial reporting contact, all suspicions of fraud raised are to be reported to the Executive Director of Resources. If a concern relating to fraud is reported to a line manager, the manager must report this concern to the Executive Director of Resources before taking any action. Page 19
  • 20. 2.5Wherever possible, staff should retain any evidence and/or make immediate notes, as this will assist the investigation. As the quality of evidence is crucial, the more direct and tangible it is, the better the chance of a successful investigation. Staff should not conduct their own investigations, seek to gather evidence, or conduct surveillance activities with regard to any report or suspicion of fraud. 3 Preliminary ‘fact-finding’ 3.1 Upon receipt of a referral, the Assistant Director of Finance will initially review the information to ascertain whether there is cause for concern. There will be instances, when suspicions are unclear or there is no substantial evidence, where the Assistant Director of Finance requests preliminary ‘factfinding’ take place. This fact- to finding work will be led by an appropriately qualified fraud investigator, nominated by and under the direction of the Assistant Director of Finance. This would normally be the Finance Manager leading on anti-fraud measures. Internal Audit will also be responsible for assisting the Assistant Director of Finance with any fact-finding work required. 3.2 Where preliminary ‘fact- finding’identifies evidence of fraud or attempted fraud, the case will be referred to the Executive Director of Resources who will convene the Fraud Response Group. This is to ensure that any investigation is conducted in a professional manner with the objective of ensuring that the interests of both the GLA and the suspected individual(s) are protected. 3.3 Alternatively, where preliminary fact finding enquiries do not identify evidence of fraud or attempted fraud the following outcomes are likely: (a) no further investigative work is required although internal controls may need to be strengthened; and/or (b) the matter should be dealt with under other GLA policies. 3.4A record will be kept of all referrals received by the Assistant Director of Finance. This will be reviewed annually by the Executive Director of Resources and the Audit Panel. 3.5When the Executive Director of Resources is notified of a suspected fraud, s/he will ensure that an entry is made into the Special Investigation Register. All entries into the register will be sequentially numbered so there is a continuous record of all entries. The Investigations Register will be maintained by the Finance Manager leading on anti-fraud measures. An example of the Special Page 20
  • 21. Investigation Register is shown at Appendix 2. All notifications of suspected fraud will be entered, regardless of whether the notification was made anonymously or not. Page 21
  • 22. 4 Fraud Response Group 4.1 Where evidence of a fraud is identified, the Executive Director of Resources will convene the Fraud Response Group. This will not prevent or delay immediate referral to the police in appropriate cases where such action is required. The Group will consist of the following staff (or individuals nominated by those staff in their absence): • Executive Director of Resources (Chair); • Head of Service of the area in which the suspected fraud has occurred; • Assistant Director of Finance; • The Finance Manager leading on anti-fraud measures; • Chief Internal Auditor; and • Head of Human Resources (where the fraud involves a GLA member of staff). 4.2 The Fraud Response Group will decide whether the situation merits investigation and will also agree and initiate where necessary other urgent actions, such as the closing of system weaknesses, stopping payments, informing insurers, applying for freezing injunctions and requesting and acting upon advice from the Head of Legal. 4.4 The Fraud Response Group will meet on an on-going basis in relation to any developments and findings. 4.5 Where for good reason it is not appropriate to involve a member of the Fraud Response Group, an independent route is available via the Chief Executive or through the Chair of the Audit Panel, who will in such cases, carry out duties as per the Response Plan. If the Executive Director of Resources is suspected of fraud and corruption, then the suspicion must be reported to the Chief Internal Auditor or the Chair of the Audit Committee or the Mayor. If police involvement is necessary, then the Chief Internal Auditor will consult with the Fraud Response Group prior to the Police being brought to the GLA. Where necessary the Mayor will liaise with the police. 5 Fraud Investigation 5.1 On the decision being made that an investigation will be undertaken, the Assistant Director of Finance will nominate an appropriately qualified investigator – normally the Finance Manager leading on anti- fraud measures – to undertake the investigation, the ‘Investigating Officer The investigation will consist of, but not be limited to, the ’. interviewing of all necessary witnesses by the Investigating Officer, Page 22
  • 23. and the collection and analysis of all relevant records available. The investigation must be carried out by appropriately trained staff – normally the Finance Manager leading on anti-fraud measures – and must follow the requirements of relevant GLA policy and statute legislation. The Assistant Director of Finance may seek direction and/ or assistance from Internal Audit. Page 23
  • 24. 5.2 The Executive Director of Resources and the Assistant Director of Finance will determine whether external investigation resources are required. The Executive Director of Resources and the Assistant Director of Finance must be satisfied that whoever is appointed as Investigating Officer has the requisite knowledge of criminal law, the requirements of the Response Plan, and GLA policy that relates to disciplinary investigations to ensure the interests of the individual(s) being investigated and the GLA are being met. The Investigating Officer will normally be the Finance Manager leading on anti-fraud measures. 5.3 The Investigating Officer appointed will be in charge of the investigation on a day-to-day basis and will report to the Assistant Director of Finance. In cases where investigative work leads to a widening of the scope, any new terms of reference will be agreed by the Assistant Director of Finance, prior to that additional work taking place. 5.4 In the early stages of any fraud investigation the Assistant Director of Finance, in conjunction with the Investigating Officer, will make an assessment on the appropriateness of referring the matter to the police. The Assistant Director of Finance will report any assessment back to the Fraud Response Group prior to any final decision on action being made. 5.5 Where necessary, the Assistant Director of Finance and the Investigating Officer will liaise with the Head of Human Resources on matters that may concern or influence any disciplinary proceedings. 5.6 Where the need for the investigation arises out of a GLA staff member raising a concern, the Investigating Officer will hold a preliminary interview(s) with the person(s) raising a concern. It is to be made clear that, provided any allegation is made in good faith, they will be protected by the GLA’sWhistleblowing Policy. 5.7 If the subject of an investigation is to be interviewed by the Investigating Officer, the Fraud Response Group must ensure the Investigating Officer is appropriately trained and a decision has been made as to whether the interview is for internal disciplinary purposes or for the suspicion of a criminal offence. Interviews for a criminal offence should not be undertaken by staff who are not trained in the requirements of the Police and Criminal Evidence Act 1984. Such interviews should only occur if the police have been consulted regarding the prospect of a criminal prosecution. 6. Preventing further loss 6.1 Where initial investigation provides reasonable grounds for suspecting a member or members of staff or others of fraud, the Page 24
  • 25. Fraud Response Group will decide how to prevent further loss. This may require the suspension of the subject or subjects, under the appropriate disciplinary procedure. It may be necessary to plan the timing of suspension to prevent the subject(s) from destroying or removing evidence that may be needed to support disciplinary or criminal action. Any decision to suspend will follow the usual policy requirements laid down by Human Resources. Page 25
  • 26. 6.2 In these circumstances, the subject or subjects will be approached unannounced and will be supervised at all times before leaving the GLA’spremises. They should be allowed to collect personal property under supervision, but should not be able to remove any property belonging to the GLA. Any security passes and keys to premises, offices and furniture will be returned. System logins should also be suspended along with remote access to the GLA’scomputer system. 6.3 The Fraud Response Group will consider whether it is necessary to investigate systems other than that which has given rise to suspicion, through which the subject may have had opportunities to misappropriate the GLA’sassets. 7 Dealing with employees under suspicion 7.1 The Fraud Response Group will: • Assess whether there is a need for any employee to be suspended. The decision should be kept under review throughout the investigation. The Head of Service of the member of staff concerned should be kept informed where appropriate; • Identify a course of action, including, following consultation with the Police, whether to interview the employee under suspicion; • Where considered necessary, require the Investigating Officer to arrange a search of the suspected employee work area including ’s IT use. The Fraud Response Group must ensure that the Investigating Officer has the appropriate knowledge to conduct any such searches legally both under civil and criminal law so as not to expose the organisation to any undue risk; • Allow trade union assistance if requested, to support individuals and to ensure the integrity of the evidence; and • Ensure that strict confidentiality is maintained. This will include ensuring that channels of communication, record keeping and meeting locations are secure and confidential. 7.2 Human Resources will support all staff affected by a fraud investigation, whether directly or indirectly, including directing individuals towards sources of counselling and advice and applying relevant policies. 8 Reporting 8.1 The Investigating Officer shall provide the Fraud Response Group with periodic confidential updates throughout the investigation, including: Page 26
  • 27. • Circumstances surrounding the case; • Progress with the investigation; • Quantification of losses where possible; • Progress with recovery action; • Progress with disciplinary action; • Progress with criminal action; and • Estimate of resources and actions required to conclude the investigation. 8.2 The Fraud Response Group will decide what, if any, specific action should be taken as a result of the investigation and, more generally, actions to be taken to prevent and detect similar incidents. 8.3 On completion of the investigation, the Investigating Officer will submit a confidential written report to the Fraud Response Group, containing: • A description of the incident, including value of any loss, people involved and the means of perpetrating fraud; • Outcome of the investigation; • The measures recommended to be taken to prevent a recurrence; and • Any action recommended to strengthen future responses to fraud. 9 Confidentiality 9.1 No audit, fact-finding or investigation report or documentation is to be made available to any person outside the Fraud Response Group except as required for any legal reason. Staff who contravene this rule could be liable to action under the GLA’sdisciplinary procedures. 9.2All evidence that is accumulated to support a disciplinary investigation will normally be held for a period not less than equivalent to the requirements of the GLA’sDisciplinary Policy. This information will be held by the Executive Director of Resources or by an officer he decides as appropriate. 9.3The Police will normally hold all evidence that is accumulated to support a criminal investigation. However, if the evidence is held by the GLA, all such information must be held for six years. 10 Contacting the Police Page 27
  • 28. 10.1 The GLA recognises that the experts in investigating crime are the police, and that internal investigations have the potential to prejudice police investigations. The Executive Director of Resources will have the responsibility for requesting police involvement and liaising with them after close consultation with the Fraud Response Group. Where it appears more appropriate the Chief Executive may assume the role of contact point with the police. 10.2 Any such request for police involvement will normally follow the conclusion of the preliminary ‘fact-finding’exercise by the Assistant Director of Finance where the Executive Director of Resources considers, following advice from the Fraud Response Group, that there is a potential criminal case. 10.3 If the Police decide that a criminal investigation is necessary, the internal investigation and the police investigation will be co-ordinated to ensure optimum use of resources and information and to avoid jeopardising the police investigation. In all cases, the advice of the police will be followed to avoid the risk of alerting subjects or the contamination of evidence. Page 28
  • 29. 10.4 All staff will co-operate fully with any requests of police and of the internal investigation. All contact with the police following their initial involvement will be via the Investigating Officer or the Executive Director of Resources. 10.5 The GLA may progress its own internal investigation in accordance with this Anti-Fraud and Corruption Response Plan where the police advise that a formal police investigation is not appropriate or are content that the internal investigation will not hinder the criminal investigation. 11 Linkage between criminal and disciplinary proceedings 11.1 Where the outcome of a police investigation results in a criminal conviction or an internal fraud investigation concludes that, on a balance of probabilities, a fraud has occurred by a staff member, the GLA’sDisciplinary Policy may be invoked. This process is informed by the investigation and is to be managed by the relevant Head of Service. Guidance from the Fraud Response Group and Human Resources must be sought by the relevant Head of Service before taking disciplinary action following a fraud investigation. Reference and adherence to the Disciplinary Policy is required in these circumstances. 11.2 In the circumstance where there is an on-going police investigation, it may still be appropriate for the GLA to proceed with a disciplinary investigation. Prior to commencing any internal disciplinary investigation, advice is to be sought from the police to ensure there will be no compromise of any on-going police investigation. The interests of the GLA must be taken into account in these circumstances and the Fraud Response Group will take a decision as to whether to instigate internal disciplinary proceedings in parallel with an on-going police investigation. 12 Civil recovery 12.1 Recovering losses is a major objective of any fraud investigation. The Investigating Officer shall ensure that in all fraud investigations, the amount of any loss will be quantified as far as possible. Repayment of losses should be sought in all cases. 12.2 Where the loss is substantial, legal advice may be obtained about the need to freeze the subject's assets through the court, pending conclusion of the investigation. Legal advice may also be obtained about prospects for recovering losses through the civil court, where the subject refuses repayment. The GLA will normally seek to recover Page 29
  • 30. its costs in addition to any losses as a result of the fraud. Clarification should be sought from the Head of Legal on the appropriate action on a case-by-case basis. 13 Profes sional disbarring 13.1 As a deterrent to fraud the GLA will make referrals regarding fraud cases to individual’sprofessional regulatory bodies in order for them to initiate their own disciplinary proceedings. Once again, care should be taken to ensure such a referral does not impact upon criminal investigations. Any such referrals will be co-ordinated by the Assistant Director of Finance. Page 30
  • 31. 14 Media liaison 14.1 The Chief Executive, following advice from the Executive Director of Resources and the Fraud Response Group, will have responsibility for deciding upon an appropriate approach to deal with the media and regarding internal communications during and after the investigation with advice from, and liaison with, the Director of Communications. 15 Further Reporting and Counter Fraud Management 15.1 The Executive Director of Resources will decide how to provide, in confidence, feedback to the person(s) who raised the initial concerns. 15.2 The Audit Panel will receive, as part of Internal Audit’sannual report, summary information of the fraud referrals during the year. 15.3 The GLA’sAnti-Fraud Policy and Response Plan will be reviewed annually. 15.4 The GLA has a duty to report all suspected frauds in excess of £10,000 and all cases of corruption to its external auditors. The Executive Director of Resources will formally advise the external auditors of the commencement of all suspected fraud investigations via submission of the AF70 fraud reports. These forms will be submitted to the Audit Commission via governance- data@audit- as required. 16 Dissatisfaction with the Investigation 16.1 Any complaints about the Investigation should be referred under Grievance Procedure as appropriate. FRAUD REPORTING – CONTACT DETAILS Title Name Telephone No. Executive Director of Martin Clarke 020 7983 4435 Resources Assistant Director of Finance David Gallie 020 7983 4000 Finance Manager Tom Middleton 020 7983 4257 Page 31
  • 32. Deloitte – Internal Audit Mike Clarkson or 07831748135 Richard Neal 07769952078 Confidential Reporting – Fraud Reporting Line 0800 3280109 operated by Deloitte Page 32
  • 33. Appendix 1 The Seven Principles of Public Life These standards, known as the Nolan principles, apply to all in the public service including the Mayor, Assembly members and employees, temporary staff, secondees and contractors working within the GLA. Selfles sne s s Holders of public office should act solely in terms of the public interest. They should not do so in order to gain financial or other benefits for themselves, their family or their friends. Integrity Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might seek to influence them in the performance of their official duties. Objectivity In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit. Accountability Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office. Opennes s Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands. Honesty Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest. Leadership Holders of public office should promote and support these principles by leadership and example. Page 33
  • 34. Appendix 2 FORMAT OF SPECIAL INVESTIGATION REGISTER Fraud Date Fraud How was Person Person Who Brief Details of Who tasked Executive Director of Investigation Reported Suspicion Reporting First Received Suspicion with Resources Approval Number Reported Suspicion Suspicion Investigating of Investigation 1 11 June Line A. N. Other J. Bloggs Money taken from Internal J. Jill 2001 Management Donations Box Audit 2 13 June GLA Fraud Anonymous T. Boss Stolen Computer Internal J. Jill 2001 Line Audit