Can capability conquer fraud?

16-11-2016

We’re now halfway through International Fraud Awareness Week and halfway through our articles exploring the six key themes from the Fighting Fraud and Corruption Locally strategy.

Today, we’re focusing on capability, which is closely linked to yesterday’s topic of capacity.

But while capacity is about making an honest appraisal of the fraud risks faced and the resources needed to tackle them, capability is knowing how to deploy these resources in the most effective way.

All change

Today’s working environment presents an array of challenges for local authorities and their employees.

Criminals are notoriously enterprising, which means new types of fraud emerge on a regular basis, while some fraud types are more prevalent in particular parts of the country. These factors make a ‘one size fits all’ approach to tackling fraud inappropriate and potentially very wasteful.

Inside local authorities, the situation is just as uncertain and challenging. Counter fraud professionals are responding to staff changing roles, increasing pressure on budgets, lean teams and reduced access to resources.

Effective resourcing

‘Use resources effectively’ has become the mantra of many organisations in the current post-austerity climate, and this is central to the capability theme.

As highlighted in the Fighting Fraud and Corruption Locally strategy, “local authorities should make use of the right number of properly skilled counter fraud and corruption staff, adopt best practice standards, make use of tools and technology, and generate economies of scale through collaboration.”

In a rapidly evolving environment, local authorities need to be both nimble and resilient to prevent fraud and corruption. Achieving this means keeping resources up-to-date and ensuring the response is always proportional to the threat. 

After all, there is little merit to investing large sums, assets and talent to an area where there is little or no risk of fraud.

Take stock

A practical guide for counter fraud practitioners, the Fighting Fraud and Corruption Locally companion document, recommends a two-step process when determining capability within a local authority. 

Firstly, assess and identify the appropriate level of resources required for the level of fraud risk – what we talked about yesterday when looking at capacity. Secondly, implement the right capabilities so that these resources are deployed in the most effective way.

Examples of capabilities

The companion document recommends authorities have in place a range of plans, procedures and policies:

  • An up-to-date fraud response plan ­
  • Anti-money laundering policies and response documents ­
  • Reporting procedures ­
  • The right powers and access to the right people ­
  • Use of appropriate technology ­
  • A costed plan that can support relevant activity

These will provide the solid foundation needed to ensure valuable, finite resources are maximised.

Of course capabilities also include a common set of standards for those working in counter fraud and for these individuals to have the proper training and an understanding of whole picture within counter fraud.

We’ll look at this in more detail in our next article on competence.   

Where to go for help

The Fighting Fraud and Corruption Locally Checklist­ covers the capabilities listed above and more. It’s great for assessing whether your authority has the right ingredients to create an effective counter fraud and corruption culture and response.

Did you know that the CIPFA Counter Fraud Centre has an advice line? We work with both local and central governments to develop their counter fraud capabilities. To speak to a member of the CIPFA team for further advice telephone 0207 543 5600.

Our Certificate in Fraud Risk Management delivers the in-depth skills and knowledge needed to create an effective risk management framework. The qualification is ideal for those wanting detailed instruction on devising and implementing a fraud response plan.

Finally, the CIPFA Code of Practice on Managing the Risk of Fraud and Corruption sets out the principles that define the governance and operational arrangements necessary for an effective counter fraud response. The Code’s assessment tool can help you to identify how strong your capabilities are and where remedial action may be needed.

Do you have examples of best practice?

Contrasting and comparing your local authority’s capabilities with another of a similar shape, size and with common risk factors and weighting can be hugely illuminating.

If you have plans, procedures and policies that you would be willing to share with other local authorities via the Fighting Fraud and Corruption Locally Good Practice Bank, please get in touch with us at counterfraudcentre@cipfa.org.