Stamp out fraud with the six Cs

14-11-2016

It’s International Fraud Awareness Week, and as part of the annual campaign to raise awareness of fraud and how to prevent it, the CIPFA Counter Fraud Centre is championing Fighting Fraud and Corruption Locally.

Launched in March, the 2016-2019 strategy and companion documents are recognised as definitive guides for council leaders, chief executives, finance directors and counter fraud professionals.

When researching the new strategy, six key themes emerged – culture, capacity, capability, competence, communication and collaboration.

Known as the 6Cs, we’ll be exploring each of them over the course of this week, starting with the one that sits across all elements of counter fraud and corruption activity: culture.

Piecing together the culture puzzle

Building, shaping and transforming organisational culture takes time, hard work and buy-in from leaders and every single employee. It’s not something that can be achieved through ‘ticking boxes’ or flipping a switch.

Below are the actions recommended in the Fighting Fraud and Corruption Locally companion document. By no means exhaustive, they provide a clear framework: 

  • Create a robust and consistent tone from the top.
  • Provide fraud awareness training for senior staff and elected members so that roles and responsibilities are clear.
  • Publicise whistleblowing arrangements for fraud and corruption and communicate clearly that referrals will be acted upon.
  • Ensure reports to elected members include the numbers of cases actioned and trends. ­
  • Publicise the policy of consistent and fair action, making it clear that something will happen to fraudsters. ­
  • Ensure members of the public have trust in the counter fraud team, using communications channels to encourage them to report cases and see they have value for money.
  • Promote the counter fraud team as a function with integrity and professionalism and a ‘go-to’ place for advice and support.
  • Ensure practitioners within the local authority work with the counter fraud team and view counter fraud activity positively.
  • Ensure there are clear policies (e.g. anti-bribery and corruption, declarations of interest) that are applied consistently across the authority.
  • Work internally to fraud-proof new policies and procedures.

In the words of Benjamin Franklin, “an ounce of prevention is worth a pound of cure” when it comes to tackling fraud and a healthy organisational culture plays a crucial role. It forms the bedrock upon which an effective framework to tackle fraud and corruption can be built.

Learning from Tower Hamlets

The case at Tower Hamlets where directly-elected mayor, Lutfur Rahman, diverted charity money for political support, illustrates what can occur when the right checks and balances aren’t in place.

A report into the allegations of fraud at Tower Hamlets revealed a ‘culture of cronyism’ with auditors noting that the council’s grant system lacked transparency and some groups received cash without applying for it.

Whilst the east London authority regrets flaws in its processes, a strong organisational culture, backed by a robust framework, would have made a real difference to all elements of counter-fraud and corruption activity namely; prevention, detection, deterrence, investigation, sanctions and redress.

Share your best practice

What steps has your authority taken to improve its anti-fraud culture?

Do you have examples of recent campaigns or tactics that you would be willing to share with other local authorities via the Fighting Fraud and Corruption Good Practice Bank?

If so, please get in touch with us at counterfraudcentre@cipfa.org.

Translating recommendations into action

Creating a culture in which beating fraud and corruption is the norm will fortify local authorities, and help them to mitigate risk when fraud does occur.

It will also help to bolster the public’s trust in the counter fraud team, so that the counter fraud team is viewed as a function with integrity and professionalism. 

For advice and information on how this can be achieved, please contact the CIPFA team on 020 7543 5600.