FLINTSHIRE COUNTY COUNCIL
Corporate Anti-Fraud and Corruption Strategy
DRAFT - Version 2_- December 2019
(with Tracked Changes)
Flintshire County Council
Corporate Anti-Fraud And Corruption Strategy
Contents
1.
Policy Statement
22
2.
Introduction
22
3.
Definitions
23
4.
Adopting the Right Strategy
34
5.
Accurately Identifying the Risks
45
6.
Creating and Maintaining a Strong Structure
45
7.
Responsibilities
46
8.
Taking Actions to Tackle the Problem
38
9.
Defining Success
310
10.
Awareness and Training
310
11.
Conclusion
3H
Policy Owners
Internal Audit Manaqer
Date Implemented
April 2007
Date Last Reviewed
November 2014
Current Review:
Approved bv Audit Committee (Version 1.7)
February 2019
Approved bv Constitution and Democratic Services
June 2019
Committee (Version 1.8)
Approved bv Council (Version 2)
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Flintshire County Council
Corporate Anti-Fraud And Corruption Strategy
CORPORATE ANTI-FRAUD AND CORRUPTION STRATEGY
1. Policy Statement
• Flintshire County Council (the Council) has a zero tolerance approach to
fraud, bribery and corruption. This Policy outlines how the Council
delivers an effective approach to managing the risk of fraud and
corruption.
• The Council is committed to this policy and to maintaining high ethical
standards.
• The Council is committed to the prevention, deterrence, detection and
investigation of all forms of fraud or corruption within or against all its
activities.
• The Council will support prosecutions or apply other relevant sanctions to
those who commit acts of fraud or corruption.
• The Council encourages anyone who suspects fraud and corruption to
report it, and the Council will support anyone who does this.
2. Introduction
2.1 Flintshire County Council has a workforce of around 7,000 6,000 and
spends in excess of £ 400m 25Q a year. The Council commissions and
provides a wide range of services to individuals and households and
works with many other private, public and voluntary sector organisations.
2.2 The size and nature of the Council’s services means that there is an
ongoing risk of loss due to fraud and corruption from both internal and
external sources. The Council is continuously developing anti-fraud
initiatives and remains committed to:
• The prevention, detection, deterring, investigation and correcting all
forms of fraud and corruption, whether these are attempted from
within or external to the organisation.
• Minimising losses caused by fraud, corruption and breaches of
regulations.
• Embedding management of fraud risk throughout the organisation.
• Increasing awareness of counter-fraud responsibilities at all levels
within and outside the Council.
2.3 The Council’s commitment to the protection of public funds against fraud
and corruption is set out in this strategy and supporting policies.
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Corporate Anti-Fraud And Corruption Strategy
2.4 The strategy is structured to reflect the CIPFA code of practice on
Managing the Risk of Fraud and Corruption. The five key elements of the
code are to:
• Acknowledge the responsibility of the governing body for countering
fraud and corruption
• Identify the fraud and corruption risks
• Develop an appropriate counter fraud and corruption strategy
• Provide resources to implement the strategy
• Take action in response to fraud and corruption
2.5 The Strategy applies to:
• AII Qffic e rs and to -aft employees (including centrally employed
teachers) of Flintshire County Council (as defined by the Employment
Rights Act) and is commended to School Governing Bodies and other
associated employers as best practice.
• All Members of the Council
• _ Partner Organisations , including Aura and NEWydd
• Third Party individuals such as Partners, Consultancy, Suppliers,
Contractors , volunteers and employees of Council Suppliers and
Contractors who are employed to deliver goods / services to the
Council.
• General Public Counci l Supp l i e rs, Contractors and Consu l tants
»_ G e n e ra l Pub l ic
2.6 The Council requires all individuals and organisations., with whom it deals
in any capacity to behave toward the Council with integrity and without
intent or actions aoT involvino fraud or corruption. Members of the public
are encouraged to report any concerns which they may have.
2.7 The Strategy has the full support of Members and the Council’s Senior
Accountable Officers. It is approved by Audit Committee and The
Cabinet.
2.8 This policy should be read in conjunction with the Council’s
Whistleblowing Policy and the Fraud & Irregularity Response Plan.
Definitions
3.1 Fraud: P For the purpose of this policy refers to where an individual has
undertaken, or intends to undertake, actions in order to obtain gain for
him/herself or another, or cause loss to another, or expose another to risk
of loss. raud is wh e n trick e ry is us e d to gain a dishon e st advantag e which
is oft e n f i nanc i a l ov e r anoth e r p e rson or organisation.
3.2 The Fraud Act 2006 came into force on 15 th January 2007. It created a
single offence of fraud which can be committed in three separate ways:
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• Fraud by false representation;
• Fraud by failing to disclose information where there is a legal duty to
do so ; and
• Fraud by abuse of position.
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•— Poss e ssion of artic le s for us e in fraud
*— Making or supp l ying artic le s for us e in fraud
*— Obtaining s e rvic e s dishon e st l y
*— Participating in fraudu le nt busin e ss
3.3 Theft: “A person shall be guilty of theft if he /she dishonestly appropriates
property belonging to another with the intention of permanently depriving
the other of it” (Theft Act 1968).
3.4 Corruption: For the purpose of this policy corruption refers to an
individual who has given or obtained advantage through means which are
illegitimate, immoral, and/or inconsistent with their duty to the Authority or
the rights of others. Examples include accepting bribes or incentives
during procurement processes, seeking to influence others orthrouqh the
The Counci l has d e fin e d corruption as “Th e offeringjcf, giving, soliciting or
acceptance of an inducement or reward, to inf l u e nc e oth e rs.., --w.
3.5 Irregularity: Any administrative or financial mistrust that comes about
either by act or omission.
The Bribery Act 2010 cr e at e d creates criminal offences for any individual
who either offers or receives a financial or other advantage intending the
advantage to be rewarded by the improper performance of a function or
activity. The Act also cr e at e d creates an offence of directly or indirectly
offering, promising or giving a bribe to a foreign public official so as to
influence the actions of the for e ign pub l ic said official. Any individual found
guilty of any of these offences is liable to imprisonment for up to a
maximum period of 10 years.
— Cyber Cr i m e : this occurs wh e r e any crimina l act dea l ing with comput e rs,
n e tworks ov e r th e int e rn e t.
3.6 Comput e r Fraud: occurs wh e r e informat i on t e chno l ogy e qu i pm e nt has
b e en us e d to manipu l at e programm e s or data dishon e st l y (for e xamp le , by
a l t e ring, substituting or d e stroying r e cords or cr e at i ng spurious r e cords), or
wh e r e th e us e of an I T syst e m was a mat e r i a l factor i n th e p e rp e tration of
fraud. D e ta ile d with th e Comput e r Misus e Act 1990.
4. Adopting the Right Strategy
4.1 To reduce losses to fraud and corruption to an absolute minimum, a
strategic approach is implemented encompassing a clear remit covering
all areas of fraud and corruption affecting the orqanisation Council .
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4.2 The approach adopted by the organisation Council involves a three stage
process:
1) Deter by having a culture within the organisation Council which
deters the committing of fraud.
2) Prevent by having measures in place to help prevent fraud
occurring.
3) Detect by having measures in place to detect fraud should it
occur.
The approach is covered in more detail in section 8 of this document.
4.3 The full range of actions actions for each stage of the process int e grat e d
actions should be taken forward with the focus on outcomes (i.e. reduced
losses) rather than activity (i.e. number of investigations).
5. Accurately Identifying the Risk of Fraud and Corruption
5.1 Fraud and corruption risks are considered as part of the Council’s
strategic risk management arrangements.
5.2 The nature and scale of losses to fraud and corruption are identified
where they can be practically established. By measuring the scale of
losses, and learning from where they are detected, knowledge is gained
of where controls within systems should be strengthened or introduced to
reduce the risk of fraud and corruption in the future.
6. Creating and Maintaining a Strong Structure
6.1 The Council is committed to the Nolan Principles of Sstandards in
Ppublic Ltife, namely objectivity, openness, leadership, accountability,
honesty, selflessness and integrity. High ethical standards should be
adhered to and be demonstrated in all the Council’s actions and
decisions.
6.2 The Council’s commitment to the highest standard of governance is
supported by a strong framework including the Constitution, Code of
Corporate Governance, Member and Officer’s Codes of Conduct and
specific counter fraud policies e.g. Whistleblowing Policy T and the Anti-
Money Laundering Policy. The Annual Governance Statement includes
reference to the measures taken to counter fraud and corruption.
6.3 The Council expects elected members and all offic e rs employees to lead
by example in demonstrating support for anti-fraud and corruption
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measures by adhering to rules and regulations, and that all practices and
operating procedures are beyond reproach.
6.4 Within the County Council those charged with countering fraud and
corruption have the appropriate authority to pursue their remit effectively.
In order for the Council to effectively deal with allegations of fraud those
charged with investigating matters must receive full support from all
offic e rs employees and members.
6.5 It is the responsibility of Service Teams and Senior Accountable Officers
manag e m e nt’s r e sponsibi l ity to establish sound systems of internal
controls in order to prevent and detect fraud, and d e s i gn e d to reduce the
risk posed by fraud within service areas. The Authority has a zero
tolerance to acts of fraud and corruption.
6.6 The Accounts and Audit (Wales) Regulations require every local authority
to maintain adequate and effective Internal Audit Service .
6.7 One of the roles of Internal Audit is to promote anti-fraud and corruption T
best practice and to ensure management has effective systems in place
to detect and prevent corrupt practices. The Internal Audit team are
properly trained to gain the appropriate knowledge and skills in respect of
fraud awareness, prevention, detection and investigation. In Flintshire a
clear mandate has been provided to Internal Audit to investigate potential
fraud and irregularities and this is specified in the Audit Charter and the
Financial Procedure Rules (4.3).
6.8 Where appropriate, tThe Council will co-operate with other local
authorities and public sector bodies in the prevention, detection and
investigation of fraud and corruption e.g. participation in the National
Fraud Initiative and liaison with the Police.
Responsibilities
Individual / Group
Role / Responsibility
Chief Executive
Ultimately accountable for the effectiveness of the Council’s
arrangements for countering fraud and corruption.
Chief Officer
Governance
(Monitoring Officer)
• Advise members and officers employees on ethical
issues, standards and powers to ensure that the Council
operates within the law and statutory Codes of Practice.
• Prepare a report to Council where it appears that the
authority has or is about to do anything which would be
in contravention of the law or which would constitute
maladministration.
Corporate Finance
Manager (Section 151
Officer)
• Ensure proper arrangements are made for the Council’s
financial affairs.
• Maintain an adequately resourced internal audit team.
Chief Officer Team
Overseeing the corporate approach to counter-fraud activity,
setting the tone to embed a culture of high standards and
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integrity.
Senior Accountable
Officers
• Notify Internal Audit of all suspected fraud or
corruption incidents in their area - see Fraud and
Irregularity Response Plan, para 6§.
• Ensuring that adequate systems of internal control exist
within their areas of responsibility, and that such
controls, checks and supervision operate in such a way
as to prevent or detect fraudulent activity.
• Regularly need to assess the types of risks and scope
for potential fraud associated with the operations in their
area.
• Ensure that officers employees receive fraud awareness
training. The extent of this will depend on the work that
individual officers carry out.
• Remind officers employees who are an integral part of
the control framework of fraud and risk issues.
• Ensure this Strategy and the Fraud Response Plan are
available to all officersemplovees.
Workforce
• A duty to act if they believe there is a possibility of
fraud or corruption taking place or the rules are
being breached - see Fraud and Irregularity
Response Plan para 3.
• Their own conduct and for contributing towards the
safeguarding of corporate standards (including
declaration of interest, private working, whistleblowing,
etc.).
• Acting with propriety in the use of official resources and
in the handling and use of corporate funds.
• Be alert to any financial transactions that may suggest
money laundering.
Internal Audit
• Providing a pro-active corporate anti-fraud function to
facilitate the identification and subsequent investigation
of alleged acts of fraud or corruption.
• Completion of any and all investigations of fraud and
corruption that do not fall within the remit of other
investigative bodies, such as Housing Benefit.
• Receiving and reviewing notifications of all frauds
reported within the Council and analysing fraud risk.
• Making appropriate arrangements to co-ordinate the
Council’s work on the National Fraud Initiative.
• Undertake internal data matching across Council
systems.
• Reporting to and liaising with the local police on
individual cases.
• Provide reports to the Audit Committee on incidents of
fraud and corruption.
• Issuing guidance to members and management in
relation to fraud and corruption related legislation and
procedures.
• Provide advice and guidance on internal controls to
prevent or detect fraud or corruption.
• Promoting fraud awareness and training.
• Acting as the Council’s consultant on issues of fraud and
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corruption.
External Audit
Considering if the Council has adequate arrangements in
place to prevent and detect fraud and corruption.
Trade Unions
• Notifvina Officers the appropriate individuals if thev
believe there is a possibility of fraud or corruption
taking place or the rules are being breached, see
Fraud and Irregularity Response Plan para 4.
• Support their members throughout the process.
Members
• Notifvina the appropriate individuals Officers if thev
believe there is a possibility of fraud or corruption
taking place or the rules are being breached, see
Fraud and Irregularity Response Plan para 5.
• Responsible for their own conduct.
• Contributing towards the safeguarding of corporate
standards, as detailed in the Members Code of Conduct.
Audit Committee
• Reviewing and monitoring policies for preventing and
detecting fraud.
• Reviewing reports relating to fraud from internal and
external auditors.
Third Partv
Individuals - Partners,
Suppliers, volunteers.
Contractors (and
employees of),
Consultants and the
Public
To be aware of the possibility of fraud and corruption within
their organisation or against the Council and report any
genuine concerns / suspicions.
8. Taking Action to Tackle the Problem
Deterrence
8.1 The Council will publicise its counter fraud measures using all available
means e.g. the press, newsletters, the Infonet and internet.
8.2 Publicised information makes offic e rs the workforces aware that fraud
and corruption are serious offences and that they may face disciplinary
action if there is evidence that they have been involved in these activities.
8.3 The Authority has a suite of policies and procedures in place to manage
the risk of fraud and corruption which are^:
• Corporate Anti-Fraud and Corruption Strategy
• Fraud and Irregularity Response Plan
• Whistleblowing Policy
• Ant i- Brib e ry Po li cy
• Anti-Money Laundering Policy
8.4 Where fraud and corruption is proved, and the Council has suffered a
financial loss, the Council will seek to recover the full value of any loss.
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In some cases., this may involve civil proceedings being instigated
through the courts. As a deterrent to others the Council will seek to
publicise such cases.
Prevention
8.5 Managers at all levels within the County Council have a responsibility for
the prevention of fraud and corruption (within their own remit) and for
implementing appropriate strategies to minimise the risk effectively. Such
strategies include promoting fraud awareness, assessing compliance with
Council policies (e.g. Financial Regulations) and ensuring sufficient levels
of internal control are maintained within systems and procedures.
8.6 The internal audit plan includes time for audit involvement in the
development of new systems. Involvement at this stage should help to
ensure that controls are designed into the systems to help prevent the
risk of fraud and corruption. The risk based annual plan also reviews the
internal control framework of the Authority , this is risk bas e d and includes
reviews of all high risk areas of operation- where the potential for fraud is
included as part of the review.
Detection
8.7 Managers play a key role in ensuring that systems and processes are in
place to detect fraudulent activity.
8.8 In many cases, the diligence of offic e rs individuals and the alertness and
good citizenship of the public at large detect acts of fraud or corruption.
Fraud and corruption may also be discovered by Internal Audit during
routine audits, pro-active fraud audits or through the use of data
matching. Frauds are also detected as a result of the Council’s
participation in the National Fraud Initiative exercise.
8.9 Offic e rs Employees , elected members and external stakeholders
(including third party individuals) are expected to report suspected fraud
or corruption in accordance with Council’s Financial Regulations and the
Counci l ’s Whistleblowing proc e dur e s policy .
Investigation
8.10 Reporting suspected cases of fraud and corruption by the above means
will ensure that all reported incidents are considered by Internal Audit in
accordance with the Fraud and Irregularity Response Plan. All referrals
are logged and assessed with timescales being agreed for completion of
the investigation taking into account any future loss of evidence or funds.
8.11 Not all referrals are fraud related and the investigation may be
undertaken by departmental management or appointed investigating
officers for cases of misconduct.
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8.12 During the investigation the Investigating Officer will contact any other
relevant parties e.g. the Monitoring Officer, People and Resources or the
Police, to ensure all allegations and evidence are properly investigated
and reported upon. When referrals are passed to the Police, the Crown
Prosecution Service will determine whether a prosecution will be pursued.
8.13 Internal Audit investigation reports identify the specific control
weaknesses which were present at the time of the fraud and allowed it to
be committed. Actions required to address these weaknesses and
strengthen the control environment are included within investigation
reports. Actions are graded depending upon their severity and the
manager responsible must complete an action plan detailing dates for
implementation and officer responsible.
8.14 Where necessary, the Council’s Disciplinary policy will be used to
facilitate a thorough investigation of any allegations of improper behaviour
by offic e rs employees . The decision to invoke the Disciplinary policy will
be a consideration of Chief Officers and P e op le and R e sourc e s Senior
Manager, Human Resources & Organisational Development .
8.15 To prevent misuse of the investigation process, someone who maliciously
raises a matter they know is untrue may be subject to disciplinary
action fwh e r e app li cab le} .
Sanctions and Redress
8.16 Where fraud or corruption has been identified the Council will recover any
losses (where applicable) and prosecute or apply other sanctions as
detailed within the Fraud Response Plan. Sanctions will be applied in a
comprehensive, consistent and proportionate manner. Examples of the
type of sanctions that could be considered are^ disciplinary action
(against offic e rs employees) and/or civil and criminal action.
8.17 Redress will be applied in accordance with the Investigation Outcome
(Recovery and Sanctions) R e cov e ry of Loss e s section detailed in Fraud
and Irregularity Response Plan. Rates of recovery will be monitored as
part of the quality process.
9. Defining Success
9.1 An nually annua l r e port wi ll b e pr e s e nt e d to the Audit Committee will be
informed on the performance against this strategy, this forms part of the
Internal Audit annual report.
10. Awareness and Training
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10.1 Training and guidance are vital to maintaining the effectiveness of the
Anti-Ffraud and Corruption Strategy. The Council supports induction and
work related training and will ensure that fraud awareness training is
provided to all Members , Senior Accountable Officers and the workforce
and S e nior Manag e rs of the Council.
10.2 Offic e rs The within Internal Audit team will receive specific training to
ensure compliance with professional standards and relevant legislation.
10.3 In order to raise awareness of this strategy,, and fraud and corruption in
general, the Council will arrange periodic publicity campaigns and will
issue advice encouraging fraud awareness.
Conclusion
11.1 Flintshire County Council has in place a clear framework of systems and
procedures to deter, prevent, detect and investigate fraud and corruption.
11.2 The Council will monitor performance of the Anti Fraud and Corruption
Strategy through regular reports submitted to the Audit Committee. The
Audit Manager will, in addition, keep this policy under review in order to
take account of any changes in Council policy and government
legislation.
11.3 Related policies such as Whistleblowing Policy and the Fraud Response
Plan can be found on the Council’s Website and the Infonet.
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