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Anti-fraud and corruption strategy

Contents

1. Introduction

1.1. South Ribble Borough Council is committed to combating fraud and corruption and promoting a 'zero tolerance culture', whether the perpetrators are internal or external to the Council. All employees, (including casuals, temporary and agency staff), elected members, partners, contractors and suppliers of goods and services are expected to demonstrate integrity, accountability and high ethical standards. The Council has adopted an Equality and Diversity Policy to which all employees are required to adhere. The Council is very mindful of the increased importance of working with partners in all areas of its activities. In these circumstances the Council shall ensure that its partners and all companies with whom it is contracted, will be fully informed of the procedures it has in place to combat fraud.

1.2 The public is entitled to expect local government employees and elected members to adhere to their respective Codes of Conduct, to conduct themselves to the highest standards, with the utmost integrity and in a manner which avoids the possibility of any suspicion arising whereby they could be influenced by improper motives. Fraud and corruption should be thought of in terms of a reputational risk not solely a financial risk.

1.3. The Chartered Institute of Public Finance and Accountancy (CIPFA) provided guidance describing actions needed for organisations to be effective in countering fraud and corruption. In addition, the Council focuses on fraud risks identified in the Audit Commission's national report, Protecting the Public Purse.

1.4. South Ribble Borough Council endorses the principles of Public Life (derived from the work of the Nolan Committee) listed below.

Selflessness

Members should serve only the public interest and should never improperly confer an advantage or disadvantage on any person.

Honest and integrity

Members should not place themselves in situations where their honesty and integrity may be questioned, should not behave improperly and should on all occasions avoid the appearance of such behaviour.

Objectivity

Members should make decisions on merit, including when making appointments, awarding contracts, or recommending individuals for rewards or benefits.

Accountability

Members should be accountable to the public for their actions and the manner in which they carry out their responsibilities and should co-operate fully and honestly with any scrutiny appropriate to their particular office. OPENNESS Members should be as open as possible about their actions and those of their Authority and should be prepared to give reasons for those actions.

Personal judgement

Members may take account of the views of others, including their political groups, but should reach their own conclusions on the issues before them and act in accordance with those conclusions.

Respect for others

Members should promote equality by not discriminating unlawfully against any person and by treating people with respect, regardless of their race, age, religion, gender, sexual orientation or disability. They should respect the impartiality and integrity of the Authority's statutory officers and its other employees.

Duty to uphold the law

Members should uphold the law and on all occasions act in accordance with the trust that the public is entitled to place in them.

Stewardship

Members should do whatever they are able to do to ensure that their authorities use their resources prudently and in accordance with the law.

Leadership

Members should promote and support these principles by leadership and by example and should act in a way that secures or preserves public confidence.

1.5. This Strategy applies equally to all employees and elected members and aims:

  • to promote an anti-fraud culture throughout the Council;
  • to ensure that concerns are properly raised and addressed;
  • to deter serious malpractice;
  • to protect the Council's reputation;
  • to demonstrate accountability in line with the highest standards of governance; and
  • to reduce losses to fraud and corruption to an absolute minimum.
  • Recovering fraudulently claimed overpayments and other losses;
  • Prosecuting offenders or if appropriate, the administration of an official caution.

1.6. South Ribble Borough Council endeavours to prevent and detect fraud by working with / towards or having the following in place:

  • Effective Internal and External Audit;
  • An effective system of internal control to reduce the risk of fraud;
  • Detecting and stopping fraud;
  • Senior officers responsible for authorising Regulation of Investigatory Powers Act 2000 (RIPA) forms;
  • Local Code of Corporate Governance;
  • Annual Service Assurance Statements;
  • A Policy Statement and Strategy to embed Risk Management;
  • Raising awareness of fraud and corruption via the Risk Management Framework;
  • Audit Commission's National Fraud Initiatives (NFI) and other data matching exercises;
  • Membership of the National Anti - Fraud Network (NAFN);
  • Sharing of information and data between services and external organisations;
  • Housing Benefits Matching Service;
  • Liaison with the Police and other anti-fraud agencies;
  • Provision of trained investigators;
  • Specific initiatives relating to benefits, e.g. Verification Framework; Data Analysis Exercise, the Security against Fraud and Error (SAFE) initiative and the proactive exercises for the prevention of benefit fraud;
  • CIPFA Code of Practice for Treasury Management;
  • Recruitment and selection process;
  • Corporate and service Induction and awareness sessions (for employees and elected members);
  • Gifts and Hospitality Registers (for employees and elected members);
  • Performance Management Framework;
  • Project Management Guidance;
  • Disciplinary Procedure; 
  • Ethical governance audits;
  • Promotion of a zero -tolerance culture towards fraud and corruption;
  • Being visibly active against fraud, which acts as a significant deterrent;
  • Fraud awareness sessions for employees and elected members;
  • Recovering fraudulently claimed overpayments and other losses;
  • Referral of benefit fraud to CPS for prosecuting of offenders

1.7. This Strategy supplements a range of inter related policies and governance arrangements to provide a corporate framework to counter fraudulent activity, including:

  • The Council's Constitution which includes Standing Orders, Standing Orders for Contracts, Financial Regulations and Protocols;
  • Governance Committee;
  • Scrutiny Committee;
  • Standards Committee;
  • Annual Governance Review;
  • Local Code of Corporate Governance;
  • Codes of Conduct for Employees and Elected Members
  • Registers of Interest;
  • Scheme of Delegation;
  • Codes of Conduct relevant to individual professional bodies;
  • Whistleblowing Policy
  • Conditions of Service;
  • Complaints Procedure;
  • Combating Benefit Fraud document;
  • Corporate Prosecution Policy;
  • Fraud Response Plan;
  • Money Laundering Policy;
  • Information Technology and Communication Policies which include: Acceptable Use Policy; Email Policy; Internet Policy; Security Policy; Records Management Policy; Data Protection Policy; and the Freedom of Information Policy.
  • Procurement Strategy;
  • Equality and Diversity Policy.

1.8. This Strategy encompasses all fraud although there are separate policies dealing with the specific issues of money laundering and housing and council tax benefit fraud.

2. Roles and responsibilities

2.1 Section 151 Officer

The Section 151 Officer has a statutory duty under Section 151 of the Local Government Act 1972, to ensure that there are proper arrangements in place to administer the Council's financial affairs. Section 114 of the Local Government Finance Act 1988 requires the S151 Officer to report to the full Council, Cabinet and the External Auditor if the authority or one of its officers:

  • has made, or is about to make, a decision which involves incurring unlawful expenditure
  • has taken, or is about to take, an unlawful action which has resulted or would result in a loss or deficiency to the authority
  • is about to make an unlawful entry in the authority's accounts.

2.2 The role of the Monitoring Officer

The Director of Governance is the 'Monitoring Officer' in accordance with section 5 (1) of the Local Government and Housing Act 1989. It is the responsibility of the designated Monitoring Officer to maintain an up-to-date version of the Constitution and ensure that it is widely available for consultation by Members, officers and the public. The role also contributes to the corporate governance of the Council, in particular, through the provision of professional legal and ethical advice. The Monitoring Officer shall, under section 5 (2) of the Local Government and Housing Act 1989, make a report to the Cabinet and Council where it appears to him/her that the Cabinet or Council and/or officers appointed by them:

  • has made or is about to make a decision which contravenes any enactment, or rule of law
  • has made or is about to make a decision that would give rise to maladministration or injustice as is mentioned in Part III of the Local Government Act 1974.

2.3 Standing orders and financial regulations

The Council provides clear instructions and guidance to officers for undertaking the Council's functions and responsibilities, through its Standing Orders, Contract Procedure Rules and Financial Regulations.

2.4 Role of management

The primary responsibility for implementing and maintaining effective internal control and arrangements to prevent and detect fraud and corruption rests with management at all levels. To safeguard the resources and assets within their service, the effectiveness of controls should be monitored and suspicion of fraud and / or irregularity promptly reported. Management should ensure that their staff have access to and understand the Council's Contract Procedure Rules and Financial Regulations. All Directors, Assistant Directors and Service Leads are required, annually, to complete a Service Assurance Statement in relation to the effectiveness of the control environment, including the prevention of fraud and corruption, within their area of responsibility. These statements inform the Annual Governance Statement.

2.5 Role of employees

All employees (including casuals, temporary and agency staff) are expected to conduct themselves in a manner that is beyond reproach, above suspicion, open and accountable. They all have a responsibility to adhere to the Code of Conduct for Employees, legislation, formal policies and strategies and to instructions given to them by managers, whether written or verbal. In addition, they must abide by the Codes of Conduct of their respective professional bodies. They have an obligation to report any suspicion of fraud or irregularity. Although it could occur in any area, the following are some examples of where there is significant risk of fraud and corruption occurring:

  • Housing benefits;
  • Housing improvement grants;
  • Contracts / suppliers / partnerships / land sales;
  • Payroll;
  • Flexi time system;
  • Ordering and payment of goods and services (procurement);
  • Electronic procurement and payments;
  • Recruitment and selection. The risk of fraud and corruption is enhanced where employees, elected members, partners, contractors and suppliers are in a position of trust and responsibility, without effective monitoring or supervision.

2.6 The role of elected Members

Elected Members are each responsible for their own conduct and contributing towards the safeguarding of corporate standards. As elected representatives, all Members have a duty to protect the Council and public money from any acts of fraud, bribery and corruption. This is done through a framework which includes the Anti-Fraud and Corruption Strategy, compliance with the Members' Code of Conduct and compliance with the Council's Constitution. Conduct and ethical matters are specifically brought to the attention of Members during induction and include the declaration and registration of interests. The Monitoring Officer advises Members of new legislative or procedural requirements.

2.7 Conflicts of interest

Both Members and officers must ensure that they avoid situations where there is potential for a conflict of interest (e.g. when undertaking external tendering of services, internal tendering, planning and land issues). Effective role separation will ensure decisions made are seen to be based upon impartial advice and avoid questions about improper disclosure of confidential information. Declaration of interests should be recorded in accordance with the Code of Conduct and Constitution.

2.8 Internal audit

Internal Audit plays a vital preventative role in trying to ensure that systems and procedures are in place to prevent and deter fraud and corruption. Under the Accounts and Audit Regulations 2015 and its own professional standards, it has a duty to provide an independent and objective opinion on the Council's control environment. As part of this duty of care, Internal Audit will ordinarily investigate all cases of suspected financial irregularity, fraud or corruption (except for benefit fraud) in accordance with established procedures and relevant regulations. 7 Weaknesses identified as a result of a fraud investigation will be formally reported to the relevant Director / Assistant Director/Service Lead and management actions to strengthen controls will be recommended. Implementation will be monitored via Internal Audit's management action follow up process. Senior Management Team and the Governance Committee will also receive periodic reports of outstanding / non- implementation of management actions.

2.9 External audit

External Audit is an essential safeguard of the stewardship of public money. It is not the External Auditor's function to prevent fraud and irregularities, but the integrity of public funds is at all times a matter of general concern. External Auditors are always alert to the possibility of fraud and irregularity and will act without undue delay if grounds for suspicion come to their notice. The External Auditor has a responsibility to review the Council's arrangements for preventing and detecting fraud and irregularities, and arrangements designed to limit the opportunity for corruption.

2.10 Benefit fraud hotlines

Suspected Benefit Fraud can be reported confidentially on any of the following numbers: The Council's Gateway Service - 01772 625625(9am - 5pm) The National Fraud Hotline: 0800 854 440. Reports may also be made via the Council's website: www.southribble.gov.uk

2.11 Human Resources 

As part of the induction process, all new employees are required to sign to say that they have received, read and understood governance documents, including the Anti-Fraud and Corruption Strategy, "Combating Benefit Fraud" and the Whistleblowing Policy. Newly elected members are also made aware of and expected to sign up to governance e documents as part of their induction programme. All applicants who have been offered a post with South Ribble Borough Council are subject to rigorous pre employment screening including medical clearance, verification of qualifications and previous employment. In addition, criminal record checks are completed for appropriate posts.

3. Definitions

3.1 Irregularities that are criminal offences broadly fall into one of the categories below:-

Theft

The dishonest taking of property belonging to another with the intention of depriving the owner permanently of its possession.

Fraud - Fraud Act 2006

Fraud by false representation, failure to disclose information and abuse of position.

Benefit Fraud

Involves having a pecuniary interest in a benefit claim and knowing that the claim is based on incorrect information.

The Bribery Act

The Act creates two general offences:

  • Offering, promising or giving a bribe and
  • Requesting or receiving a bribe. In addition there are two specific offences:-
  • Bribery of a foreign public official and
  • Failure of commercial organisations to prevent bribery (as it is a corporate offence it is not applicable to local authorities) A bribe does not have to be a cash payment, just some advantage.

3.2 There are other irregularities or improper practices, which may tarnish the Council's reputation and / or attract criticism or embarrassment. These include:

  • Failure to observe, or breaches of, Standing Orders. Standing Orders in relation to Contracts (Contract Procedure Rules), Financial Regulations, Scheme of Delegation and the Codes of Conduct for Employees and Elected Members;
  • Failure to observe, or breaches of, legislation, e.g. Data Protection Act; Human Rights Act; Housing Benefits Regulations, Equality and Diversity and the Computer Misuse Act;
  • Failure to observe, or breaches of, the Council's / Service's Policies, Procedures or Practices, e.g., Information Management Policy, which in some circumstances can constitute an irregularity;
  • Failure by employees and elected Members to properly declare interests, which may materially affect the carrying out of their respective roles, as laid down in the relevant Code of Conduct.

A breach of any of the above may lead to the Council's disciplinary process being invoked.

4. Reporting Procedures

Fraud committed by Council employees

4.1 Irregularities

Financial Regulation 16 states that: (16.1) Any Chief Officer shall notify the Chief Financial Officer immediately of all financial or accounting irregularities or suspected irregularities or of any circumstances which may suggest the possibility of irregularities including those affecting assets, cash, stores, property, remuneration or allowances. (16.2) Any potential irregularities shall be dealt with in accordance with the Council's Antifraud & Corruption, Whistle Blowing and relevant Human Resources Policies.

4.2. In practice, employees should raise their concerns with the Monitoring Officer as outlined in the Council's Whistleblowing Policy.

4.3. The Monitoring officer should then bring the concern to the attention of the Chief Executive. If appropriate, the Leader of the Council should also be notified.

4.4. The Monitoring Officer will normally act as the delegated officer representing the Chief Executive. After consideration of the facts and initial evidence, the Monitoring Officer, in consultation with the Chief Executive will then decide what action and further consultation is necessary. It is imperative to avoid any action, which may compromise any subsequent internal or external investigation.

4.5. The following should be determined:

  • Whether there is any substance to the matter and therefore a need to continue the investigation;
  • Whether there is sufficient evidence to support disciplinary or legal proceedings;
  • Whether there is a need to suspend an employee alleged to have committed an offence.

4.6. Should the irregularity involve a benefit claim, then this should be reported to the Department of Works and Pensions. In these circumstances, if the irregularity involves an employee or an elected member, it should also be reported to the Monitoring Officer.

4.7. Any investigations carried out in relation to employees' irregularities are entirely separate from, and do not form part of, the Council's disciplinary procedures. Following the completion of an irregularity investigation and subsequent report, it is possible that the internal disciplinary procedure may be initiated.

4.8 The Council's Disciplinary Policy and Procedures state that fraud is classed as gross misconduct. It allows for an employee to be dismissed, following consultation with Human Resources, without recourse to the progressive disciplinary procedure.

Fraud committed by Elected Members

4.9. Behaviour of elected members, including compliance with the law, is governed by the Code of Conduct for Elected Members.

4.10 Should an employee suspect an elected member of an irregularity, he/she should report their concern to the Monitoring Officer.

Fraud committed by individuals external to the organisation including partners, contractors and suppliers 

4.11 The Council is committed to combating fraud and corruption from all sources, both internal and external to the organisation. Standards of behaviour and probity expected of companies and organisations employed by the Council and those in partnership with the Council, should be as high as those expected of Council employees and elected members.

4.12 All of the Council's written contracts should contain a clause that will enable the Council to cancel the contract on the grounds of impropriety, and recover any loss resulting from the cancellation.

Reporting suspicion of money laundering

4.13 All suspicions of money laundering should be reported, without delay, to the Money Laundering Reporting Officer (MLRO), the Chief Executive.

6. The Commitment

6.1 The Council acknowledges the effect that fraud and corruption can have on its reputation, public funds and staff morale. This document outlines the Council's stance on the prevention and detection of fraud and corruption and its aim to maintain and promote the highest standards of governance.

6.2 The prevention of fraud and corruption is the responsibility of all employees and elected members. We all need to be aware of the opportunities for fraud and corruption and be vigilant in ensuring that effective controls are in place and adhered to.

6.3 The Council has systems and procedures in place to assist it in the prevention of fraud and corruption. An overview of these arrangements is maintained through the roles of the Monitoring Officer, the Section 151 Officer, the Chief Executive, Internal Audit and External Audit.

6.4 The Council will liaise with other agencies and organisations to investigate any detected or suspected irregularities.

6.5 This document will be reviewed on an annual basis by the Monitoring Officer. Should substantial revisions to the Strategy be necessary, it will also be presented to the Governance Committee for approval. Following approval, the Strategy will be put on the Authority's website, Connect and Members' Connect.

6.6 Fraud awareness training for all elected members and employees, will be undertaken following substantial revisions to the Strategy. In addition, training will be included within the Member Induction Programme, following elections.

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