The below excerpts are from a guidance/best practice document titled Managing the Risk of Fraud, which can be found on the ALARM website. ALARM is the national forum for risk management in the public sector.
Camden council has a representative on the board of directors of ALARM and I find it worrying, but not surprising that ALARM appears to be yet another quango Camden council utilises to put on a show of compliance to the law in combating or 'taking measures to combat' fraud. Over 60,000 cases of possible fraud were identified by camden council last year and only a handful were investigated. Camden council does not have the capacity to investigate even 5% of fraud cases. Who cares anyway its only public money.
Given that Camden council and its work force can't actually manage to follow policies and procedures and show no genuine signs of being able to, I found it quite comical. How long does camden council imagine it can get away with using props to gloss over poor performance and management?
Even more comical is one of the ALARM board of directors, Camden Councils own head of internal audit and investigation Tracy Barnett, who I went to with evidence of fraud committed by a camden council funded voluntary group. I had obtained the accounts of this group and went over them and thought "hello, naughty council funded voluntary group you have been up to no good, I no i'll contact camdens internal auditor". Ms barnet is employed by the council to cover up most of the fraud that is carried out is my guess.
After conducting an 'investigation' (speaking with housing officers) Ms Barnett concluded that the accounts I had given her were 'in her view' not actually accounts (not accounts?).
I believe Ms Barnett deliberately ignored the evidence I gave her on advice from senior housing officers who have a vested interest in this association. Defining fraud is often a problem for camden council, but I have one definition (below) taken from Newham council's website.
"To have a clear understand of fraud a clear definition is needed.
Our Definition:
The deliberate changing of financial statements or other records by either a member of the public or someone who works for the council, done to hide theft or use of equipment, money or services for personal gain."
(LBNewham Council website)
And there was me thinking camden councils internal auditors were independent and not subject to undue influence.
MANAGING THE RISK OF FRAUD: THE ALARM STANDARD FOR RISK ADVISORS
THE NATIONAL FORUM FOR RISK MANAGEMENT
IN THE PUBLIC SECTOR
THE NATIONAL FORUM FOR RISK MANAGEMENT
IN THE PUBLIC SECTOR
WHY A STANDARD FOR MANAGING THE RISK OF FRAUD?
The recent National Fraud Review and the publication of the Fraud Act 2006 have served to focus attention on the major issues that have developed over recent years with regard to the occurrence of fraud against the public sector.
There is no doubt that instances of fraud in the public sector show an ever increasing trend, particularly in key financial/operational areas such as procurement, insurance, housing benefits and partnership areas. In addition, information and personal data held within an organisation is an area that is now at increasing risk of abuse, particularly in relation to identity fraud. The fraud review highlights the fact that financial levels of fraud against the public sector have significantly increased and provides examples of key areas where fraud has occurred.
It stresses that the accurate measurement of the financial impact of fraud is a future priority. An overriding responsibility of public sector organisations is the provision of effective and efficient services to clients and stakeholders in a manner that seeks to ensure the best possible protection of the public purse in its delivery arrangements.
The impact of fraud on a public sector organisation can have consequences that are serious and often far reaching. Fraud can directly affect the ability of the public sector to serve the most vulnerable in society. Financial and reputational loss are the obvious key risk areas but instances of fraud can also bring a range of other serious consequences including breakdown of trust, political fall-out, impact on morale and the risk of potential litigation.
It is essential that public sector organisations place the management of risk of fraud at the very top of their corporate governance arrangements. Compliance with the principles set out in this paper will ensure that organisations are adopting ‘best practice’ in their approach to this matter.
In addition, there are a number of other key guidance documents that have been produced in this field, including the recent publication from the CIPFA Better Governance Forum. A number of documents for reference are listed in Appendix 1.
Public sector organisations have responsibility for the provision and control of a wide range of diverse services and the methodology of managing the risk of fraud will need to be tailored to the specifics of an individual service.
Overarching these specific services, however, is the need for organisations to have in place sound corporate governance arrangements that span and direct all areas of the organisation’s business and operational activity.
In order to manage the risk of fraud at an acceptable level, there are five key essentials of corporate governance that should be in place. These are illustrated in Diagram 1, below. These should not be seen as the only key governance requirements and organisations will need to consider local circumstances that affect their overall governance arrangements.
Diagram 1:
1. Embedded strategic approach to risk management
2. Culture of zero tolerance
3. Sound counter-fraud and corruption Framework
4. Strong systems of internal control
5. Close working arrangements with partners in relation to counter-fraud work.
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In Camden councils case 'a deeply embedded culture of fraud and deception at a level acceptable to a few authoritarian executives or 'the nuts and bolts of how the council operates' but lets put on a show we are actually taking fraud seriously and hope nobody notices the deceit and all the theiving that goes on.
