Selected Agencies cont… Fraud Control Strategies Overview – The ANAO (page 27) describes the following four key fraud control strategies which, if designed appropriately, implemented and effective, should significantly mitigate the risk of fraud: those strategies designed to prevent fraud from occurring in the first Fraud prevention – instance. Fraud detection strategies designed to discover fraud as soon as possible after it has – occurred. Fraud response systems and processes that assist an Agency to respond appropriately to – an alleged fraud when it is detected. Fraud monitoring, reporting and evaluation strategies to provide assurance that – legislative responsibilities are being met, as well as promoting accountability by providing information that demonstrates compliance with specific fraud control strategies. Each of these elements must be actively managed and have clear responsibility allocated within the agency to be effective at all. These are discussed as separate sections in this report. Internal not the only area of concern As commented earlier, Agencies should consider that internal fraud committed by employees is not the only fraud that can be perpetrated against the Agency. A lot of time is spent focused on fraud that may be committed against an agency by its employees, however, just as much effort should be placed on fraud that may be perpetrated to an agency by an external party. Consideration should be given to managing the fraud risks perpetrated from three sources: Internally perpetrated fraud fraud perpetrated by employees including – management/executive; Externally perpetrated fraud fraud perpetrated by parties outside the agency such as – suppliers, service providers, contractors and benefit recipients; and Collusion between employees and parties external to the agency. – Some common types of fraud perpetrated from these sources are provided in Table 2. This is not an exhaustive list.
Selected Agencies cont… Fraud Control Strategies – Overview The ANAO (page 27) describes the following four key fraud control strategies which, if designed appropriately, implemented and effective, should significantly mitigate the risk of fraud: Fraud prevention – those strategies designed to prevent fraud from occurring in the first instance. Fraud detection – strategies designed to discover fraud as soon as possible after it has occurred. Fraud response – systems and processes that assist an Agency to respond appropriately to an alleged fraud when it is detected. Fraud monitoring, reporting and evaluation – strategies to provide assurance that legislative responsibilities are being met, as well as promoting accountability by providing information that demonstrates compliance with specific fraud control strategies. Each of these elements must be actively managed and have clear responsibility allocated within the agency to be effective at all. These are discussed as separate sections in this report. Internal not the only area of concern As commented earlier, Agencies should consider that internal fraud committed by employees is not the only fraud that can be perpetrated against the Agency. A lot of time is spent focused on fraud that may be committed against an agency by its employees, however, just as much effort should be placed on fraud that may be perpetrated to an agency by an external party. Consideration should be given to managing the fraud risks perpetrated from three sources: Internally perpetrated fraud – fraud perpetrated by employees including management/executive; Externally perpetrated fraud – fraud perpetrated by parties outside the agency such as suppliers, service providers, contractors and benefit recipients; and Collusion – between employees and parties external to the agency. Some common types of fraud perpetrated from these sources are provided in Table 2. This is not an exhaustive list.
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