Post Indaba Stakeholder Engagement Anti-Fraud Awareness Audit and Risk Division 14 th September 2016

Outline  Definition of Fraud Risks  Role of Audit and Risk Function  The fraud triangle  Trends within NLC  NLC Fraud Prevention Policy and Strategy  NLC is there for you!

Definition of Fraud Risks Fraud risks are defined as : intentional act or omission designed to deceive others, resulting in the victim suffering a loss and or the perpetrator achieving a gain. The elements of fraud risks are: A representation about a material fact Which is false And made intentionally, knowingly, or recklessly Which is believed And acted upon by the victim To the victim’s damage

Role of Audit and Risk Function Amongst others: Identify enterprise risks which includes fraud risks by implementing sound fraud prevention procedures and processes in line with PFMA requirements and NLC requirements (Grant Agreements) and implementing, monitoring and reporting on internal controls that address those risks

Opportunity Pressure Rationalisation GREED When GREED overcomes fear, FRAUD prevails

Common Trends of Reported Cases The use of fraudulent Annual Financial Statements Unregistered Accountants and Auditors misleading the applicants Service providers that purport to be NLC agents – charging fees Submission of false information - on the application form, fraudulent quotations, fraudulent invoices, falsification of progress reports etc. Partnerships where the assisting and assisted organisation do not know each other Registering of assets on individual’s name and not the organisation’s name Paying full amount of service to be rendered to service provider before any service is rendered Directly or indirectly giving kick-backs to NLC staff by applicants/beneficiaries Misuse of funds and NLDTF funded assets

Policy statement and Strategy The NLC holds a ZERO TOLERANCE approach towards fraud and corruption hence the strategy to implement Preventative Controls and governance processes in ensuring that fraud risks are effectively monitored and reported on all incidents and reasonable suspicions thereof, are verified and investigated and where appropriate, legal recourse to the full extent of the law is taken against perpetrators and legal recourse amongst others include: Disciplinary Action, Institution of Criminal Proceedings, Recovery of Losses and or Civil Litigation All recourse and actions shall be taken within the constitutional context in which the NLC operates with due regard to the principles of developmental needs, fairness, and administrative justice

“Audit and Risk gives reasonable assurance regarding adequacy & effectiveness of internal controls, but we can give you ABSOLUTE ASSURANCE that if you are busy committing fraud & corruption you will be caught one day”

What to do ? PROCUREMENT INTEGRITY IT’S UP TO YOU If How is NLC helping you? Call

I THANK YOU