THE FUTURE FOR FRAUD MAKING ANTI-FRAUD ACTIVITIES WORK March 2015, CIPFA North West Phil Sapey, Senior Fraud Manager, Mazars

Contents 2 Evolution The evolution of anti-fraud activities - how we got here (wherever that is) Success What will it look like? Horizon Scanning Definitions, scale and case studies

The Evolution of Anti-Fraud 3 Evolution Un-evolution Super evolution Compliance evolution

HOW HAS YOUR FRAUD TEAM EVOLVED?

Evolution of Anti-Fraud There is no Fraud in Local Government  Incentives… We should look at Benefit fraud  There is a lot of benefit fraud…  Could there be fraud anywhere else? We need a corporate anti-fraud capacity  Housing fraud  Exemptions and discounts  Disabled parking 5

The Un-Evolution Option 6 Benefits fraud is being investigated by the DWP We don’t have any other fraud or fraud risk

Super Evolution of Anti-Fraud We need a corporate anti-fraud capacity  Addressing organisational culture  How do we stop people committing or attempting fraud  Pro-active anti fraud work  Reactive anti fraud work 7

Compliance Evolution of Anti-Fraud We need a corporate anti-fraud capacity  Because people will notice if we don’t - transparency agenda  Failure to prevent bribery legislation?  Failure to prevent financial crime legislation? 8

What should we be looking out for? Horizon Scanning 9 SFIS Transparency CIPFA - Code on Fraud and Corruption Emerging risks

SFIS 10 CommsReferrals Investigations Future?

Transparency 11 EffectiveExplanation Risky?

Transparency Local Authorities must publish the following information about their counter fraud work: Number of occasions they use powers under POSHF or similar Number of employees (absolute and fte) undertaking investigations and prosecutions of fraud Total number of professionally accredited counter fraud specialists Total amount spent by the authority on the investigation and prosecution of fraud, and Total number of fraud cases investigated 12

CIPFA - Code on Fraud and Corruption AcknowledgeIdentify StrategyResourcesAction 13

Emerging risks??? 14 Bank Mandate fraud Procurement fraud Accounts payable Sale of assets Housing Depots, DLOs, and satellites

Bank mandate fraud Procurement fraud Accounts payable Sale of assets Housing Depots, DLOs and satellites Emerging Risks??? 15

Don’t Forget the Risks that have Always Been There 16

An Education in Fraud in Schools 17 Why Schools? Satellite Governance Internal Audit nose Delivery model risk Academies Autonomy Accountability What to do? Schools fraud healthcheck

What Does Success Look Like? 18

Success - Policies/Strategy 19 Prevent Detect Deter Sanction Redress Acknowledge Prevent Pursue Acknowledge Identify Strategy Resources Action

Success – plan & report 20 Whistleblowing/ reporting Member approval - ongoing Awareness/ Training Plan of work With agreed outcomes Internal Audit Identifying Risk Innovative exercises Understanding fraud and fraud risks Receiving regular updates on investigations; Reviewing the organisation’s top risks including fraud risk; Approving a pro-active anti-fraud plan of work Communicating culture Chair of Audit Committee or other Counter Fraud Champion writing introductions to Counter fraud communications and training sessions Encouraging honesty and openness Support for the reporting of concerns and receiving updates on the number and type of whistleblowing referrals received

Questions? 21