Counter fraud and anti-corruption policy

Introduction and scope

We have a zero tolerance stance to all forms of fraud, bribery, corruption and theft.  This includes within the authority and from external sources.  We recognise fraud can:

  • undermine the standards of public service that we are attempting to achieve
  • reduce the level of resources and services available for the residents of Lincolnshire
  • result in major consequences which reduce public confidence in us 

We are committed to the highest possible standards of:

  • openness
  • probity
  • honesty
  • integrity
  • accountability

We expect all staff, councillors and partners to apply these standards. The standards are included in our code of conduct.  They are supported by our values to be:

  • professional
  • respectful
  • resourceful
  • reflective

We will protect our resources from risks of fraud and corruption. We will seek to deter and prevent fraud, corruption and theft to ensure that all risks in these areas are reduced to the lowest level possible.  Where we suspect or detect fraud, corruption or theft we will thoroughly investigate and deal with any proven fraud in a consistent and balanced way.  We will apply appropriate sanctions against those committing fraud and will attempt to recover all losses.  

Definitions

Fraud

Fraud is a deliberate deception intended to provide a direct or indirect personal gain.  The term fraud can include:

  • criminal deception
  • forgery
  • blackmail
  • corruption
  • conspiracy
  • the covering up of material facts and collusion

  By using deception a fraudster can:

  • obtain an advantage
  • avoid an obligation
  • cause loss to another party

Bribery

Bribery means offering, promising, giving, demanding or accepting an unearned reward to influence an official to gain advantage.  This can include:

  • gifts
  • hospitality
  • fees
  • rewards
  • jobs
  • favours
  • preferential treatments

Bribery is a form of corruption.

Corruption

Corruption is the deliberate misuse of your position for direct or indirect personal gain.  Corruption includes offering, giving, requesting or accepting a bribe or reward, which influences your actions or the actions of someone else.

The Bribery Act 2010 makes it possible for senior officers to be convicted where they are deemed to have given their consent or tacit approval in giving or receiving a bribe.   It also created the corporate offence of 'Failing to prevent bribery on behalf of a commercial organisation' (corporate liability). The Act requires organisations to have 'adequate procedures in place to prevent bribery.'  This policy and our code of conduct and whistleblowing policy are designed to meet that requirement. 

Theft

Theft is where someone steals cash or other property.  A person is guilty of theft if he or she dishonestly takes property belonging to someone else and has no intention of returning it. 

Scope

This policy applies to:

  • all our employees and Councillors
  • staff and committee members of Council funded voluntary organisations
  • our partners
  • our suppliers, contractors and consultants
  • our residents

Aims and objectives

We aim to:

  • reduce fraud and corruption losses within the Council to an absolute minimum and maintain that level
  • protect our valuable resources by ensuring they are not lost through fraud or corruption but are used for improved services to Lincolnshire residents
  • promote our Counter Fraud culture which:
    • highlights our zero tolerance of fraud, corruption and theft
    • defines roles and responsibilities
    • actively engages everyone – the public, councillors, staff, managers and policy makers
  • provide a best practice counter fraud service 
  • proactively deter, prevent and detect fraud, corruption and theft
  • investigate suspected or detected fraud, corruption and theft 
  • enable us to apply appropriate sanctions and recover all losses
  • provide recommendations to inform policy, system and control improvements.  This will reduce our exposure to fraudulent activity
  • work with strategic partners to protect against harm that fraud can do in the community

Principles

We will not tolerate abuse of our services or resources. We have high expectations of propriety, integrity and accountability from all parties identified within this policy.

We will ensure that resources dedicated to our counter fraud activities are sufficient.  We will train those involved to deliver a professional counter fraud service to the highest standards.

Fraud, bribery, corruption and theft are crimes.  They will result in disciplinary, legal and, or criminal action against the individual(s) concerned.  We will ensure consistency, fairness and objectivity in all our investigation work. We will treat everyone equally.

We want everyone to report any genuine suspicions of fraudulent activity.  We will not tolerate malicious or vexatious allegations or those motivated by personal gain. If proven, we may take disciplinary or legal action.

We will work with our partners (for example the police, district councils and other investigative bodies) to strengthen and continuously improve our arrangements to counter fraud and corruption.

We will protect public funds. We will collaborate with strategic partners to protect against harm that fraud can do in the community.

Responsibilities

Our Constitution sets out how we operate and make decisions.  This includes a commitment to counter-fraud and anti-corruption. We identify specific roles and responsibilities in the Constitution and financial procedures: 

Chief executive

Ultimately accountable for the effectiveness of our arrangements for countering fraud and corruption. 

Monitoring officer

To advise Councillors and officers on ethical issues, standards and powers to ensure that we operate within the law and statutory codes of practice.

Executive director for resources (Section 151 officer)

To develop and maintain counter fraud policy and whistleblowing policy.  These will be endorsed and approved by the Audit Committee and published on our website.

To ensure we have an adequately resourced and effective counter fraud and internal audit service. 

Audit committee

To review the assessment of fraud risks and potential harm to us from fraud and corruption.

To monitor the effectiveness of our financial regulations, procurement policy and procedures and other strategies for counter fraud and anti-bribery, whistleblowing and anti-money laundering.

To promote high standards of conduct amongst staff and Councillors and have a nominated fraud champion.

Councillors

To support and promote the development of a strong counter fraud culture.

External audit

Subject to the concept of materiality, provide reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity.

Corporate audit and risk management (counter fraud and investigations team)

To report significant matters of fraud or financial irregularity to:

  • the Section 151 officer
  • head of paid service (chief executive)
  • the Executive 
  • the audit committee

To develop and implement the counter fraud policy. To promptly investigate cases of suspected fraud reported under this policy, via the whistleblowing arrangements or the national fraud initiative.  

To make recommendations to improve controls and reduce the risk of fraud in the future.

To maintaining whistleblowing reporting arrangements.

To ensure that where fraud is found proportionate action is taken for sanctions and redress.

Executive directors

To ensure that this policy is adhered to. To assess the risk of fraud, bribery, corruption and theft in their service areas. To reduce these risks by implementing strong internal controls.

To report all suspected fraud or financial irregularity in their service areas to the head of internal audit.

Other managers

To promote staff awareness. To refer all suspected fraud to the counter fraud investigations team. To apply the policy of zero tolerance. To ensure that they assess the risk of fraud, corruption and theft in their service areas. To reduce these risks by implementing strong internal controls.

Staff

To comply with our policies and procedures. To be aware of the possibility of fraud, bribery, corruption and theft.  To report any genuine concerns to management, the counter fraud investigation team or via the whistleblowing arrangements.

Public, partners, suppliers, contractors and consultants

To be aware of the possibility of fraud, bribery, corruption and theft against us. To report any genuine concerns or suspicions.

Our approach for countering fraud and corruption

We will fulfil our responsibility to reduce fraud and protect our resources by taking a strategic approach consistent with that outlined in the Local Government fraud strategy - fighting fraud and corruption locally.  This document provides a national strategy for the 2020s in response to economic crime and fraud. FFCL is endorsed by a range of organisations including Local Government Association, CIPFA Counter Fraud Centre, SOLACE and counter fraud experts from numerous English local authorities.  

The national strategy consists of five pillars of activity:

Govern

Maintain robust arrangements and executive support to ensure anti-fraud, bribery and corruption measures are embedded throughout the Council.

Acknowledge

  • assess and understand fraud risks
  • committing the right support and tackling fraud and corruption
  • demonstrating our robust anti-fraud response
  • communicate risks and response

Prevent

  • developing an effective anti-fraud culture
  • enhancing fraud controls and processes
  • making best use of information and technology
  • communicate our activity and successes

Pursue

  • investigation and prioritising fraud recovery sanctions, and punishment of offenders
  • collaborating with strategic partners
  • learning lessons and closing the gaps

Protect

  • recognising the harm that fraud can cause in the community
  • protecting the Council and its residents from fraud

We will produce a counter fraud and anti-corruption strategy.  This will set out how we intend to turn the five pillars of activity into priority areas for action to protect our resources from fraud. 

We will support our strategy with annual counter fraud plans providing more detail of planned action. These will be aligned to CIPFA code of practice on managing the risk of fraud and corruption. They will include provision for prevention and investigation.

Outcomes

Investigation activity itself does not represent the outcomes of our counter fraud work.  We recognise that by preventing fraud we will reduce losses. The delivery of our counter fraud work plan will improve overall outcomes and achieve the aims and objectives of this policy.   We will measure the effectiveness of our counter fraud arrangements by focusing on outcomes such as:

  • high levels of fraud awareness 
  • zero tolerance to fraud (number of referrals or disciplinary results)
  • reduced losses 
  • levels of recovery
  • levels of reporting 
  • delivery of the annual counter fraud work plan (ensuring best practice)
  • reducing the risk of fraud
  • successful prosecutions and other sanctions

Reporting, advice and support

If you genuinely believe that someone is committing a fraud or you suspect corrupt practices, these are your reporting options:

  • your line manager (or a more senior manager if you suspect your line manager is involved)
  • whistleblowing facility:

Telephone: 0800 0853716 (dedicated confidential free phone number)

Email: whistleblowing@lincolnshire.gov.uk

In writing:

Lincolnshire local authorities
PO Box 640
Lincoln
LN1 1WF

To avoid potentially contaminating evidence managers should not investigate referrals themselves.  Instead they should immediately report all suspicions of fraud, bribery, corruption or theft to the counter fraud and investigations team. Our fraud response plan provides more detail.

We will treat all concerns or suspicions with discretion and in confidence.  If you need advice or support, please contact the counter fraud and investigations team at: CounterFraud@lincolnshire.gov.uk 

Our fraud response plan sets out how to report concerns and how we will handle reports.

Fraud response plan

We have a zero tolerance to all forms of fraud, corruption and theft.  This means we will apply the toughest sanctions where fraud is proven – disciplinary and criminal.

This fraud response plan is part of the counter fraud policy. Our aim is to reduce fraud and loss to an absolute minimum and keep it there.

You should follow this response plan if you are:

  • a staff member
  • councillor
  • partner
  • contractor
  • Lincolnshire resident 

We all have a responsibility to:

  • report any suspicion of fraud 
  • to cooperate in any investigation, if necessary

If you work for us and fail to report your suspicions, you may be in breach of our counter fraud policy.  We may take action against you or your organisation.

Fraud is a crime.  It involves a deception which is deliberate and intended to provide a direct or indirect personal gain, for example: 

  • false expenses
  • exaggerated pay claims
  • altering accounting records
  • bogus invoices
  • forged cheques
  • fixing tender results
  • contract irregularities

Corruption is the deliberate misuse of your position for direct or indirect personal gain.  This can include offering, giving, requesting or accepting a bribe or reward which influences your actions or someone else’s.

Theft is where someone steals cash or other property belonging to someone else with no intention of returning it. 

This guidance only tells you what to do if you suspect fraud. For other concerns you should refer to the following policies:

Alternatively, you can report fraud suspicions using our whistleblowing policy. 

What to do if you suspect fraud

Immediately report your suspicions to:

Do:

  • record your suspicions – write down what you have found, seen and heard
  • keep any evidence you have in a safe place until you can pass it to CFIT unless you risk alerting the suspect
  • tell us who you are – we will want to talk to you as you may know more than you realise
  • keep calm

Do not:

  • delay - report the matter quickly
  • approach or accuse individuals directly. You may alert them and evidence may be destroyed
  • tell anybody else – you don’t know who may be involved
  • investigate yourself – you may spoil the evidence and prevent a criminal prosecution

Safeguards

Harassment, bullying or victimisation

If you have raised your concerns in good faith we will take action to prevent you from reprisal.

Confidentiality

If you feel it is necessary we will try to protect your identity. This will not be possible if the investigation leads to criminal action.

Anonymous referrals

We do not encourage these as it affects our ability to investigate. However we will always look into any case of suspected fraud. 

Malicious referrals

If we find that your referral is malicious or has been made for personal gain, we will take action against you under our disciplinary policy or relevant agreement if you work for one of our partners.

Investigation

All suspected fraud must be referred to CFIT.

CFIT will assess the initial information and decide how to proceed.  This will include a strategy meeting with the relevant manager.

Following best practice defined in the counter fraud and investigations manual, CFIT will investigate most cases of suspected fraud.  Management may investigate low level fraud involving an employee after consultation with CFIT.

Potential outcomes

Criminal prosecution

The head of corporate audit and risk management on advice from CFIT will authorise the referral to the police for investigation.

Disciplinary action

At the end of the investigation CFIT will produce an outcome report.  If this involves an employee and fraud is proven, the likely outcome will be dismissal.  If fraud is not proven there may still be matters which need to be considered under our disciplinary procedures.

Recovery through civil or criminal proceedings

We will seek to recover all losses subject to legal advice and where it is cost effective to do so.  We will recover any loss caused by an employee through salary, pension or insurance.

Weaknesses in the system of controls

We will produce an action plan to:

  • address any system or management weaknesses 
  • reduce the risk of fraud and error in the future