Protecting Ourselves from Fraud
Fraud impedes the University's ability to perform and to meet its objectives. It wastes scarce funds and resources, affects the University's reputation and the reputation of all those working within the organisation.
This document seeks to raise awareness of potential fraud risk exposure and outlines the University's expectations of staff, students and others with which we interact.
What is Fraud?
Fraud is generally regarded as a subset of corruption. The difference is primarily that fraud involves personal gain. For instance, taking a bribe in return for favouring a tender submission could be regarded as fraud. If no bribe was involved, that is, if favouritism was given to a tenderer and no personal gain was involved, then this would be regarded as corrupt. The benefits involved in a fraud may be financial or non-financial in nature.
The University is exposed to frauds perpetrated by persons both internal and external to SCU. The possibilities of fraud and corruption are numerous. The following are just some examples:
- using taxi vouchers for private purposes;
- personal use of university assets, including taking building or other materials or equipment from the area in which you work;
- manipulation of records;
- receiving personal benefits in exchange for assisting a consultant to gain work at the University;
- claiming for travel entitlement to attend a course, not attending the course and not reimbursing travel monies;
- falsification of research results;
- manipulating a tendering process to achieve a desired outcome;
- misuse of a University credit card;
- manipulating the selection process for a staff appointment;
- theft of intellectual property;
- allowing a conflict of interest to undermine your independence;
- writing off recoverable assets or debts;
- making cheques out to false persons;
- theft or leakage of exam papers;
- using counterfeit signatures;
- using imaging and desktop publishing to produce apparent original invoices;
- mis-using or disclosing private information.
The University's Attitude to Fraud
Southern Cross University is committed to ensuring its policies, procedures and practices are consistent with best practice and the highest standards of ethical conduct.
Staff of the University are expected to act ethically, fairly and honestly in the performance of their duties. Conduct that compromises public trust and confidence in the integrity and the professionalism of the University and its officers and employees is unacceptable and could lead to termination of employment, other disciplinary procedures, loss of reputation and career progression, investigation for corruption and/or matters being referred for criminal investigation.
The University has an obligation to the community to ensure that its operations are free from fraud and corruption. In doing so, we will endeavour to protect those who assist SCU by providing information concerning suspected frauds. Wherever possible, confidentiality will be maintained and the NSW Protected Disclosures Act 1994 [corrigan.austlii.edu.au/au/legis/nsw/consol_act/pida1994313/], supported by the University's Internal Reporting Policy, makes it an offense for anyone to take detrimental action against you in reprisal for you making a protected disclosure.
On the other hand, any investigation commenced following the reporting of a suspected fraud will be undertaken on the assumption of innocence of the implicated individual(s).
The University also has an obligation to report all matters of suspected fraudulent and corrupt conduct to the relevant regulatory authorities.
Responsibilities for Fraud Control
The responsibility for fraud and corruption prevention rests with all University staff-members and primarily with senior management of the University.The University shall act to ensure that its operations are free from fraud and corruption; provide a framework that facilitates the identification of fraud and corruption risks and encourages timely and effective responses to those risks; ensure an environment exists that promotes prevention of possible fraudulent and corrupt conduct and detection and disclosure of suspected fraudulent and corrupt conduct; take prompt and appropriate disciplinary action against any staff-member who is found guilty of fraudulent or corrupt conduct, and report regularly to the NSW Independent Commission Against Corruption (ICAC) on matters of suspected corruption. [www.icac.nsw.gov.au]
All staff-members of the University shall ensure that their conduct meets the highest probity standards. All employees have a duty to report incidents or suspected incidents of fraudulent or corrupt conduct as soon as possible after becoming aware of them.
Every staff member should contribute to the development of better systems and procedures that will improve the University's resistance to fraud and corruption based on a risk management philosophy and methodology. Staff are responsible for implementing controls and regularly monitoring and reviewing the risks and the effectiveness of controls in reducing the University's fraud and corruption exposure to an acceptable level.
Discovery of fraud
Knowing the warning signs helps an organisation identify fraud in its early stages and therefore minimise loss.
Recent KPMG Fraud Surveys [www.kpmg.com] indicate the following early warning signs, among others, are relevant in relation to fraud: a large number of refunds being made; bank statement anomalies; documentation being altered; employee won't take holidays &/or won't let anyone help; evidence of habitual gambling; favour/preference being given to a particular supplier; large unexplained budget variance; manager's behaviour inappropriate; supplier invoice lacks detail; unusual level of activity on an account.
What allows frauds to occur?
Major factors allowing fraud to occur are the overriding of internal controls or poor internal controls in general. Effective internal control is crucial to preventing fraud.
Respondents to the above-mentioned surveys indicated other factors allowing frauds to occur include: collusion between employees and third parties; lack of accountability; individual control of inventory; poor physical security; poor ethical culture, and poor hiring practices.
What should you do about suspected fraud?
Staff should advise their supervisor of any concern, suspicion, or information of any substance of fraudulent, corrupt or improper conduct and encourage others to do the same. Supervisors should deal with all reports of suspected fraud or improper conduct in a professional and prompt manner.
Making your disclosure in accordance with the University's Internal Reporting Policy means the University must act to remedy the situation. It is preferable that any report be supported in writing (not email) wherever possible.
The NSW Protected Disclosures Act 1994 [corrigan.austlii.edu.au/au/legis/nsw/consol_act/pida1994313/] encourages all those involved to focus on the issues (not the people) and, in the spirit of the Act, the University must make all reasonable efforts to protect you from reprisals.
Under the Act, persons making protected disclosures can be given protection against any reprisals or detrimental action in relation to the making of the protected disclosure. Detrimental action includes injury, damage or loss, intimidation or harassment, discrimination, disadvantage or adverse treatment in relation to employment, dismissal from or prejudice in employment or disciplinary proceedings.A person who is found to have taken detrimental action against another person for having made a protected disclosure, risks a substantial fine or 12 months imprisonment or both.
What happens once I report my concerns?
It is important that you do not alert the person or persons suspected of fraud or attempt to conduct your own investigation or interview suspects as this could compromise the success of possible future criminal prosecutions or civil proceedings. It could also prevent you and the subject of the suspicion/allegation from receiving appropriate protection from public disclosure of an allegation.
It is important, too, that confidentiality be maintained with respect to any information disclosed and the identification of you and the person about whom the allegation is made. Don't tell others that you have made a disclosure.
The University will decide the manner of and person who will make any investigation into the information disclosed and whether a report needs to be made immediately to any outside organisation eg. the ICAC or the Police.
The University must tell you within six months what action has been taken or is proposed to be taken. If you are not happy with the response you can complain to the NSW Ombudsman or the ICAC.
Updated: 25 February 2013