Fraud Policy

Kartoza Fraud Policy

  • There will be maximum deterrence of fraud.
  • Fraud which cannot be deterred will be prevented.
  • There will be prompt detection of fraud which cannot be prevented.
  • There will be professional investigation of detected fraud. (Cases involving funding from DSD will be referred to the funding Branch in the first instance.)
  • Effective sanctions will be taken against people committing fraud. 
  • Redress will be sought in respect of money defrauded. 

MODEL FRAUD RESPONSE PLAN

Purpose

The purpose of this plan is to provide guidance on the action to be taken when fraud is suspected or discovered.  It covers among other things, to whom the fraud will be reported, responsibilities for actions, who will investigate the incident and how employees under suspicion will be dealt with.  The use of the plan may enable the governing body within Kartoza (hereafter called the Organisation) to:

  • prevent further loss;
  • establish and secure evidence necessary for criminal and disciplinary action;
  • notify the relevant authority, funding body and/or Police;  
  • establish circumstances in which external specialists will be involved; 
  • minimise and recover losses;
  • punish the culprits;
  • review the reasons for the incident, the measures taken to prevent a recurrence, and any action needed to strengthen future responses to fraud; and
  • keep all personnel with a need to know suitably informed about the incident and the Organisation’s response.

Initiating Action

Detection

Suspicion of fraud or irregularity may be captured through a number of means, including the following:

  • supervision and checking outputs;
  • random spot checks by managers;
  • operation of proper management and control procedures; 
  • a complete and secure audit trail; and 
  • suspicions of fraud reported by staff (it is important that staff know that any reported fraud will be acted upon and that protection against victimisation or dismissal is provided to them).

Action to be taken

  1. All actual or suspected incidents of fraud will be reported without delay to the Fraud Liaison Officer or other nominated person responsible for managing the risk of fraud within the Organisation.  
  2. The Organisation will immediately take steps to identify if the actual or suspected fraud involves public or private funding or is restricted to the Organisation’s own funds.  
  3. Where the fraud may involve public funding the Organisation will immediately contact the relevant funding body for guidance on what action needs to be taken by the Organisation.  This may include advice on any preliminary enquiries which may be required and on who will conduct the investigation; for example in cases where the suspected fraud involves grant money disbursed by the Department for Social Development (DSD), then any investigation will be conducted by DSD Corporate Investigations Unit (CIU). 
  4. If the fraud involves the Organisation’s own private funding then the Police should be notified immediately.  In such instances the Police will be responsible for taking forward any investigation and providing advice in respect of any preliminary enquiry to be undertaken.  

Prevention of further loss

  1. Where initial enquiries provide reasonable grounds for suspecting a member or members of staff of fraud, the Organisation will decide how to prevent further loss. This may require the suspension, with or without pay of the suspect(s); it may be necessary to plan the timing of suspension to prevent the suspect(s) from destroying or removing evidence that may be needed to support disciplinary or criminal action.  Regard should be paid to guidance below in relation to disciplinary action.
  2. In these circumstances, the suspect(s) will be approached unannounced.  They will be supervised at all times before leaving the premises.  They will be allowed to collect personal property under supervision, but will not be able to remove any property belonging to the Organisation.  Any security passes and keys to premises, offices and furniture will be returned.
  3. The Organisation will consider the best means of denying access to its premises/property while the suspect(s) remain suspended (for example by changing locks and informing staff not to admit the individual(s) to any part of the premises). Similarly, access permissions to all computer systems will be withdrawn.

Establishing and securing evidence

Following an allegation or the report of a suspicion of fraud, information to determine whether fraud is a possibility will initially be obtained by the organisation: 

Discreet enquiries –

  • The Organisation must follow up any such suspicions or allegations; this may involve enquiries with for example members of the management committee, employees and volunteers.  These will be carried out in such a way as to ensure that innocent individuals are not harmed by false accusations; and in the event of a fraud having been committed to avoid alerting the perpetrators.

Review of documents/records–

  • Security of records - once a suspected fraud is reported, steps will be taken immediately to prevent the theft, alteration, or destruction of relevant records.  Such actions may include, but are not necessarily limited to, removing the records and placing them in a secure location, limiting access to the location(s) where the records currently exist, and preventing the individual(s) suspected of committing the fraud from having access to the records.  The records must be adequately secured until the relevant investigation unit or the Police obtain the records to begin an investigation.
  • The funding body or the Police may consider whether it is necessary to investigate systems other than that which has given rise to suspicion, to determine the extent of any fraudulent activity
  • At an early stage it may be useful to seek guidance from either the funding body or the Police, on how to proceed and to ensure that evidence requirements will be met during any fraud investigation.

Recovery of losses

Where the Organisation has suffered a loss, efforts will be made to recover that loss.  In some circumstances this may involve a civil action and it will probably be necessary to seek legal advice.  If the loss may be covered by insurance then the appointed brokers will be advised at the earliest opportunity. The funding body or the Police should be able to advise on options available.

Other Issues

Disciplinary action

The application of disciplinary procedures is solely a matter for the Organisation.  Advice shall however be obtained, either from the funding body or the Police, on whether or not such action could impede or interfere with a potential criminal investigation.  All disciplinary action will be conducted in line with relevant employment legislation and recognised codes of practice.

Review of Fraud Response Plan

The Fraud Response Plan will be reviewed annually or following an incident of fraud, to ensure that it reflects changes, which may be necessary to strengthen future responses to fraud.  Changes to the Fraud Response Plan will be the responsibility of the Organisation.

 

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