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A Fraud Policy Statement should apply to the directors and employees of an organisation and, equally important, should demonstrate the organisation's commitment to combating fraud and corruption wherever it is found.
Many businesses and public organisations use a fraud policy statement to communicate the organisation's attitude and approach to the threat of fraud. This is a means for communicating their responsibility for securing their assets and their commitment to maintaining the highest possible standards.
Such a statement may include some or all of the following areas:
- allocation of responsibilities for the overall management of fraud
- the formal procedures which staff should follow if a fraud is discovered
- any staff training necessary for the prevention and detection of fraud
- creation of an awareness amongst staff that response plans have been devised, to deal with and minimise the damage caused by any fraudulent attack.
Alongside such fraud policy statements staff should be given clear guidance on the acceptance of gifts and hospitality and should also be clear on how to handle conflicts of interests.
An organisation’s Fraud Awareness Policy should be a short, precise document that can be understood and acted on by the appropriate personnel within the organisation. In broad terms, and in addition to the points noted above, the plan may also cover the following:
- a general review of robustness of existing systems, procedures and controls in preventing fraud
- a means for regular testing of such controls
- the identification of assets (including corporate information and plans) most at risk
- an appraisal of the threat of fraud on those assets and how it might manifest itself
- the means of damage limitation and recovery of funds if fraud occurs
- an unequivocal statement that all fraud offenders will be prosecuted
- the steps to be taken in the event a fraud occurs and who is responsible for taking action including:
- assigning responsibility for an instant response to the occurrence
- recovering funds
- dealing with the media
- preserving evidence and reporting to the police
The plan, once communicated to all staff and fully implemented, should be subject to regular review at board level. All staff, including part-time and contract staff, should be aware of the organisation’s policy in respect of fraud and the need for vigilance to prevent fraud.
Clicking the Policy Example link on the left will provide you with an example of a Fraud Policy Statement, which may be adapted to suit the needs of a particular organisation.
See also the IPF's public sector Counter-Fraud Charter
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