Fraud - PowerPoint PPT Presentation

Loading...

PPT – Fraud PowerPoint presentation | free to download - id: 128f47-OGQ2Y



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Fraud

Description:

Efficient, Effective and Ethical Resource Management. Opportunity and ... Political embarrassment for the Government; and. Poor Morale. REDUCING FRAUD, WASTE ... – PowerPoint PPT presentation

Number of Views:101
Avg rating:3.0/5.0
Slides: 47
Provided by: benjami121
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Fraud


1
FRAUD ETHICS in Army Resource Management
Presenters Name Presenters Position
2
Fraud
Waste and Abuse of Resources
Good Governance - Efficient, Effective and
Ethical Resource Management
Opportunity and Mismanagement
Checks and Balances
Risk Averse Environment
3
FRAUD
Waste and Abuse of Resources
Good Governance - Efficient, Effective and
Ethical Resource Management
Opportunity and Mismanagement
Checks and Balances
Risk Averse Environment
4
FRAUD
Dishonestly obtaining a benefit by deception or
other means
- Commonwealth Fraud Control Guidelines 2002
5
BASIC TEST FOR FRAUD
  • Does the action appear to be unlawful?
  • If so, are the following three elements present?
  • 1 - Deceit
  • 2 - Intent
  • 3 - Gain

6
STATISTICS
  • Number of investigations completed - 475
  • Approximately one quarter lead to criminal,
    disciplinary or administrative action
  • Defences determined loss - 1,200,000
  • Armys determined loss - 233,083
  • Over the past nine years determined fraud loss
    has averaged between 1.8m per year (1.1m to
    3.1m)

7
AREAS OF HIGH FRAUD RISK IN ARMY
  • Single Person Processing in ROMAN
  • Reserve Attendance Diaries
  • Employer Support Payment
  • (particularly to Self Employed Members)

8
SINGLE PERSON PROCESSING IN ROMAN
  • Large number of suspected frauds have occurred
    against this function in recent years.
  • Reason Code Managers (formation level) and ROMAN
    Supervisors (unit level) monitor these
    transactions for possible fraud
  • Management Audit Branch review all suspect
    transactions (harvested from ROMAN using Computer
    Aided Auditing Techniques).

9
RESERVE ATTENDANCE DIARIES (only for Units with
Reserve Members)
  • Diaries (where authorised) or roll books (if
    used) should be processed centrally and promptly.
  • Roll Book Reports and Reserve Forces Pay Advices
    are checked and signed promptly by the designated
    authority.
  • All pay staff must have their Pay Advices signed
    by the unit CO/OC, CCLK or other suitable member
    not involved in pay.
  • A suitable mbr not involved in pay should spot
    check transactions.

10
EMPLOYER SUPPORT PAYMENTS(only for Units with
Reserve Members)
  • This is a fraud and business risk due to the
    large number of erroneous transactions detected
    by audit.
  • A biannual review of all claims should be
    conducted by a member not involved in claim
    processing to ensure the claims are properly
    approved and the requisite documentation is
    maintained.
  • Management Audit Branch may review claims and
    approval process as part of Unit audits.

11
AREAS OF CONCERN FOR ARMY
  • Procurement and Contract Management
  • Defence Purchasing Card (Credit Card)
  • Defence Travel Card
  • Theft of Computing Equipment

12
PROCUREMENT AND CONTRACT MANAGEMENT FRAUD
  • Influence Seeking
  • False Invoicing
  • Collusion
  • Substitution

13
PROPER PROCUREMENT
  • Delegations must be be properly exercised prior
    to procurement by a properly authorised members.
  • Delegations change depending on the type of
    procurement (Simple, Complex, Official
    Hospitality etc)
  • Purchases are accordance with the requirements of
    Defence Procurement Policy Manual and the Chief
    Executive Instructions.
  • Contracting Helpdesk ph1800 100 605 or
  • email contracting_at_defence.gov.au
  • All purchases must be an efficient, effective and
    ethical use of Commonwealth resources.
  • Document your actions.

14
DEFENCE PURCHASING CARD
  • Used for Official Purposes only.
  • Card Holders are exercising procurement
    delegations and must abided by the requirements
    of Defence Procurement Policy Manual and the
    Chief Executive Instructions.
  • Report loss or theft of card immediately.
  • Purchases are reviewed by Card Management System
    Supervisors and Computer Aided Auditing
    Techniques.
  • Misuse card carries maximum penalty of 7 years
    imprisonment under the FMA Act 1997.

15
DEFENCE TRAVEL CARD
  • A financial Delegate, other than the traveller
    must approve all travel.
  • Diners utilises cash and card limits as well as
    merchant blocking (eg brothels) and operate fraud
    prevention software to mitigate against 3rd party
    fraud.
  • A second person (Card Management System
    Supervisor) reviews actual expense to ensure it
    falls within the Delegate approved travel budget.
  • Report loss or theft of card immediately.
  • Misuse card carries maximum penalty of 7 years
    imprisonment under the FMA Act 1997.

16
THEFT OF COMPUTING EQUIPMENT
  • Theft of Computing Equipment is the main
    contributor to financial fraud loss across the
    department.
  • Protect valuable, useful and easily portable
    assets (eg. laptops, lightpros, PDAs).
  • Report all suspected thefts/losses immediately.
  • Units must conduct regular spot checks and
    stocktakes of these asset types.

17
FRAUD INDICATORS
  • Continually circumvent established procedures
  • Avoid the proper level of review
  • Mismanage resources
  • Improperly access other peoples logons
  • Behave or spend extravagantly
  • Take leave in an unusual pattern or are unwilling
    to take leave
  • Dont retain documentation (lack of audit trail)
  • Travel for unexplained reasons
  • Have personnel problems (gambling, debt problems
    etc..)

18
PROFILE OF A TYPICAL FRAUDSTER
  • Male aged 31 years acting alone
  • Non-management employee of the victim
    organisation with no known prior dishonesty with
    a previous employer
  • Six years with the organisation and held his
    current position for four years at the time of
    detection
  • Misappropriated funds to an average value of
    337,734 and was motivated by greed (38) or
    gambling (21)
  • Detected by a workplace colleague 13 months after
    the commencement of the fraud
  • The organisation recovered only 21 percent of the
    proceeds of the fraud
  • Belong to organisations that do not take a
    pro-active approach to fraud control

KPMG Australian Fraud Survey 8 Nov 04
19
I deserve this!
They all do it!
Its my turn!
No one cares!
I wont be caught!
FRAUD IS 90 OPPORTUNITY and 10 INTENT
20
The Financial Management and Accountability Act,
1997 and You!
Section 14 of the FMA Act applies a maximum
penalty of seven years imprisonment for any
official who misapplies, improperly disposes of,
or improperly uses, public money.
  • Section 41 of the FMA Act applies a maximum
    penalty of seven years imprisonment for any
    official who misapplies, improperly disposes of,
    or improperly uses, public property.

DFDA, Public Service Act and Crimes Act
21
WARNING
  • All Fraud WILL be prosecuted.
  • ALL Monies (including Penalties Costs) will be
    recovered.
  • ALL Penalties, Costs and Repayments can be
    recovered through your superannuation fund.

22
  • FRAUD IS A
  • CAREER ENDING MOVE

23
Fraud
WASTE AND ABUSE OF RESOURCES
Good Governance - Efficient, Effective and
Ethical Resource Management
Opportunity and Mismanagement
Checks and Balances
Risk Averse Environment
24
Fraud
MISMANAGEMENT
Deliberate non-compliance with proper procedures.
25
Fraud
WASTE OF RESOURCES
Waste of resources is the extravagant or needless
use of Defence Resources
26
Fraud
ABUSE OF RESOURCES

Abuse of resources is the finding and/or use of
loopholes to obtain a benefit
27
ABUSE OF POSITION FOR PERSONAL GAIN
  • Conflicts of Interest
  • gifts, hospitality, travel
  • securing employment (post separation / second
    job)
  • Misuse of Authority
  • lack of role model behavior
  • inappropriate directions or recommendations

28
CONSEQUENCES OF FRAUD, WASTE AND ABUSE
  • Loss of Army Resources
  • Damaged relation between Defence and Industry
  • Reduced Capability
  • Delays in Army activities
  • Loss of public confidence in Army
  • Political embarrassment for the Government and
  • Poor Morale.

29
REDUCING FRAUD, WASTE AND ABUSE
  • Prosecute offenders, including in routine or
    minor instances where appropriate (clear message
    of zero tolerance)
  • Provide effective management and supervision
  • Perform internal checks and audits
  • Implement a Fraud Control Plan
  • Ensure personnel follow set procedures and have
    adequate training and
  • Ensure all resource management decisions are
    efficient, effective and ethical.

30
Fraud
Waste and Abuse of Resources
Good Governance - Efficient, Effective and
Ethical Resource Management
Opportunity and Mismanagement
Checks and Balances
RISK AVERSE ENVIRONMENT
31
RISK AVERSE ENVIRONMENT
  • an overly-bureaucratic decision and approval
    processes that give the false impression of
    managing risk
  • a failure to devolve responsibility to the
    appropriate level
  • stovepipe mentality with the resultant
    piecemeal rather than holistic view
  • can be overcome through the application of proper
    risk management principles

32
Fraud
Waste and Abuse of Resources
GOOD GOVERNANCE - Efficient, Effective and
Ethical Resource Management
Opportunity and Mismanagement
Checks and Balances
Risk Averse Environment
33
  • Army members have a legal duty to act
    efficiently, effectively and ethically when
    making decisions involving Commonwealth
    resources. Personal interests must not be
    allowed to affect their decisions.
  • FMA Act 1997 DI(G) PERS 25-2 to 25-6

34
EFFICIENT AND EFFECTIVE
  • Efficiency (output)
  • Avoid waste and abuse of resources
  • Properly manage and address risk
  • Must be measured against effectiveness
  • Effectiveness (outcome)
  • Define Requirements
  • Plan
  • Document
  • Consult
  • Completeness and Quality

35
ETHICS?
  • Ethics is a set of principles by which your
    actions may be judged good or bad, right or wrong

36
THE AUSTRALIAN ARMYS PRINCIPLES
Our Ethos Service to the Nation Service before
Self
Our Values Courage Initiative Teamwork
Our Standards of Behaviour Abide by the laws set
by society Abide by Military Law Abide by the Law
of Armed Conflict Follow the Rules for a Fair Go
37
ETHICS AT WORK
  • Understand Defence position on ethical issues
  • Be honest, truthful and forthright
  • Maintain integrity in the face of ethical
    dilemmas
  • Consider the consequences of your actions
  • Take responsibility for your actions

38
SOLVING ETHICAL DILEMMAS
  • 1. Do you have the authority/responsibility?
  • 2. Identify and Explore all options
  • 3. Discuss the Matter
  • 4. Recognise the potential consequences
  • 5. Own the decision
  • 6. Be able to justify the decision (document
    everything)

39
DUE DILIGENCE(in your area of responsibility)
  • Must be able to prove that you have taken all
    care to ensure that the appropriate controls are
    in place.
  • Making sure that you have taken all care to
    get it right (true accurate),
  • That you have the whole picture, and that there
    aren't any skeletons in the cupboard.

40
ETHICS IS A CULTUREEveryone needs to be
involvedDont turn a blind eye
41
Fraud
Waste and Abuse of Resources
Good Governance - Efficient, Effective and
Ethical Resource Management
Opportunity and Mismanagement
Checks and Balances
Risk Averse Environment
42
ETHICS AND FRAUD STRATEGY
Leaders are responsible accountable for
upholding and promoting the Values, Ethos and
Standards of the Australian Army All decisions
are based on Values Instructions All units
have Fraud Control Plans in place All Fraud is
reported and investigated.
43
HOW DO I REPORT FRAUD?
Defence Whistleblowers Scheme 1800 673 502
Suspected Fraud or Irregularity
(Chain of Command)
Refer to Senior Officer or NCO
  • Debrief person who formed suspicion
  • Document action
  • Report action and send documentation to superior
    HQ.

(Clearly without foundation)
Refer to Unit Commander
(May be founded)
Refer to Military Police for investigation and
advice
44
WHEN SHOULD I USE THE WHISTLEBLOWER HOTLINE?
  • the chain of command is perceived to be corrupted
    or ineffective
  • the individual believes that they may be
    victimised, discriminated against or
    disadvantaged
  • Were the chain of command has been tried and
    failed

1800 673 502
45
FURTHER INFORMATION
Army Fraud Control Web Site http//intranet.defe
nce.gov.au/armyweb/Sites/DGCMPA/Load.asp?Page2586
9TitleFraud Control
46
Questions?
About PowerShow.com