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We are committed to the prevention of fraud, corruption and theft, whether by employees, contractors or members of the public
Colchester Borough Council will proactively seek to deter, prevent and detect any instances of fraud and corruption.
Colchester Borough Council is committed to the prevention of fraud, corruption and theft, whether by employees, contractors or members of the public. It will be dealt with seriously, wherever it is found. The Council promotes a culture of honesty, openness and accountability and will take every action necessary to protect the public funds within its control from misappropriation.
Issued: November 2019
Colchester Borough Council, like every Local Authority, has a duty to ensure that it safeguards the public money that it is responsible for.
The Council expects the highest standards of conduct and integrity from all that have dealings with it including staff, members, contractors, volunteers and the public. It is committed to the elimination of fraud and corruption and to ensuring that all activities are conducted ethically, honestly and to the highest possible standard of openness and accountability so as to protect public safety and public money.
All suspicions or concerns of fraudulent or corrupt practise will be investigated. There will be no distinction made in investigation and action between cases that generate financial benefits and those that do not. Any investigations will not compromise the Council’s commitment to Equal Opportunities or the requirements of the Human Rights Act or any other relevant statutory provision.
This policy has been created with due regard to the CIPFA better Governance Forum’s Red Book 2 ‘Managing the Risk of Fraud’, the CIPFA 2014 Code of practise on managing the risk of fraud and corruption and the Audit Commission Publication ‘Protecting the Public Purse’.
This policy provides an overview of the measures designed to combat any attempted fraudulent or corrupt act. For ease of understanding it is separated into four areas as below:
Responsibilities and Prevention
Detection and Investigation
Awareness and Monitoring.
Fraud and corruption are defined as:
Fraud – “the intentional distortion of financial statements or other records by persons internal or external to the Authority, which is carried out to conceal the misappropriation of assets or otherwise for gain”.
In addition, fraud can also be defined as “the intentional distortion of financial statements or other records by persons internal or external to the authority, which is carried out to mislead or misrepresent”.
Corruption – “the offering, giving, soliciting or acceptance of an inducement or reward which may influence the action of any person”.
The Council also abides by the Bribery Act 2010 which covers, amongst other things, the offences of bribing another person, of allowing to be bribed and organisational responsibility. Such offences include:
The offer, promise or giving of financial or other advantage to another person in return for the person improperly performing a relevant function or activity
Requesting, agreeing to receive or accepting a financial or other advantage intending that, in consequence a relevant function or activity should be performed improperly.
Commercial organisation responsibility for a person, associated with the organisation, bribing another person for the purpose of obtaining or retaining business for the organisation.
In addition, this policy also covers “the failure to disclose an interest in order to gain financial or other pecuniary benefit.”
The prevention/detection of fraud/corruption and the protection of public money are responsibilities of everyone, both internal and external to the organisation. The Council’s elected members and employees play an important role in creating and maintaining this culture. They are positively encouraged to raise concerns regarding fraud and corruption, immaterial of seniority, rank or status, in the knowledge that such concerns will, wherever possible, be treated in confidence. The public also has a role to play in this process and should inform the Council if they feel that fraud/corruption may have occurred.
Concerns must be raised when members, employees or the public reasonably believe that one or more of the following has occurred, is in the process of occurring or is likely to occur:
A criminal offence
A failure to comply with a statutory or legal obligation
Improper or unauthorised use of public or other official funds
A miscarriage of justice
Maladministration, misconduct or malpractice
Endangering an individual’s health and/or safety
Damage to the environment
Deliberate concealment of any of the above.
The Council will ensure that any allegations received in any way, including by anonymous letter or telephone call, will be taken seriously and investigated in an appropriate manner. The Council has a whistle blowing policy that sets out the approach to these types of allegation in more detail.
The Council will deal firmly with those who defraud the Council or who are corrupt, or
where there has been financial malpractice. There is, of course, a need to ensure that any investigation process is not misused and, therefore, any abuse (such as
employees/members raising malicious allegations) may be dealt with as a disciplinary matter (employees) or through Group procedures (members).
When fraud or corruption has occurred due to a breakdown in the Council’s systems or procedures, Directors will ensure that appropriate improvements in systems of control are implemented in order to prevent a re-occurrence
As elected representatives, all members of the Council have a duty to protect the Council and public money from any acts of fraud and corruption. This is done through existing practice, compliance with the Council’s Members’ Code of Conduct, the Council’s Constitution including Financial Regulations and Standing Orders and relevant legislation. Conduct and ethical matters are specifically brought to the attention of members during induction and include the declaration and registration of interests. Officers advise members of new legislative or procedural requirements.
The Monitoring Officer is responsible for ensuring that all decisions made by the Council are within the law. The Monitoring Officer’s key role is to promote and maintain high standards of conduct throughout the Council by developing, enforcing and reporting appropriate governance arrangements including codes of conduct and other standards policies.
All suspected instances of fraud or corruption (apart from benefit claim issues) should be reported to the Monitoring Officer.
The Strategic Finance Manager has been designated with the statutory responsibilities of the Finance Director as defined by s151 of the Local Government Act 1972. These responsibilities outline that every local authority in England and Wales should: “make arrangements for the proper administration of their financial affairs and shall secure that one of their officers has the responsibility or the administration of those affairs”
‘Proper administration’ encompasses all aspects of local authority financial management including:
Compliance with the statutory requirements for accounting and internal audit;
Managing the financial affairs of the Council
The proper exercise of a wide range of delegated powers both formal and informal;
The recognition of the fiduciary responsibility owed to local tax payers.
Under these statutory responsibilities the Section 151 Officercontributes to the anti-fraud and corruption framework of the Council.
Managers at all levels are responsible for the communication and implementation of this policy. They are also responsible for ensuring that their employees are aware of the Councils personnel policies and procedures, the Council’s Financial Regulations and Standing Orders and that the requirements of each are being met. Managers are expected to create an environment in which their staff feel able to approach them with any concerns they may have about suspected irregularities. Special arrangements may be applied from time to time for example where employees are responsible for cash handling or are in charge of financial systems and systems that generate payments, for example payroll or the Revenues and Benefits computer system. These procedures will be supported by relevant training.
The Council recognises that a key preventative measure in dealing with fraud and
corruption is for managers to take effective steps at the recruitment stage to establish, as far as possible, the honesty and integrity of potential employees, whether for permanent, temporary or casual posts and agency staff. The Council’s formal recruitment procedure contains appropriate safeguards in the form of written references, the verification of qualifications held and employment history. Disclosure and Barring Service (DBS) checks are undertaken for employees working with or who may have contact with children or vulnerable adults.
Each employee is governed in their work by the Council’s Standing Orders and Financial Regulations, and other policies on conduct and IT usage. Included in the Council policies are guidelines on Gifts and Hospitality, and codes of conduct associated with professional and personal conduct and conflict of interest. These are issued to all employees when they join the Council. In addition, employees are responsible for ensuring that they follow any instructions given to them, particularly in relation to the safekeeping of the assets of the Council. Employees are expected always to be aware of the possibility that fraud, corruption and theft may exist in the workplace and be able to share their concerns with management.
Internal Audit plays a preventative role in trying to ensure that systems and procedures are in place to prevent and deter fraud and corruption. Internal Audit may be requested to investigate cases of suspected financial irregularity, fraud or corruption, except Benefit fraud investigations, in accordance with agreed procedures. Within the Financial Procedure Rules in the Constitution, representatives of Internal Audit are empowered to:
enter at all reasonable times any Council premises or land
have access to all records, documentation and correspondence relating to any financial and other transactions as considered necessary
have access to records belonging to third parties such as contractors when required
require and receive such explanations as are regarded necessary concerning any matter under examination
require any employee of the Council to account for cash, stores or any other Council property under his/her control or possession
Internal Audit liaises with management to recommend changes in procedures to reduce risks and prevent losses to the Authority.
Any allegations of benefit fraud are to be referred to the Department of Work and Pensions for investigation.
The team consists of various officers whose roles include governance issues and the objective is to promote and embed a governance culture throughout the organisation by implementing policies, reviewing issues, providing training and sharing information.
Independent external audit is an essential safeguard of the stewardship of public money. This is currently carried out by BDO UK LLP through specific reviews that are designed to test (amongst other things) the adequacy of the Council’s financial systems and arrangements for preventing and detecting fraud and corruption. It is not the external auditors’ function to prevent fraud and irregularities, but the integrity of public funds is at all times a matter of general concern. External auditors are always alert to the possibility of fraud and irregularity, and will act without undue delay if grounds for suspicion come to their notice. The Council contributes to the bi-annual National Fraud Initiative which is designed to cross-match customers across authorities to highlight areas where there are potential fraudulent claims.
This policy, although primarily aimed at those within or associated with the Council,
enables concerns raised by the public to be investigated, as appropriate, by the relevant person in a proper manner.
Both elected members and employees must ensure that they avoid situations where there is a potential for a conflict of interest. Such situations can arise with externalisation of services, internal tendering, planning and land issues etc. Effective role separation will ensure decisions made are seen to be based upon impartial advice and avoid questions about improper disclosure of confidential information.
In addition to Financial Regulations and Standing Orders, due regard will be had to
external and inspectorate recommendations.
The Council is aware of the high degree of external scrutiny of its affairs by a variety of bodies such as Government Inspection bodies, the Local Government and Social Care Ombudsman, HM Customs and Excise and the Inland Revenue. These bodies are important in highlighting any areas where improvements can be made.
Internal Audit plays an important role in the detection of fraud and corruption. Included within the audit plans are reviews of system controls including financial controls and specific fraud and corruption tests, spot checks and unannounced visits.
In addition to Internal Audit, there are numerous systems and management controls in place to deter fraud and corruption but it is often the vigilance of employees and members of the public that aids detection. In some cases frauds are discovered by chance or “tip-off” and the Council will ensure that such information is properly dealt with within its whistle blowing policies.
Detailed guidance on the investigation process is available separately.
The Council’s Disciplinary Procedures will be used to facilitate a thorough investigation of any allegations of improper behaviour by employees. Theft, fraud and corruption are serious offences which may constitute gross misconduct against the Council and employees will face disciplinary action if there is evidence that they have been involved in these activities, including Benefit fraud. Disciplinary action will be taken in addition to, or instead of, criminal proceedings depending on the circumstances of each individual case.
Members will face appropriate action under this policy if they are found to have been involved in theft, fraud and corruption against the Authority. Action will be taken in addition to, or instead of criminal proceedings, depending on the circumstances of each individual case but in a consistent manner. If the matter is a breach of the Members’ Code of Conduct then it will be dealt with in accordance with the Arrangements agreed by the Council in accordance with the Localism Act 2011.
In terms of proceedings the Council will endeavour to take action in relevant cases to deter others from committing offences against the Authority.
The Council will optimise the publicity opportunities associated with anti-fraud and
corruption activity within the Council. Wherever possible, where the Council has suffered a financial loss action will be taken to pursue the recovery of the loss.
All anti-fraud and corruption activities, including the update of this policy, will be publicised.
The Council recognises that the continuing success of this policy and its general
credibility will depend in part on the effectiveness of training and awareness for members and employees and will therefore take appropriate action to raise awareness levels.
The Monitoring Officer will provide an annual report to senior management and members outlining investigations undertaken during the year.
This policy and associated procedures will be reviewed at least annually and will be reported to senior management and the Governance and Audit Committee.