Keighley
Town Council
APPENDICES A
None
1. Introduction
In administering its responsibilities, the
Town Council aims to prevent fraud and corruption whether it is attempted by
someone who is not part of the council, or from within the council, by an
employee or Member. The Council is committed to an effective Anti-Fraud and
Corruption Policy designed to promote high ethical standards, encourage prevention,
and promote detection.
The Responsible Financial Officer as the
“section 151 officer” has a statutory responsibility under section 151 of the
Local Government Act 1972 to ensure the proper arrangements for the Council’s
financial affairs and has developed financial codes of practice and accounting
instructions.
The Town Clerk has a statutory
responsibility to advise the Council on the legality of its decisions and to ensure
that the Council’s actions do not give rise to illegality or maladministration.
It is therefore essential for employees to follow the Council’s Policies and Procedures
to demonstrate that the Council is acting in an open and transparent manner.
Any suggestions of fraud, corruption or
theft will be investigated, both from within the Council and from external
sources. Any proven fraud will be dealt with in a consistent and proportionate
manner.
2. Definitions
Fraud and Corruption are defined as:
Fraud
The Fraud Act 2006 defines fraud as
follows:
A person is guilty of fraud if he/she is in
breach of any of the following:
- Fraud by false representation; that is if
a person:
i.
Dishonestly makes a
false representation, and
ii.
Intends, by making
the representation —
iii.
To make a gain for themselves
or another, or
iv.
To cause loss to another
or to expose another to a risk of loss.
- Fraud by failing to disclose information;
that is if a person:
i.
Dishonestly fails
to disclose to another person information which he/she is under a legal duty to
disclose, and
ii.
Intends, by failing
to disclose the information —
iii.
To make a gain for themselves
or another, or
iv.
To cause loss to
another or to expose another to a risk of loss
- Fraud by abuse of position; that is if a
person:
i.
Occupies a position
in which he is expected to safeguard, or not to act against, the financial
interests of another person,
ii.
Dishonestly abuses
that position, and
iii.
Intends, by means
of the abuse of that position—
iv.
To make a gain for themselves
or another, or
v.
To cause loss to
another or to expose another to a risk of loss.
Many of the offences referred to as fraud
are covered by the Theft Acts of 1968 and 1978. The term is used to describe
such acts as deception, bribery, forgery, extortion, corruption, theft,
conspiracy, embezzlement, misappropriation, false representation, concealment
of material facts and collusion.
“Fraud” is usually used to describe
depriving someone of something by deceit, which might either be misuse of funds
or other resources, or more complicated crimes like false accounting, or the
supply of false information. In legal terms, all these activities are the same
crime – theft.
Corruption
The deliberate use of one’s position for
direct or indirect personal gain. “Corruption” covers the offering, giving,
soliciting or acceptance of an inducement or reward, which may influence the
action of any person to act inappropriately.
Theft
The physical misappropriation of cash or
other tangible assets. A person is guilty of “theft” if he or she dishonestly
appropriates property belonging to another with the intention of permanently
depriving the other of it.
Money Laundering
Money laundering is the process by which
criminals attempt to “recycle” the proceeds of their criminal activities in
order to conceal its origins and ownership and which leaves them with money that
cannot be traced back.
Bribery
The Bribery Act 2010 received Royal Assent
on 8 April 2010. The Bribery Act 2010 introduces four main offences, simplified
as the following:
-
Bribing another
person: a person is guilty of an offence if he/she offers, promises or gives a financial
or other advantage to another person.
-
Offences relating
to being bribed: a person is guilty of an offence if he/she requests, agrees to
receive, or accepts a financial or other advantage. It does not matter whether
the recipient of the bribe receives it directly or through a third party, or
whether it is for the recipient’s ultimate advantage or not.
-
Bribery of a
foreign public official: a person who bribes a foreign public official is
guilty of an offence if the person’s intention is to influence the foreign
public official in their capacity, duty or role as a foreign public official.
-
Failure of
commercial organisations to prevent bribery: organisations, which include the
Town Council, must have adequate procedures in place to prevent bribery in
relation to the obtaining or retaining of business.
Note: a “financial” or “other advantage”
may include money, assets, gifts or services.
Prior to entering into any business
arrangements, all Council officers should ensure that they have taken all reasonable
steps to identify any potential areas of risk relating to bribery or
corruption.
3. Reporting Procedure
The Council’s expectation is that Members
and employees at all levels will comply with Standing Orders, Financial
Regulations and Council Policies.
The Council recognises that the primary
responsibility for the prevention and detection of fraud rests with management.
It is essential that employees of the Council report any irregularities, or
suspected irregularities to the Town Clerk.
The Town Clerk will, depending on the
nature and anticipated extent of the allegations, determine how the allegations
are to be investigated. The Town Clerk will then determine the method of
further investigation and will then initiate an investigation team where
appropriate.
The Town Clerk will:
a) Deal promptly with the matter.
b) Record all evidence received.
c) Ensure that evidence is sound and
adequately supported.
d) Ensure security of all evidence
collected.
e) Contact other agencies e.g. Police.
f) Notify the Council’s insurers.
g) Implement the Council’s disciplinary
procedures where appropriate.
The Council will also work in co-operation
with the following bodies that will assist in scrutinising its systems and
defences against fraud and corruption:
a) Internal Audit
b) External Audit
c) Central Government Departments and
Parliamentary Committees
d) HM Customs and Excise
e) Inland Revenue
f) Department for Work and Pensions
g) Police
4. Culture
There is an expectation and requirement
that all individuals and organisations associated in whatever way with the
Council will act with integrity and that all employees and Members will lead by
example in these matters.
Employees have an important role to play in
relation to protection against fraud and corruption. They will be encouraged to
report any concerns, associated with the Council’s finances, resources and
responsibilities and these will be thoroughly investigated. Any concern thus
raised in confidence will be treated in confidence as far as possible, but
relevant information may be passed on to those who need to know.
The Town Clerk is expected to deal promptly
under the necessary procedures with those who are suspected of defrauding the
Council or who may be corrupt.
There is, of course, a need to ensure that
any investigation process is not misused and, therefore raising unfounded
malicious allegations by an Officer/Member may amount to misconduct. Similar
allegations raised by other parties may result in legal action.
5. Prevention
The Council recognises that a key measure
against fraud and corruption is prevention. The first step in prevention is to
take effective measures at the recruitment stage to establish propriety and
integrity as far as reasonably practicable. In this regard temporary and
contract employee should be treated in the same manner as permanent employees.
Employees must be appointed in accordance
with the Council’s Recruitment and Selection Procedures. Also, written
references should be obtained and should include information regarding honesty
and integrity of potential employees. Employment will be conditional upon the
receipt of two satisfactory references.
Employees are required to follow the
Council Policies and Procedures as well as any relevant professional standards.
In addition, employees must also abide by the law.
The Council is responsible for ensuring
that there is a sound system for internal control which facilitates the effective
exercise of the Council’s functions and which includes arrangements for the
management of risk.
This is set out in the Council’s Code of
Corporate Governance. The Council has developed systems and procedures, which
incorporate efficient and effective internal controls, and which include
adequate separation of duties.
Members of the Council are required to
follow the Members’ Code of Conduct including the appropriate declaration and
registration of interests, the compliance with which will be subject to review
by the Town Clerk.
6. Money Laundering and E-Mail Scams
All employees should be aware of the
increasing possibility of receiving requests that could be used for money
laundering and illicit requests for money through e-mails.
Any Service that receives money from any
external person or body is potentially vulnerable to a money laundering
operation. The need for vigilance is vital and if there is any suspicion concerning
the appropriateness of the transaction then advice must be sought.
E-mail scams can take the form of either
requests for personal financial information such as bank account details or a
suggestion of the depositing of funds for money laundering purposes. Employees
are advised to forward the email to the Town Clerk and to then immediately
delete the email without responding or copying the email to any other person.
The Town Clerk will decide what further
action, if any, needs to be taken, including possible referral to the police.
7. Detection and Investigation
Internal controls have been established for
financial and other systems within the Council. They are designed to discourage
fraud and provide indicators of any fraudulent activity. It also relies on
employees, members and the public to be alert and to report any suspicion of
fraud and corruption.
Frauds are often discovered by a “tip-off”
but nevertheless it is essential that Officers and other employees have clear
monitoring and supervision arrangements in place, particularly in relation to
high risk areas.
Employees are required to report every
suspected irregularity in accordance with Clause 3.3 of the Reporting Procedure.
Reporting is essential to the Anti-Fraud and Corruption Policy as it:
a) Ensures the consistent treatment of
information prior to or during an investigation;
b) Facilitates proper investigation; and
c) Ensures the proper implementation of a
fraud response investigation plan.
The Town Clerk will be expected to take
action in accordance with the Council’s Disciplinary Procedures where the
outcome of the investigation indicates improper behaviour.
The Council will normally wish the police
to be made aware of and to prosecute independently offenders where financial
impropriety is discovered. The Town Clerk is responsible for referring any such
matter to the police.
8. Reporting Arrangements
Where a suspected irregularity is material
or could seriously affect the reputation of the Council then the Members must
be informed of this by the Town Clerk.
The type and nature of report(s) to the
Council will vary according to the type of alleged fraud being investigated.
These reports although confidential may need to be passed on to those who need
to know e.g. police, officers or Members and may be oral or written and either
interim or final. The usual procedure will be a preliminary investigation
followed by a brief report which may recommend an in-depth investigation, with
further interim reports as required. The final report will supersede all
interim reports and is the definitive document on which the Town Clerk will
base their further action.
For major incidents of fraud/corruption the
Town Clerk will, within 6 months of the submission of the final investigation
report, submit a summary report, in closed session, to Members. These reports
will contain details of the area investigated, the outcome, action taken to
prevent future occurrences, any losses suffered by the Council and any action
taken to recover such losses.
The Responsible Financial Officer as
Section 151 Officer as part of the annual update to Full Council, will submit a
summary of the control issues arising from completed investigations to Members
from Internal Audit Service. Depending on the nature of the alleged fraud being
investigated it may be necessary to have some informal briefings to both
officers and Members.
9. Post Investigation
The Council wishes to see that following an
investigation action is taken to minimise future occurrence. This may require a
change in management, systems and procedures or retraining of employees.
10. Training
The Council recognises that the continuing
success of its Anti-Fraud and Corruption Policy and its general credibility
will depend largely on the effectiveness of programmed training and
responsiveness of employees and Members throughout the organisation.
To facilitate this the Council supports the
concept of induction and re-induction training for Members and particularly for
employees involved in internal control systems to ensure that their
responsibilities and duties in this respect are regularly highlighted and
reinforced.
Employees who fail to follow such training
and guidance, or fail to follow proper working practices, may face disciplinary
action. Investigation of fraud and corruption may require specialist training.
11. Conclusion
The Council has in place a clear network of
systems and procedures to assist it in the fight against fraud and corruption.
It is determined that these arrangements will keep pace with any future
developments in both preventative and detection techniques regarding fraudulent
or corrupt activity that may affect its operation.