Counter fraud and corruption strategy

7.5. Fraudulent activity impacts across geographical boundaries and different public sector bodies. Thus, effective cooperation and joint working between local authorities and other agencies are essential in the ongoing development of the council’s strategic response for prevention, detection and investigation of fraud.

7.6. To this end, the council will develop working relationships with other organisations, including promoting data sharing and matching, to obtain the best outcomes and protect public funds. Key organisations will include (but are not limited to) the council’s contractors, Registered Social Landlords, Local Government Authorities, the Police and other enforcement agencies, the Department for Work and Pensions and other Central Government bodies.

7.7. The council also participates in the National Fraud Initiative (NFI) and the London Fraud Hub. The NFI requires public bodies to submit a number of data sets to the Cabinet Office for data matching with other information sets held by public bodies. The London Fraud Hub undertakes similar or thematic matching on a voluntary basis across London Boroughs. Positive matches will be reviewed and investigated on a risk basis.

7.8. We work in partnership with the Royal Borough of Greenwich to investigate allegations of fraud and corruption under a contractual agreement.

Investigation

7.9. All officers and Members must report any suspicions of fraud or irregularity. This includes fraud / irregularity perpetrated for the benefit of the council as well as fraud perpetrated against the council. Usually, staff will report initially to their line manager and if this is not appropriate then to the Head of Service.

7.10. Alternatively, employees may prefer to utilise the arrangements set out in the Whistleblowing policy which provides alternative trusted routes to raise concerns. This policy exists to encourage individuals to speak up without fear of reprisals and provides protection to individuals raising concerns.

7.11. To facilitate a speedy and appropriate response, employees reporting their concerns should, where possible, outline the following:

• The nature of the concern and the potential or actual loss to the council, the council’s client or the relevant person / organisation.
• When and how the matter came to light.
• Officers and / or other parties alleged to be implicated (names and designations where appropriate).
• The names and roles of any other individuals who are aware of the potential fraud/irregularity.

7.12. The line manager or Assistant Director/Head of Service who receives the allegation must refer the matter to the Head of Audit and Assurance. This can be done by calling the Head of Audit and Assurance directly on 0208 313 4308 or using the dedicated fraud number 0800 169 6975 or email audit@bromley.gov.uk.

7.13. These contact details can also be used by members of the public and other stakeholders. They are publicised on the council’s website.

7.14. In the absence of the Head of Audit and Assurance, reports should be made to the Director of Finance or the Audit and Assurance Manager, who will liaise with the Royal Borough of Greenwich Counter Fraud Team for specialist advice as necessary.

7.15. Care needs to be taken to ensure that officers or Members who may be involved in the suspected irregularity do not become aware that the irregularity has been reported. Staff should not carry out their own investigation prior to notifying the Head of Audit and Assurance as this can compromise any subsequent investigation.

7.16. The Head of Audit and Assurance will determine the appropriate risk-based course of action to ensure that any investigation is carried out in accordance with legislation and council policy. Depending on the nature, materiality and seriousness of the allegation, the Head of Audit and Assurance may convene a ‘response group’ of the following to determine next steps:

• Director of Finance (Section 151 Officer)
• Director of Human Resources, Customer Services and Public Affairs
• Director of Corporate Services and Governance (Monitoring Officer)
• Royal Borough of Greenwich Counter Fraud representative
• Relevant Director
• Other stakeholders, as relevant and appropriate to the nature of the allegation.

7.17. Appropriate action could include:

• Investigation undertaken by specialist fraud staff
• Joint investigation between managers from relevant departments and audit or fraud staff
• Investigation by management with support from internal audit
• Referral to the police or other relevant agency to investigate.

7.18. Where the allegation is of a fraud / irregularity which is intended to benefit the council, or cause a loss to a third party (ies), the response group will also need to decide when and how the third party is notified, whether independence can be properly maintained through an internal investigation, whether referral to a crime agency is required and how any third party losses will be repaid. These decisions will be taken on a case by case basis but the final decision rests with the Director of Finance. Dependent on the information and evidence available when the allegation is first made, it may be appropriate to undertake initial investigations to further substantiate the allegations or otherwise, before onward referral or notification. However, the Director of the relevant service area must take immediate action to prevent any further losses to third parties.

7.19. Successful criminal prosecutions require cases to be professionally investigated ensuring all evidence is collected within the law. Investigative staff must be adequately trained with the appropriate skills and access to specialist resources to secure effective prosecutions.

7.20. Fraud investigators will be provided with access to all personnel, assets, systems and information required in order to complete their investigation.

7.21. The Head of Audit and Assurance will develop a Fraud Response Plan providing further detail on operational response to fraud and publicise this to all officers via the intranet.

Investigation outcomes

7.22. The investigator will report the facts revealed during their investigations to relevant managers as agreed at the outset of the investigation. This will include the Head of Service / Assistant Director and Director but may also include, for example, the Director of Finance and the Director of Human Resources, Customer Services and Public Affairs depending on the nature of the alleged fraud.

7.23. In line with its zero-tolerance approach, London Borough of Bromley deems all fraudulent activity to be unacceptable, regardless of whether the fraud is intended to be detrimental or beneficial to the council. Where fraud is established, the council will always seek the most appropriate sanction and will ensure that these are imposed. Sanctions can take the form of disciplinary action, referral to professional bodies, civil penalties/proceedings, regulatory action, and criminal prosecution. These sanctions are not mutually exclusive, and a person found to have committed fraud against Bromley or whilst working on behalf of Bromley may receive more than one sanction. For example, a member of staff found to have committed fraud against the council may face disciplinary action, referral to the relevant professional body and prosecution.

7.24. Decisions on appropriate sanctions will take into account the nature of the case, the provisions available through any applicable legislation, internal policies, the Code for Crown Prosecutors and aggravating and mitigating factors in the case. Sanction decisions will be approved by a senior officer within the Fraud or Audit and Assurance Service and the rationale will be documented. Criminal prosecutions will be authorised by Legal Services.

7.25. Where the outcome of an investigation indicates that a council officer has been involved in fraud or irregularity, this will be dealt with through the disciplinary policy. The council may also refer the matter to the Police or undertake its own criminal prosecution. The final decision on police referral in these instances rests with the Director of Finance. The Monitoring Officer must authorise any council criminal prosecution of an employee (or former employee), on the basis of the evidential and public interest tests.

7.26. Every effort will be made to recoup losses and assets gained as a result of criminal activity.

7.27. The investigation will also identify where control weaknesses have facilitated the perpetration of fraud. Where fraud or irregularity has occurred, management must review controls to rectify weaknesses, strengthening systems and processes to ensure that similar fraud / irregularity is unlikely to occur. Internal Audit can assist managers with risk / control reviews on these occasions.