CFDG Fraud Policy PDF

Charity Finance Directors Group: Fraud and Corruption policy (December 2006) Page 1 of 6
Fraud and corruption policy

December 2006


CONTENTS

1 Introduction 3
2 Reporting allegations of fraud or corruption 3
3 Prevention 4
3.1 The role of managers 4
3.2 Responsibilities of employees 4
4 Detection and investigation 5
5 Awareness and training 6
6 Review of this policy 6
1. Introduction

Charity Finance Directors Group expects employees at all levels will adopt
the highest standards of propriety and accountability. This procedure is non-
contractual, and sets out the steps we are taking to combat fraud and
corruption.

Fraud is defined as: "The intentional distortion of financial statements or
other records by persons internal or external to the organisation 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
organisation which is carried out to mislead or misrepresent.

Corruption is defined as: "The offering, giving, soliciting or acceptance of
an inducement or reward which may influence the action of any person. In
addition, "the failure to disclose an interest in order to gain financial or other
pecuniary gain.

2. Reporting allegations of fraud or corruption

Concerns must be raised when employees 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 unauthorised use of funds
deliberate concealment of or complicity in any of the above.

Charity Finance Directors Group will ensure that any allegations received in
any way, including by anonymous letters or phone calls, will be taken
seriously and investigated in an appropriate manner. (See our
"Whistleblowing policy)

We will deal firmly with those who defraud Charity Finance Directors Group,
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 raising malicious allegations)
may be dealt with as a disciplinary matter.

When fraud or corruption has occurred because of a breakdown in our
systems or procedures, Charity Finance Directors Group will ensure that
appropriate improvements in systems of control are implemented to prevent
a reoccurrence.
3. Prevention

3.1 The role of managers

Managers at all levels are responsible for the communication and
implementation of this policy in their work area. They are also responsible for
ensuring that their employees are aware of our Financial Regulations and
Procedure Rules, and that the requirements of each are being met in their
everyday business activities.

Managers are expected to strive to create an environment in which their staff
feel able to approach them with any concerns they may have about
suspected irregularities. Managers are responsible for initially following up
any allegation of fraud or corruption received and will:

deal promptly with the matter
report the matter to the Chief Executive
obtain advice from the Chief Executive, who will arrange for an
appropriate investigation to be carried out
record all the evidence received
ensure that evidence is sound and adequately supported
contact other agencies, for example the police, when necessary
notify our insurers, where appropriate
implement our disciplinary procedures where appropriate.

Special arrangements may be applied where employees are in charge of
financial systems and systems that generate payments, for example payroll.

Managers must ensure that relevant training is provided for employees.
Checks must be carried out at least annually to ensure that proper
procedures are being followed.

3.2 Responsibilities of employees

Each employee is governed in their work by our procedures and policies (for
example health and safety, IT security). They are also governed by our
codes of conduct for employees. (Included in this are guidelines on gifts and
hospitality and codes of conduct associated with professional and personal
conduct and conflicts of interest.)

Employees are responsible for ensuring that they follow the instructions
given to them by management, particularly in relation to the safekeeping of
the assets of Charity Finance Directors Group.

Employees are expected always to be aware of the possibility that fraud,
corruption or theft may exist in the workplace and be able to share their
concerns with management. However, should he/she prefer (perhaps
because the manager is unavailable or indeed might be the cause of the
concern), then any of the following, all of whom are designated to deal with
such matters, may be approached: Chief Executive, Deputy Chief Executive
or any Trustee.

If employees still feel unable to raise their concerns through any of the above
internal routes then they may wish to raise them through Public Concern at
Work (020 7404 6609) a registered charity whose services are free and
strictly confidential.

We recognise that a key preventative measure in dealing with fraud and
corruption is 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. Our equal opportunities policy will be
adhered to during this process.

In particular, written references will be obtained regarding known honesty
and integrity of potential employees before employment offers are made and
checks will be made against the application form regarding qualifications and
previous employment.

4 Detection and investigation

There are systems controls in place to deter fraud and corruption, but it is
often the vigilance of employees that aids detection.

In some cases fraud is discovered by chance or by `tip-offs and
arrangements will be in place to enable such information to be properly dealt
with. Any decision to refer a matter to the police will be taken by the Chief
Executive.

We will normally wish the police to be made aware of, and investigate
independently, offenders where financial impropriety is discovered.

Our disciplinary procedures will be used to facilitate a thorough investigation
of any allegations of improper behaviour by employees.

5 Awareness and training

The organisation recognises that the continuing success of this strategy and
its general credibility will depend in part on the effectiveness of programmed
training and an awareness of employees throughout the organisation.

To facilitate this, positive and appropriate provision will be made via
induction and for employees via their development plans. This may include
specialist training for certain employees.

6 Review of this policy

This procedure will be kept under regular review to ensure its effectiveness.
Any comments on this procedure should be made to the Chief Executive.

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Charity Finance Directors Group: Fraud and Corruption policy (December 2006) Page 1 of 6

Fraud and corruption policy

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