Fraud and corruption is an unfortunate fact of life and one that is ever present in our communities and business sectors alike. It is a global pandemic that requires continuous focus and dedicated attention to ensure that the relevant risks are managed. Minister Gordhan’s 2014 Budget speech made reference to curbing fraud, and serves to further reinforce Government’s ongoing commitment to eradicate fraud and corruption. It should be borne in mind that fraud and corruption affects every citizen and taxpayer alike – whether you are a shareholder, investor or employee of government or business. Importantly, fraud and corruption negatively impacts those most in need.
Government and organisations need to ensure that robust Fraud and Corruption Prevention Strategies are in place and regularly reinforced, updated and tested. Fraud and Corruption Risk Management is not a singular intervention but rather a comprehensive and continuous process that requires integration within standard business processes. An effective strategy includes a number of interdependent facets:
- Effective policies, strategy and procedures relating to Fraud and Corruption Risk Management
- Ongoing fraud awareness and anti-fraud education facilitated through various mediums
- Regular Fraud and Corruption Risk Assessments conducted at both entity and business process levels
- Integration of updated Fraud and Corruption Risk registers within the broader Risk Management framework
- Effective response to incidents of fraud and corruption
- A mechanism such as a hotline to allow anonymous reporting
- Consistent resolution of incidents and prosecution of perpetrators
- Tracking and monitoring incidents of fraud and corruption, root causes, control related failures or inadequacies and trends within specific areas of an organisation
- Reporting statistics relating to the above to oversight bodies such as Audit Committees and SCOPA
- Utilising technology based solutions to support the strategy
Given the significant volumes of data, it would be naïve and ineffective not to use technology in harnessing the power of data in combatting fraud and corruption. If an organisation within the Public or Private sector is not utilising effective data analytics and technology based tools within its fraud and corruption prevention and detection strategy, then it is highly likely that it is not effective in dealing with fraud and corruption matters.
If you have any questions or require a more detailed discussion, we welcome you to contact Clayton Thomopoulos (Director, Risk Advisory, Deloitte & Touche) at email@example.com or on +27 (21) 4275680