How to build an anti-fraud culture

Are you able to measure the performance of your organisation's anti-fraud culture and is the coordination of your communication strategy adequate enough to make an impact in reducing your fraud risk.


If we are to preserve culture we must continue to create it


To understand and assess an organisations anti-fraud culture or whether it meets your perception of its impact and how it protects organisation revenues, you must consistently measure performance against your organisation anti-fraud approach and communication.


ETHICAL RESPONSE Vs ANTI-FRAUD CULTURE

Where an organisation's ethical response doesn't match what it aspires to achieve in creating an anti-fraud environment then it is unlikely that it will be able to build a sustainable anti-fraud culture.


Where there is evidence of improper conduct or poor performance in dealing with ethical issues, then an unethical culture or behaviour is likely to be tolerated. This type of behaviour will limit the engagement and interest of staff or suppliers in reporting suspicions of fraud that will ultimately leave an organisation with limited understanding of what its risk picture is. Examples of such behaviour might include:

  • Ethical issues that are reported through line management that aren't addressed

  • Whistleblower reports that aren't appropriately dealt with or an individual is targeted by the organisation through bullying or intimidation.

  • Improper treatment of suppliers or abuse of procurement route

  • using conflicts of interest or corrupt activities in obtaining or retaining contracts

DESIGN OUT FRAUD

Where an organisation communicates a strong message that an organisation takes fraud seriously, highlighting the types of fraud that it is being targeted by and where, that there is a proactive response and a greater chance that individuals will be caught, then it is likely that fraud and financial loss will reduce. Key areas of communication an anti-fraud message might include:

  • During the onboarding process, confirming conflicts of interest, ability to perform contracts and assessing a vendors own anti-fraud culture

  • Training and awareness provided to staff and suppliers that outline key typologies of fraud and where to report it

  • Ensuring that there are clauses within the contract that include anti-fraud and anti-bribery clauses, competition clauses to mitigate bid rigging, audit clauses, sub-contractor approval clauses

  • Financial, procurement and quality controls including 5 way matches before invoices are approved

  • Ability of an organisation to receive and respond to reports of suspicions of fraud or irregularity from staff, suppliers or consultants

  • Strong recruitment procedures to ensure that individuals with conflicts of interest or fraud risk are identified

CREATING AN ANTI-FRAUD CULTURE


Enhancing the culture of an organisation requires the coordinated construction of a communication strategy that builds on various aspects of an organisations intention to engage all staff, partners and suppliers in its drive to identify and mitigate risk. When planning and developing a communication strategy to build organisation culture, a number of areas should be considered:



  • Leadership including ownership and responsibility for the organisations anti-fraud culture and strategy that includes demonstrating the tone from the top, setting an example for ethical conduct

  • Communication with staff and suppliers including a reporting process for risk, having a whistleblower protection policy and education and awareness that outlines an organisations risk and their approach to mitigation

  • Internal engagement with staff that might include anti-fraud forums, having an anti-fraud platform and library that hosts organisation policies and anti-fraud message and communication

  • Supplier engagement including briefing, reporting process and visits to support their engagement with your organisations anti-fraud culture

  • External engagement and communication including involvement with local, national or international forums to support and enhance an organisation anti-fraud focus

  • Success measurement and performance indicators are an important part in monitoring and reporting positive outputs of the anti-fraud culture including areas that can assist its development

CONCLUSION

Communication and engagement with staff, suppliers, partners and third parties is integral in building an organisations anti-fraud culture. Publishing policies isn't enough and anti-fraud efforts should focus, not only on interaction with individuals but also look at how staff can be involved and drive an organisations anti-fraud efforts. After it is an organisations staff that understand where the challenges and weaknesses are within an organisations systems and controls.


So where do you start, is the challenge too big or do you need external guidance. Is doing nothing an option?


To assist organisations understand their risk picture Global Risk Alliance has numerous free templates and resources that assist professionals assess their risk.