Anti fraud policy

1. Overview

This policy covers:

• What is fraud
• Housing Ombudsman Service’s approach to fraud
• Reporting fraud
• Responsibilities
• Fraud response plan

2. What is fraud?

The term ‘fraud’ is commonly used to describe the use of deception to deprive, disadvantage or cause loss to another person or party. This can include theft, the misuse of funds or other resources or more complicated crimes such as false accounting and the supply of false information.

Individuals can be prosecuted under the Fraud Act 2006 if they make a false representation, fail to disclose information or abuse their position.

Some examples of fraud include false travel and subsistence claims, unauthorised changes to supplier bank accounts, sending false invoices for payment.

All fraudulent expenditure is considered to be irregular.

Read more information in Home Office: fighting fraud together.

3. Housing Ombudsman Service’s approach to fraud

Housing Ombudsman views fraud as an extremely serious matter and is committed to the prevention of fraud and the promotion of a counter-fraud culture. Fraud is an ever-present threat and could harm both the reputation of the Service and the resources that we manage.

We will investigate all instances of actual, attempted and suspected fraud committed by staff, consultants, suppliers and other third parties and will pursue appropriate action in cases of proven fraud to recover funds and assets lost. This may include, but is not limited to, disciplinary or contractual action, civil or criminal proceedings and referral to professional bodies as appropriate and/or legal action.

4. Reporting fraud

The Housing Ombudman Service encourages employees to report actual, attempted or suspected fraud and/or other forms of illegal activity without fear of reprisal.

Employees must report concerns about actual, attempted or suspected fraud to their manager or to the Director of Finance & Corporate Services.

The Public Interest Disclosure Act 1998 protects employees who raise concerns about certain matters of public interest in good faith. Staff can obtain free independent advice from the charity Protect, and should refer to Housing Ombudsman Service’s whistleblowing policy.

5. Responsibilities

Managing Public Money (Annex 4.9) sets the general responsibilities for public sector organisations in relation to fraud.

The Accounting Officer is responsible for establishing and maintaining a sound system of internal control that supports the achievement of departmental policies, aims and objectives. The system of internal control is designed to respond to and manage the whole range of risks that an organisation faces. The system of internal control is based on an on-going process designed to identify the principal risks, to evaluate the nature and extent of those risks and to manage them effectively.

Managing fraud risk will be seen in the context of the management of this wider range of risks.

Overall responsibility for managing the risk of fraud has been delegated to the Director of Finance & Corporate Services.

The Senior Leadership Team is responsible for:

• Establishing an anti-fraud policy and fraud response plan commensurate with the fraud risk profile and ensuring all employees are aware of these and know what their responsibilities are in relation to combating fraud.
• Ensuring effective controls exist to prevent and detect fraud.
• Ensuring arrangements are in place for reporting fraud and that all suspected or alleged fraud is investigated.
• Ensuring appropriate action is taken against those who commit fraud or who are implicated in it.
• Taking action to recover losses.
• Ensuring appropriate action is taken to minimise the risk of similar frauds occurring in the future.

Line managers are responsible for:

• Familiarising themselves with the types of fraud that might occur within their business area.
• Identifying the risks of fraud.
• Ensuring compliance with internal controls, policies and procedures.
• Reporting any actual, suspected or alleged.

All employees are responsible for:

• Acting with regularity and propriety in the use and management of service resources.
• Ensuring that Housing Ombudsman Service’s reputation and assets are protected against fraud.
• Conducting themselves in accordance with Housing Ombudsman Service’s policies.
• Being alert to the possibility that unusual events or transactions could be indicators of fraud.
• Reporting any suspicions of fraudulent activity to their manager or other nominated person; and assisting in the investigation of actual, suspected or alleged fraud, where necessary.

6. Fraud response plan

The Housing Ombudsman has prepared a fraud response plan that provides a checklist of actions and a guide to follow in the event that fraud is uncovered or suspected. The plan forms part of Housing Ombudsman Service’s anti-fraud policy and is available in the e-library. It covers reporting suspicions, securing evidence, preventing further losses, the investigation, recovery and disciplinary action.

7. Recording of fraud

All instances of fraud are recorded in a register. An annual return is submitted to DLUHC declaring any fraudulent activity that has taken place.

8. Fraud risks

Risk	Mitigation
Income – under declaration of member units	Unit returns verified and reconciled against external data and audited by NAO All variances over 1,000 units investigated
Expenditure – ghost employees on payroll, false overtime claims	Segregation of payroll authorisation Overtime approved by managers
Expenditure – fraud from suppliers	Invoices certified as goods received before payment made Checks on changes to bank details
Expenditure – fraud from suppliers due to procurement fraud risk	Suppliers are selected from frameworks reducing chance of collusion. Procurement is not a single activity reducing the chance of collusion; the Procurement team work with the end user of the good or service
Expenditure – false travel and subsistence   claims	New booking system ensures that claims are authorised and in line with policy. All additional claims supported by receipts and authorised by line manager
Expenditure – petty cash	None held so no risk
Cash – diversion of funds by finance staff	As above
Portable assets	Equipment register kept up to date
Compensation payments	All compensation payments are approved by THO and added to purchase ledger payment runs which is also reviewed and approved, so there is adequate segregation of duties and assurance