Fraud

… a core concept used in Implementation and Delivery and Atlas107

Concept description

The OECD defines fraud (reference below) as “the acquisition of another person’s property by deception” and notes that it is the “severest form of an irregularity.”

In 2007 the UK Treasury published a National Fraud Report (reference below) that listed seven types of fraud committed during the review period by employees of government departments:

  1. Payment fraud: These are frauds that involve falsely creating or diverting payments. Examples of cases reported included:
    • Creating bogus customer records and bank accounts in order to generate false payments;
    • Intercepting cheques and Payable Orders and attempts to cash them. In some cases alterations are made to payee details and amounts;
    • Creating false records to support fraudulent claims for benefits;
      Processing false claims by accomplices for benefits, grants or repayments;
    • A member of staff authorising payments to himself.
  2. Theft of assets: This category relates to the theft of physical assets, including cash. Many cases arose because of weak security but some were opportunistic thefts (e.g. items such as laptops or mobile phones stolen from peoples’ desks), demonstrating the importance of storing such items securely at all times when not in use.
  3. Receipt fraud: Fraud in this area can include the theft of incoming cash or cheques (which can be opportunistic or coupled with the manipulation of financial records to disguise thefts) or adjusting records of amounts owed by customers to departments in return for cash rewards or other incentives.
  4. Travel and subsistence fraud: Fraud in this area involves such activities as the completion of fraudulent claims for payment or the creation of false payroll records. Examples of fraud include claims for journeys that were not made, overstated claims, claims for allowances for which there was no entitlement, forged signatures authorising payment, forged documentation supporting claims or applications for employment, falsification and/or unauthorised amendments of timesheets, false claims for working unsociable hours, deliberate failure to repay salary overpayments and the creation of non-existent personnel on payrolls.
  5. Procurement fraud and credit card fraud: Procurement is the whole process of acquisition from third parties and covers goods, services and construction projects. Procurement fraud can involve contractors, sub-contractors, Crown Servants or any combination of these often colluding to perpetrate a fraud or act of corruption. These categories cover tendering irregularities, unauthorised or irregular use of the Government Procurement Card (GPC) and payment claims for goods or services that were not delivered.
  6. Personnel management related fraud: Examples of fraudulent activities reported under this category included:
    • Staff on sick leave but working elsewhere;
    • Abuses of flexible working time systems;
    • Misuse of official time (e.g. abusing the department’s computer misuse policy);
    • Deceit or misrepresentation for advantage (e.g. false references or false qualifications used to secure employment).
  7. Exploiting assets and information fraud: This type of fraud involves using the assets of the organisation for other than official purposes and/or supplying information to outsiders for personal gain. Many of these cases had no reported value, as assessing losses is not always possible.
Atlas topic, subject, and course

Controlling Fraud, Waste, and Abuse (core topic) in Implementation and Delivery and Atlas107.

Sources

OECD Glossary of Statistical Terms, Fraud, at  at https://stats.oecd.org/glossary/detail.asp?ID=4773, accessed 14 October 2017.

HM Treasury Fraud Report 2006-07: an analysis of reported fraud in Government departments, October 2007.

Page created by: Ian Clark, last modified 14 October 2017.

Image: Hays CISD, at https://www.hayscisd.net/Page/264, accessed 14 October 2017.