Misconduct vs. Deficiency

… a core concept used in Implementation and Delivery and Atlas107

Click for pdf of Clark paper

Concept description

Financial resources can be misused in the public sector in ways that range from criminal misconduct to administrative deficiencies that can be shown to waste money.

In a 2007 paper (reference below, pdf on right), Ian Clark lists six classes of offence or deficiency:

  1. Fraud: an intentional act or omission, in respect of either expenditure or revenue, which involves the use or presentation of false, incorrect or incomplete statements or documents, or specific non-disclosure of information, or misapplication of funds or benefits. Fraud is a criminal offence.
  2. Irregularity: an omission due to error or negligence, or a deliberate act short of fraud, which undermines the integrity of government.
  3. Imprudence: an act or omission that falls short of the professional standards or ethical norms that could reasonably be expected of a person in that situation.
  4. Wastefulness: the payment of more than is necessary for goods or services required to deliver a government program.
  5. Inefficiency: the production of less output per dollar than would be possible with better processes and better management.
  6. Ineffectiveness: the production of less social benefit per dollar than would be possible with a better program design delivering better outputs.

Clark proposed that internal audit should focus on those that could be classified as misconduct (fraud and irregularity) and to a lesser extent on deficiencies classified as imprudence and wastefulness. Inefficiency and ineffectiveness are best addressed through program evaluation, as suggested in the table below.

Atlas topic, subject, and course

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

Sources

Ian Clark (2007), Accountability, Results and Misconduct – Controlling Fraud as a Focus for Internal Audit, uploaded to Atlas at http://www.atlas101.ca/pm/wp-content/uploads/2017/10/Accountability-Results-and-Misconduct-Controlling-Fraud-as-a-Focus-for-Internal-Audit.pdf, accessed 14 October 2017.

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

Image: Ian Clark (2007), Accountability, Results and Misconduct – Controlling Fraud as a Focus for Internal Audit, uploaded to Atlas at http://www.atlas101.ca/pm/wp-content/uploads/2017/10/Accountability-Results-and-Misconduct-Controlling-Fraud-as-a-Focus-for-Internal-Audit.pdf, accessed 14 October 2017.