Context /
Reporting a suspected fraud /
Investigation procedure /
Conduct of investigation /
Learn from past experience /
Disciplinary procedure /
Recovery of loss
Context
The purpose of this statement is to demonstrate and set out the
procedures to be followed by City of London staff where a fraud is
suspected or detected. It is part of the City of London’s overall
anti-fraud and corruption strategy. It therefore applies to all
Members (elected officers of the City of London) and all personnel
whether staff of the City of London, freelance, casual and
temporary agency staff and contractors.
Reporting a suspected
fraud
Any suspicion of fraud will be treated seriously and will be
reviewed and analysed in accordance with the Public Interest
Disclosure Act, the Human Rights Act and the City of London’s Fraud
Investigation Plan.
Action by employees
If you become aware of a suspected fraud or irregularity, write
down your concerns immediately. Make a note of all relevant
details, such as what was said in phone or other conversations, the
date, the time and the names of anyone involved. Report the matter
immediately to either:
- your Line Manager or
- your Divisional Director or
- your Chief Officer or
- the Chief Internal Auditor or
- the City of London’s Whistleblowing facility or
- the external confidential helpline 020 7404 6609 provided by
the charity, Public Concern at Work
When you report your concerns, arrange to handover your notes
and any evidence you have gathered to the appropriate
investigator.
Confidentiality for all parties will be maintained over reports
made in good faith which cannot be substantiated following
investigation.
A member of staff may choose to report their concerns
anonymously and such anonymity will be respected. It should be
noted that, if the report suggests criminal activity, and the case
is to be pursued by police, the identity of the person reporting
the details will be needed at a later date if criminal proceedings
are to be pursued effectively; identification is preferred and will
assist the investigation.
You must not do any of the following:
- contact the suspected perpetrator in an effort to determine
facts or demand restitution
- discuss the case facts, suspicions, or allegations with anyone
outside the City of London (including the Press) unless
specifically asked to do so by the Comptroller and City Solicitor’s
Department or the Chief Internal Auditor
- discuss the case with anyone within the City of London other
than the people listed above.
- attempt to personally conduct investigations or interviews or
question anyone unless asked to do so by the Chief Internal
Auditor
Action by managers
If you have reason to suspect fraud or corruption in your work
area, you should do the following:
- Listen to the concerns of your staff and treat every report you
receive seriously and sensitively
- Make sure that all staff concerns are given a fair hearing. You
should also reassure staff that they will not suffer because they
have told you of their suspicions.
- Get as much information as possible from the member of staff,
including any notes and any evidence they have that may support the
allegation. Do not interfere with any evidence and make sure it is
kept in a safe place.
- Do not try to carry out an investigation yourself. This may
damage any Internal Audit or criminal enquiry.
- Report the matter immediately to the Chief Internal
Auditor.
Malicious allegations
If an allegation is made frivolously, in bad faith, maliciously
or for personal gain, disciplinary action may be taken against the
person making the allegation.
Investigation procedure
Internal Audit is responsible for initiating and overseeing all
fraud investigations and for subsequent follow-up work to be
completed. Internal Audit will comply with the Fraud Investigation
Plan to ensure that all investigations conform to the same standard
and in accordance with legislation and the City of London’s
prosecution policy.
The Chief Internal Auditor is an accredited PiNS9A officer, who
has the authority to make enquiries and to obtain key information
from banks and utility companies to assist in investigations, where
appropriate.
Investigation results will not be disclosed to or discussed with
anyone other than those who have a legitimate need to know. This is
important in order to avoid damaging the reputations of persons
suspected, but subsequently found innocent of wrongful conduct, and
to protect the City of London from potential civil liability.
In cases where an individual is suspected of fraud which a
subsequent investigation does not substantiate, it is important
that the potential damage to the individual’s reputation is
minimised. Whoever originally reported the suspected fraud or
irregularity will be informed that the investigation has revealed
no wrongdoing.
Any necessary investigative activity will be conducted without
regard to any person’s relationship to the City of London, position
or length of service.
The Housing and Council Tax Benefit Fraud Team will follow its
own investigative procedure in line with the national standards for
housing benefit and council tax benefit investigations set by the
Department of Works and Pensions. This Team is responsible for
initiating and investigating all housing benefit and council tax
benefit frauds. This Fraud Team will actively consult the Chief
Internal Auditor during the course of its investigations as part of
its formal procedure.
Conduct of
investigation
Where an investigation is carried out by Internal Audit or the
Housing and Council Tax Benefit Fraud Team, it will be carried out
with discretion and sensitivity. Those carrying out the
investigation will confine themselves to investigating those
matters which are the subject of, or are relevant to, the suspected
fraud.
The Housing and Council Tax Benefit Fraud Team will conduct
their investigations in compliance with their dedicated Code of
Conduct, designed to meet the requirements of the Department of
Works and Pensions for the investigation of such frauds.
Internal Audit will conduct their investigations in accordance
with the Fraud Investigation Plan.
Once the investigation has been completed, a written report will
be prepared which states the facts discovered by the investigation.
The report will avoid speculation and no statement shall be made
that cannot be supported by the facts.
Learn from past experience
Where a fraud has occurred, management must make any necessary
changes to systems and procedures to ensure that similar frauds
will not recur. The investigation may highlight where there has
been a failure of supervision or a breakdown / absence of control.
Internal Audit is available to offer advice and assistance on
matters relating to internal control, if considered
appropriate.
Disciplinary procedure
As for other cases of misconduct, matters of alleged fraud will
be dealt with under the procedure laid down in City of London’s
Disciplinary Procedure.
Recovery of loss
Where the City of London has suffered loss, restitution will be
sought of any benefit or advantage obtained and the recovery of
costs will be sought from individual(s) responsible for fraud.
As a first step the individual concerned will be asked to make
good the loss.
It may be appropriate to consider recovering the loss from any
monies due to the individual on termination if the perpetrator is
an employee. The advice of the Comptroller and City Solicitor
should be sought before attempting to make recovery.
Where an employee is a member of the City of London’s Pension
Scheme, and is guilty of fraud, the City of London may be able to
recover the loss from the capital value of the individual’s accrued
benefits in the Scheme, which are then reduced as advised by the
actuary. If such action may be appropriate, the City of London’s
Pension Trustees, should be contacted in the first instance. The
Trustees have discretion over whether or not a recovery is
made.
If the individual will not make good the loss consideration
should be given to taking civil action to recover the loss, subject
to legal advice received.