Fraud Policy

Introduction

This document sets out the policy and procedures of CISI against fraud and other forms of dishonesty, together with the steps that must be taken when any of these practices are suspected or discovered.

It applies to Trustees, staff and volunteers. Anybody associated with CISI who commits fraud, theft or any other dishonesty that could negatively affect the business, or who becomes aware of it and does not report it, will be subject to appropriate disciplinary action.

Statement of intent

CISI will continually strive to ensure that all its financial and administrative processes are carried out and reported honestly, accurately, transparently and accountably and that all decisions are taken objectively and free of personal interest. We do not condone any behaviour that falls short of these principles.

All Trustees, employees and volunteers have a responsibility for putting these principles into practice and for reporting any breaches they discover.

Definitions

  • Fraud:  A deliberate intent to acquire money or goods dishonestly through the falsification of records or documents. The deliberate changing of financial statements or other records by either; a member of the public, someone who works or is a volunteer for CISI. The criminal act is the attempt to deceive and attempted fraud is therefore treated as seriously as accomplished fraud
  • Theft:   Dishonestly acquiring, suing or disposing of physical or intellectual property belonging to CISI or to individual members of the organisation.
  • Misuse of equipment:  Deliberately misusing materials or equipment belonging to CISI.
  • Abuse of position:   Exploiting a position of trust within the organisation.

Culture

Trustees, staff and volunteers are expected to lead by example in adhering to CISI’s policies, procedures and practices, including the Code of Conduct. Equally, members of the public, service users and external organisations (such as suppliers and contractors) are expected to act with integrity and without intent to commit fraud against the Charity in any dealings they may have with CISI.

CISI has a culture in which employees should feel able to raise any matter of genuine concern internally without fear of victimisation or discrimination. Employee concerns will be taken seriously and the matters raised will be investigated appropriately. CISI will not tolerate retaliation against those who speak up, or report instances of suspected or actual fraud.

As part of the culture, CISI provide clear routes by which concerns can be raised by Trustees, staff and volunteers and by those outside of CISI. A copy of the CISI’s Speak Up policy is available in the Employee Handbook at Section C 28.

Senior management are expected to deal promptly, firmly and fairly with suspicions and allegations of fraud or corrupt practice.

Responsibilities

CISI Trustees, senior management, staff and volunteers all have a duty to prevent and detect fraud and other forms of dishonesty and corruption. In relation to the prevention of fraud, theft, misuse of equipment and abuse of position, specific responsibilities are as follows:

a) Trustees:

The Trustees are responsible for establishing and maintaining a sound system of internal control that supports the achievement of CISI’s policies, aims and objectives. 

The system of internal control is designed to respond to and manage the whole range of risks that CISI 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 forms part of controlling this wider range of risks.

b) The Chief Executive Officer (CEO)

Overall responsibility for managing fraud risk has been delegated to the CEO, who is assisted with the detailed administration of policy by the Global Director of Finance.  His/her responsibilities include:

  • Undertaking a regular review of the fraud risks associated with each of the key organisational objectives.
  • Establishing an effective anti-fraud response plan, in proportion to the level of fraud risks identified.
  • The design of an effective control environment to prevent fraud. This includes setting staff incentives which do not encourage inappropriate risk taking or dishonesty, and creating a culture in which staff feel supported to report suspicions/instances of fraud.
  • Establishing appropriate mechanisms for:
    -reporting fraud risk issues
    -reporting significant incidents of fraud or attempted fraud to the Board of Director Trustees;
  • Liaising with CISI’s appointed Auditors.
  • Making sure that all staff are aware of CISI’s Anti-Fraud Policy and know what their responsibilities are in relation to combating fraud;
  • Ensuring that appropriate anti-fraud training is made available to Trustees, staff and volunteers as required; and
  • Ensuring that appropriate action is taken to minimise the risk of previous frauds occurring in future.

c) Senior Management Team:

The Senior Management Team is responsible for:

  • Ensuring that an adequate system of internal control exists within their areas of responsibility and that controls operate effectively;
  • Ensuring that staff incentives are given in line with the CISI’s policies on incentivising staff, and in a manner which will not encourage inappropriate risk taking or forms of dishonesty;
  • Creating an environment in which staff know that they will be supported when reporting suspicions or instances of fraud;
  • Listening to, and taking seriously, staff members reports about suspicions or instances of fraud, and escalating these concerns if appropriate;
  • Encouraging staff to attend anti-fraud training;
  • Assessing the types of risk involved in the operations for which they are responsible;
  • Reviewing the control systems for which they are responsible regularly;
  • Ensuring that controls are being complied with and their systems continue to operate effectively; and
  • Learning lessons, and, if necessary, implementing new controls to reduce the risk of similar fraud occurring where frauds have taken place.
d) Staff and Volunteers:

Every member of staff or volunteer is responsible for:

  • Acting with propriety in the use of CISI’s resources and the handling and use of funds whether they are involved with cash, receipts, payments or dealing with suppliers;
  • Ensuring decisions are made objectively and impartially, without being influenced by bias, selfishness or external pressures.
  • Conducting themselves with integrity, and adhering to the CISI’s principles of honesty, openness, transparency and fairness (set out in the Code of Conduct).
  • Displaying the qualities expected of a good leader, which include being accountable for their actions and understanding the consequences of their actions and decisions.
  • Attending anti-fraud training;
  • Being alert to the possibility that unusual events or transactions could be indicators of fraud;
  • Alerting their manager or other appropriate member of the CISI management team when they believe the opportunity for fraud exists e.g. because of poor procedures or lack of effective oversight (see the CISI’s Speak Up policy for further information about how to escalate a concern);
  • Reporting details immediately to their manager or other appropriate member of the CISI management team if they suspect that a fraud has been committed or see any suspicious acts or events; and
  • Cooperating fully with whoever is conducting internal checks or reviews or fraud investigations.

Detection and Investigation

Whilst having regard to the requirements of the Data Protection legislation, the CISI actively participates in an exchange of information with external agencies on fraud and corruption. Financial irregularity is often uncovered because of  the alertness of Trustees, staff or volunteers and the general public to the possibility of fraud and corruption.

The CEO must be notified immediately of all financial or accounting irregularities or suspected irregularities, or of any circumstances which may suggest the possibility of irregularities including those affecting cash, property, remuneration or allowances.

Reporting of suspected irregularities is essential as:

  • It facilitates a thorough investigation by experienced staff, and ensures the consistent application of policies and procedures designed to manage instances of fraud and corruption.
  • When he/she is notified of a suspected irregularity, the CEO will instigate an investigation by appointing a designated officer, auditor or other adviser.
  • The designated officer, auditor or other advisor will:
    -deal promptly with the matter
    -record evidence received in the course of the investigation
    -ensure the security and confidentiality of evidence
    -Work closely with senior managers of the CISI and other agencies, such as the Police and Courts to ensure that all issues are properly investigated and reported upon.
    -Ensure maximum recoveries are made on behalf of the CISI, and assist the senior managers to implement CISI’s disciplinary procedures where considered appropriate (referral to the Police will not prohibit or restrict action under the Disciplinary Procedure).
  • Malicious accusations may result in disciplinary action against the reporter(s).

Training

An important contribution to the continuing success of an anti-fraud strategy, and its general credibility, lies in the effectiveness of training Trustees, staff and volunteers throughout the organisation to be alert to the possibility of fraud and corruption, and the effectiveness of reporting structures and procedures.

This is achieved through the development of induction and refresher training for all personnel involved in internal control systems to ensure that their responsibilities and duties in this respect are clearly understood and reinforced.