For further information, including an example of a guideline on gifts and entertainment, see Appendix Four. Combating fraud Fraud is a form of corruption that can affect any part of the business in different ways and to varying degrees. Of course businesses cannot protect themselves completely from fraud. There is always the possibility of controls being undermined by collusion or abuse of authority. However, they can reduce the risk of fraud occurring by ensuring that management are aware of the conditions which typically lead to fraud and are alert to the warning signs that a fraud has been or is about to be committed.
Fraud is most likely to occur when management or supervision and controls are least effective.
To reduce the potential damage caused by fraud, some operating companies have developed fraud investigation policies and procedures. Most fraud investigations have to be conducted quickly and as soon as possible after a fraud is detected or suspected. If the right policies and procedures are not in place, the investigation may be undermined by the time pressures involved. Keeping suspected fraudsters in employment because the amount involved is thought to be 'non-material' or retiring them early are not acceptable substitutes for progressing a fraud investigation. Best practices in contracting and procurement Develop a contract management plan to cover all stages of the process from pre tender to post contract award.