Selected Agencies Annual and Long Service Entitlements Background The objective of this analysis was to examine leave accruals for Northern Territory Government employees recorded in the Personnel Information and Payroll System at 28 February 2017 in order to identify any employees that had accumulated excessive leave accruals and to provide information about those employees to the entity’s management for review and follow-up. The entities included within the analytics were: Aboriginal Areas Protection Authority Batchelor Institute of Indigenous Tertiary Education Board of the Museum and Art Gallery Northern Territory Central Australia Health Service Data Centre Services Department of Corporate and Information Services Department of Education Department of Environment and Natural Resources Department of Health Department of Housing and Community Development Department of Infrastructure, Planning and Logistics Department of Primary Industry and Resources Department of the Attorney-General and Justice Department of the Chief Minister Department of the Legislative Assembly Department of Tourism and Culture Department of Business and Innovation Department of Treasury and Finance Land Development Corporation Northern Territory Auditor-General's Office Northern Territory Electoral Commission Northern Territory Legal Aid Commission Northern Territory Police, Fire and Emergency Services NT Fleet NT Home Ownership NT Treasury Corporation Office of the Commissioner for Public Employment Ombudsman's Office Power and Water Corporation Power Generation Corporation Power Retail Corporation Territory Families Territory Wildlife Parks Top End Health Services
Selected Agencies cont… NT Home Ownership; Office of the Commissioner for Public Employment; Ombudsman’s Office; and Territory Families. The survey responses were collated, and analysed, with findings summarised into this report to the Legislative Assembly. The review period considered what controls were in place at agencies as at 31 January 2017. Key Findings Frauds require three conditions to be perpetrated as represented in the Fraud Risk Triangle shown in Figure 2. These conditions are: Motivation – “Incentives and pressures that motivate an individual to commit a fraudulent act.” Opportunity – “Opportunities or perceived opportunities that provide an individual with some assurance that a act can be committed without being detected.” Rationalisation – “Attitudes or rationalizations that enable an individual to internally justify the performance of a fraudulent act.” Motivation and rationalisation are factors and are less able to be mitigated through the introduction of controls therefore the focus by the agency must be on identifying the opportunities for fraud and implementing controls to reduce the opportunity for fraud to occur.
Selected Agencies cont… Fraud Control Strategies – Overview The ANAO (page 27) describes the following four key fraud control strategies which, if designed appropriately, implemented and effective, should significantly mitigate the risk of fraud: Fraud prevention – those strategies designed to prevent fraud from occurring in the first instance. Fraud detection – strategies designed to discover fraud as soon as possible after it has occurred. Fraud response – systems and processes that assist an Agency to respond appropriately to an alleged fraud when it is detected. Fraud monitoring, reporting and evaluation – strategies to provide assurance that legislative responsibilities are being met, as well as promoting accountability by providing information that demonstrates compliance with specific fraud control strategies. Each of these elements must be actively managed and have clear responsibility allocated within the agency to be effective at all. These are discussed as separate sections in this report. Internal not the only area of concern As commented earlier, Agencies should consider that internal fraud committed by employees is not the only fraud that can be perpetrated against the Agency. A lot of time is spent focused on fraud that may be committed against an agency by its employees, however, just as much effort should be placed on fraud that may be perpetrated to an agency by an external party. Consideration should be given to managing the fraud risks perpetrated from three sources: Internally perpetrated fraud – fraud perpetrated by employees including management/executive; Externally perpetrated fraud – fraud perpetrated by parties outside the agency such as suppliers, service providers, contractors and benefit recipients; and Collusion – between employees and parties external to the agency. Some common types of fraud perpetrated from these sources are provided in Table 2. This is not an exhaustive list.
Selected Agencies cont… system controls to ensure accurate and up-to-date data; and communication about investigation outcomes to demonstrate that allegations and incidences of fraud are serious and appropriately dealt with.” [emphasis added] (ANAO Guide, page 31) The ANAO Guide at Table 5.2 (page 38) provides key features of an effective fraud control plan which agencies may wish to consider. Targets for fraud in the workplace Targets for fraud in the workplace are those areas that are susceptible to fraud. Common targets for fraud in the workplace include: property (cash, computers, portable and attractive items, stationery); information and intelligence (classified material); entitlements (expenses, leave, travel allowances and attendance records); facilities (unauthorised use of information technology and telecommunications systems); and supplier contracts (obtaining kickbacks from suppliers in return for manipulation of supply arrangements, overcharging by service providers and contractors). Survey results 15 agencies stated they had developed specific guidelines or procedures that would address all fraud matters, however, only two agencies provided general fraud awareness training. Fraud Control – Detection All agencies are susceptible to fraud. Unfortunately, “no system of preventative controls can provide absolute assurance. As such, entities should implement systems aimed at detecting fraud as soon as possible after it has occurred, in the event that the entity’s preventative systems fail.” (ANAO Guide, page 53)