Fighting Fraud in the Public Sector III

41% of government organisations experience at least one instance of economic crime in the past 24 months

The significant financial loss caused by fraud in the public sector continues to plague internal audit and risk teams. It is not just the one-off incident that we should be concerned about, but the increasing regularity of fraud – and changes in the origins of fraud. It is now time to take action to prevent, detect and fight fraud.

Summary:

  • The establishment of government anti-corruption agencies and their heightened profile and activity is raising awareness of the risk of economic crime in the public sector. But it remains a very real threat. Government entities should actively review and challenge their processes and controls, undertake risk assessment, and review and update their detection mechanisms.
  • The rising incidences of procurement fraud means the threat needs to be constantly evaluated, as procurement approaches evolve and move to more specialised or tailored models. You need to review and closely manage every stage of your organisation’s procurement process, and ensure that procedures are always followed.
  • Preventing cybercrime means recognising that this is a whole-of-business issue, involving not just technology but people and processes. Organisations must be vigilant and keep pace with emerging threats. You need to prioritise: identify which information is particularly important, sensitive or valuable, and protect it most stringently against unauthorised access. Detection systems can identify where employees are inappropriately accessing information, and a tight policy on user access and password controls is essential.
  • Do not neglect organisational culture. Workplace misconduct can lead to greater incentive to hurt or retaliate against an organisation by perpetrating fraud. You need clear policies and training on workplace behaviour, and must respond swiftly if a problem arises.
  • Risk assessment is important, but currently neglected. Nearly 40% of public sector organisations did not know whether they had performed a fraud risk assessment in the last 24 months.

Contact us

Cassandra Michie

Partner, PwC Australia

Tel: +61 2 8266 2774

Tony Peake

Partner, Client Lead Partner - Defence Account, PwC Australia

Tel: +61 3 8603 6248

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