Helping Our Future requires its Board Members and staff at all times to act honestly and with integrity and to safeguard the resources for which Helping Our Future is responsible.
Fraud and Corruption is an ever-present threat to these resources and hence must be a concern to all employees and persons employed in a similar capacity.
Fraud and Corruption may occur internally or externally and may be perpetrated by staff, volunteers, consultants, suppliers, contractors, customers or development partners, individually or in collusion with others.
The investigatory and disciplinary procedures contained in the document apply to volunteers and employees of Helping Our Future, defined as those members of staff who have a temporary or permanent contract of employment or as officially appointed volunteers with Helping Our Future.
In cases where non-employees are suspected of fraud or corruption, the default action is to report all such matters to the police, and to suspend the contractual relationship with the suspected perpetrator(s). Notwithstanding this, Helping Our Future may take any or all actions deemed to be necessary and appropriate to the circumstances involved.
The purpose of this document is to set out the Helping Our Future’s responsibilities with regard to fraud and corruption prevention, what to do if fraud or corruption is suspected and the action that will be taken by management.
2.0 Definitions of Fraud and Corruption
A dictionary definition of Fraud is ‘wrongful or criminal deception intended to result in financial or personal gain’. A dictionary definition of Corruption is ‘dishonest or fraudulent conduct by those in power, typically involving bribery’.
Fraud and Corruption in this strategy includes all and any forms of fraud, theft, deception, embezzlement, peculation, defalcation, scam, extortion, dishonesty, larceny, pilferage, misappropriation, corruption, misrepresentation, falsification, attempts to receive or pay bribes, or to launder criminal proceeds etc., and also includes all the offences as defined in the following legislation:
The Fraud Act 2006
This Act came into effect on 15 January 2007. The Act extended the definition of fraud by setting out clearer offences of fraud. The 3 main offences of fraud are:
Fraud by false representation
Fraud by failing to disclose information Fraud by abuse of position
The Act also created new and more specific fraudulent offences, namely: Obtaining services dishonestly with intent to avoid payment
Possessing, making and supplying articles for use in frauds Participating in a fraudulent business carried on by a sole trader
The Theft Act 1968
Historically fraud was defined as a criminal offence in this Act. Many of these provisions have been repealed by the 2006 Act; however there are still a number of provisions which remain in force, namely:
False accounting (S.17) :
Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another —
destroys, defaces, conceals or falsifies any account or any record or document made or required for any accounting purpose; or
in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular
Liability of company officers for certain offences (S.18):
Where an offence committed by a body corporate under S.17 of this Act is proved to have been committed with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence, and shall be liable to be proceeded against and punished accordingly.
Where the affairs of a body corporate are managed by its members, this section shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
False Statement by Company Directors (S.19):
Where an officer of a body corporate or unincorporated association (or person purporting to act as such), with intent to deceive members or creditors of the body corporate or association about its affairs, publishes or concurs in publishing a written statement or account which to his knowledge is or may be misleading, false or deceptive in a material particular, he shall on conviction on indictment be liable to imprisonment for a term not exceeding seven years.
Criminal Law Act 1977 (Conspiracy)
Under S.1, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, either —
will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement, or
would do so but for the existence of facts which render the commission of the offence or any of the offences impossible, he is guilty of conspiracy to commit the offence or offences in question.
Criminal Attempts Act 1981
A person is guilty of an offence of ‘attempt’ if they do an act which is more than merely preparatory to the commission of an offence. A person can be guilty of an offence of attempted fraud, even if the achievement of the intended fraud is impossible.
Further, a person can be guilty of an offence if he uses a computer to conduct an unauthorised act (Computer Misuse Act 1990)
Data Protection Act 1998 (DPA)
S.55 of the Act states that a person must not knowingly or recklessly, without the consent of the data controller—
obtain or disclose personal data or the information contained in personal data, or
procure the disclosure to another person of the information contained in personal data.
In certain situations, data may be obtained and/or disclosed. These situations as expressly provided for under the DPA and include if it:
was necessary for the purpose of preventing or detecting crime, or
was required or authorised by or under any enactment, by any rule of law or by the order of a court.
Identity Documents Act 2010
It is an offence for a person with an improper intention to have in their possession or under their control:
an identity document that is false and that person knows or believes to be false,
an identity document that was improperly obtained and that person knows or believes to have been improperly obtained, or
an identity document that relates to someone else. Proceeds of Crime Act 2010
There have recently been significant changes to the legislation concerning money laundering (The Proceeds of Crime Act 2002 and The Money Laundering Regulations 2007), which have broadened the definition of money laundering and increased the range of activities caught by the statutory framework. As a result, the new obligations now impact on areas of housing association’s business and require housing associations to establish internal procedures to prevent the use of their services for money laundering.
The primary offences related to money laundering are:
Concealing, disguising, converting, transferring or removing criminal property from the UK (S.327)
Entering into or becoming concerned in an arrangement which facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person (S.328)
Staff in the regulated sector failing to disclose knowledge or suspicion of money laundering to the money laundering reporting officer (MLRO) (S.330), or in the case of the MLRO, failing to report to the Serious Organise Crime Agency (S.331), or tipping off any person that such disclosure has been made (S.333A).
Bribery Act 2010
This legislation came into force on 1st July 2011, and is concerned with bribery, which is defined as giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so.
Four offences have been introduced:
Active Bribery – paying, offering or promising to give a bribe
Passive Bribery – requesting, agreeing to receive or accepting a bribe Bribery of a foreign public official
Failure of a commercial organisation to prevent bribery – a new offence, the only defence to which is ‘adequate procedures’
The Act does not prohibit corporate hospitality per se, and actions taken must be proportionate to the bribery risks faced by the organisation.
3.0 Fraud and Corruption Prevention Policy
Helping Our Future’s Fraud and Corruption Prevention Policy is based on a series of comprehensive and inter-related procedures. These cover:
Culture, Deterrence and Prevention
Helping Our Future’s Responsibilities
Board Members’ Responsibilities o Managers’ Responsibilities
Anti – Money Laundering Policy
Bribery Prevention Policy
Fraud and Corruption Response Plan
4.0 Culture, Deterrence and Prevention
Helping Our Future is determined that the culture of the organisation is one of honesty; where fraud and corruption is strongly opposed. Helping Our Future has strong executive support to counter fraud and corruption.
There is an expectation and requirement that all individuals and organisations associated in whatever way with Helping Our Future will act with integrity and that Board Members and staff at all levels will lead by example in these matters.
Helping Our Future’s staff are an important element in its stance on fraud and corruption and they are positively encouraged and expected to raise any concerns that they may have on these issues. This can be done in the knowledge that such concerns will be treated in confidence and investigated properly and fairly.
Members of the public and Board Members are encouraged to report concerns through any of the internal routes, or, if appropriate, through Helping Our Future’s Complaint’s Procedures.
The Executive Management Team (EMT) is expected to deal swiftly and firmly with those who defraud Helping Our Future or who are found to be corrupt. EMT must safeguard staff against any malicious or unfounded allegations. EMT are responsible for ensuring the proper application of procedures and will take disciplinary action against any staff or members who deliberately make a false accusation.
In the case of a proven offence, or a suspected offence of a serious nature, Helping Our Future will exercise its right to refer the matter to the police at the earliest possible opportunity.
4.7 Notwithstanding this, and following appropriate investigations as detailed in the Fraud and Corruption Response Plan, disciplinary action will be taken in accordance with Helping Our Future disciplinary procedures where a case has been proven against an employee.
4.8 Helping Our Future seeks to design a fraud and corruption policy, through the implication of new policies and systems and will revise existing ones to remove apparent weaknesses.
4.9 Helping Our Future’s Responsibilities
5.0 Helping Our Future is obliged to:
Develop and maintain effective controls to prevent fraud and corruption;
Carry out vigorous and prompt investigations if fraud and corruption occurs;
Take appropriate legal and/or disciplinary action against perpetrators of fraud and corruption;
Take disciplinary action against board members, managers and supervisors where their failures have contributed to the commissioning of fraud and corruption;
Recover any public money, including interest chargeable; and
Report all actual or attempted, supported or proven fraud and corruption to the Charity Commission.
Helping Our Future will fulfill this obligation.
5.1 The Chief Executive carries overall responsibility for the prevention of fraud and
corruption, and is liable to be called to account by the Board and the regulatory body for specific failures.
Operational responsibility is delegated to Helping Our Future’s Director of Financial Services. However, the day-to-day responsibilities fall directly on line management and may involve all board members and staff in Helping Our Future.
Helping Our Future shall maintain a Fraud Register, which will record all incidents of suspected fraud and corruption, investigations and outcomes. The register shall be open to inspection by the Charity Commission at any time and shall be reviewed at each meeting of Helping Our Future’s Audit Committee.
The Director of Financial Services will have responsibility for maintaining and updating the Fraud Register.
The Assistant Chief Executive (Resources) will report fraud or attempted fraud to the police for all frauds or attempted frauds and any actual or attempted fraud or corrupt act by a senior officer, no matter how low its value, must be reported immediately.
6.0 Board M embers’ Responsibilities
Board Members are required to operate within:
Board Standing Orders and Financial Regulations; and
The Charity Commission’s Code of Conduct.
The Board require Helping Our Future’s strategic risk management framework and associated risk map to be reviewed on an annual basis. Fraud and corruptions risks are considered as part of Helping Our Future’s strategic risk management arrangements.
The Internal Auditors are also required to include a review of risk management in their annual report to Board. This should include the extent to which anti-fraud and corruption culture exists and is developing throughout Helping Our Future.
7.0 M anagers Responsibilities
The day to day responsibility for the prevention and detection of fraud and corruption rests with line managers who are responsible for:
Identifying the risks to which systems, operations and procedures are exposed;
Developing and maintaining effective controls to prevent and detect fraud and corrupt, and ensuring that controls are being complied with;
Developing and maintaining an effective propriety checking process; and
Where possible, using analytical techniques to identify potential fraud and corruption. Proactive exercises should be undertaken in key areas of fraud and corruption risk or known system weaknesses.
Managers are charged with the operational responsibility for the implementation and maintenance of Helping Our Future’s risk management framework.
8.0 Staff Responsibilities
All staff, including managers, are responsible for:
Acting with propriety in the use of Helping Our Future’s resources and in the handling and use of Helping Our Futures’ funds whether they are involved with cash or payment systems, receipts or dealing with contractors, suppliers or customers; and
Reporting details immediately to the Director of Financial Services if they suspect or believe that there is evidence of irregular or improper behaviour or that a fraud or a corrupt act may have been committed. If the Director of Financial Services is implicated in a fraud or a corrupt act, then the matter should be reported to the Assistant Chief Executive (Resources) in the first instance.
In addition, if any member of staff suspects fraud on the part of the Chief Executive, an Assistant Chief Executive or Director of Financial Services he/she should also report the circumstances immediately to the Chair of the Audit Committee or to Helping Our Future’s Internal Auditor. Guidance for staff on how to report such matters is included in an “Employee Disclosure Policy” a copy of which is held in each Managers personnel policies and procedures file.
9.0 Anti-Money Laundering Policy
The implementation of risk-based systems and controls to mitigate against a business being used by criminals or terrorists to launder funds is a statutory requirement for those businesses in the ‘Regulated Sector’, including credit and financial institutions, auditors, accountants, legal professionals, estate agents etc, and for those housing associations which perform specific ‘regulated’ activities under the Consumer Credit Licence legislation or conduct estate agency work as defined in the Estate Agents Act 1979.
Notwithstanding the statutory requirements with respect to regulated activities, there are substantial money laundering risks associated with charity donations, and the everyday course of business in any charity management.
In addition, the Proceeds of Crime Act 2002 (POCA) and terrorism legalisation applies to every individual, and carries severe penalties.
The Director of Financial Services, or an individual nominated by him will be the Money Laundering Reporting Officer (MLRO). The MLRO will be responsible for receiving reports of suspicious activity from staff and where necessary, make suspicious activity reports to the Serious Organised Crime Agency (SOCA). Details of the MLRO will be made available on the internet.
The MLRO will also be responsible for ensuring that measures are put into practice to safeguard against Money Laundering, and to report on a regular basis to senior management.
All senior management and all staff who may potentially become involved in financial discussions or transactions in their day-to-day roles will be provided with anti-money laundering training.
Stringent checks must be carried out on the identity of customers in order to establish who the beneficial owner is in any transaction, i.e. to establish the origin of any finance and/or property. The level of verification needed will be dependent on the nature of the transaction, the client and the perceived risk of money laundering or terrorist financing.
Ongoing monitoring of donors will be conducted in order to allow money laundering risks to be assessed.
Any staff member who is suspicious of an activity must submit an internal report to the MLRO. After consideration of internal reports, the MLRO must consider whether it should report matters to the SOCA.
Donor identity and transaction records should be kept for a minimum of five years.
Risk assessment and management will be reviewed on an on-going basis in order to ensure that a dynamic and efficient process remains in force. These processes will be reviewed by senior management on a regular basis and reported to Audit Committee on an annual basis.
10.0 Bribery Prevention Policy
Helping Our Future is committed to ensuring that bribery will not be tolerated in its dealings with customers, suppliers, partners or any other parties with which it is involved.
Helping Our Future will carry out risk assessments in respect of the bribery risks it faces.
Wherever a potential risk of bribery is identified appropriate research will be undertaken into the individuals and companies Helping Our Future does business with; and in particular if a new business arrangement is being entered into.
Actions taken by Helping Our Future to reduce the risk of bribery will be proportionate to the size of the bribery risks it faces. Many organisations face little or no risk of bribery, especially if their business is undertaken primarily in the UK.
All necessary due diligence will be undertaken before engaging others to represent Helping Our Future in business dealings.
The Executive Management Team at Helping Our Future will be active in making sure that Helping Our Future staff, and the people who they do business with, understand that Helping Our Future does not tolerate bribery.
The anti-bribery values on which Helping Our Future does business will be communicated to staff as part of the induction process for new staff, and as part of the established fraud and corruption training and updating process. They will also be communicated to others who perform services on behalf of Helping Our Future, to enhance awareness of and help deter bribery in its business dealings.
Helping Our Future will continue to monitor and periodically review the bribery risks it faces, and effectiveness of procedures to mitigate the bribery risks.
All Helping Our Future staff to adhere to standards of conduct set in the Helping Our Future Code of Conduct (Employees) Policy to prevent bribery.
11.1 Whistleblowing means the confidential raising of problems within an organisation and not the popular use of the term relating to leaking information to the media. Helping Our Future recognises that in certain circumstances staff or tenants will need or prefer to come forward on a confidential basis. It is never easy to report a concern, particularly one that may relate to fraud or corruption by a fellow employee, long- standing contractor or service user. Helping Our Future has a whistleblowing policy which is available on the internet.
12.0 Fraud & Corruption Response Plan
Helping Our Future has prepared a Fraud & Corruption Response Plan (see Appendix 1) which should act as a checklist of actions and a guide to follow in the event that fraud or corruption is suspected. It covers:
Notifying suspected fraud or corruption;
The investigation process;
Liaison with police and external audit;
Initiation of recovery action;
Reporting process; and
Communication with the Homes and Communities Agency.
In the event of fraud and corruption occurring as a result of a weakness in controls then these controls will be updated to mitigate the risk of any further occurrence of fraudulent activity.
13.0 Disciplinary Action
In the case of proven fraud and corruption, or suspected fraud and corruption of a serious nature, Helping Our Future reserves the right to refer the matter to the police at the earliest possible opportunity.
Notwithstanding this, and following appropriate investigations as detailed in the Fraud and Corruption Response Plan, disciplinary action will be taken in accordance with Helping Our Future disciplinary procedures where a case has been proven against an employee.
Helping Our Future recognises that the continuing success of its Fraud and Corruption Prevention Policy and its general credibility will depend largely on the effectiveness of programmed training and responsiveness of staff throughout the organisation.
In order to facilitate this Helping Our Future supports induction training for new Board Members and staff and ongoing refresher courses, particularly for those involved in internal control systems.
Staff awareness will also be promoted by communicating all changes in policy immediately and reporting to staff the outcomes of investigations into fraud and corruption.
15.0 Personal Conduct
15.1 As stewards of public funds all employees must have, and be seen to have, high standards of honesty, propriety and personal integrity. Employees must report any potential conflict of interest (where the interest of Helping Our Future and a personal / business interest of an employee conflict) to their Director and the relevant Assistant Chief Executive. Employees must not accept gifts, hospitality or benefits of any kind from a third party which might be seen to compromise their personal judgement and integrity. Further guidance on all aspects of personal conduct and the acceptance of gifts and hospitality is contained in current procedures and, specifically, the Terms and Conditions of Service, the Code of Conduct and the NHF Code of Conduct.
16.0 Other Policies and Procedures
The Fraud and Corruption Prevention Policy does not replace any of Helping Our Future’s existing policies, it is intended to sit alongside existing policies. It may be that once an investigation has been undertaken, action under other processes may be more suitable. Other policies and procedures that might be invoked include:
Equality and Diversity Policy;
Health and Safety Policy;
Equal Opportunities Policy;
Employee Complaints Policy;
Board Member Code of Conduct;
Staff Code of Conduct.
17.0 Distribution and Publicity
17.1 helping Our Futures will ensure that this policy is made available to every employee and Board Member and is discussed at his or her induction/training. It will be freely available on the Helping Our Future’s internet and the website, making it available to contractors and other relevant individuals.
Procedures have been developed that provide guidance on:
How to raise concerns internally and externally;
The process for responding to concerns;
How to seek independent advice;
The role of trade unions and other relevant individuals and bodies.
19.0 Sharing Information and Data Protection
Information in relation to the prevention and detection of crimes is excluded from the Data Protection Act 1998; however Helping Our Future will take particular circumstances into account to ensure compliance with the Data Protection Act 1998 where appropriate. Guidance in relation to the Data Protection Act can be found on the internet.
Helping Our Future is committed to working with other agencies in the prevention and detection of fraud and corruption and will share data where necessary and appropriate, for example with the Department of Work and Pensions, the Audit Commission etc.
Helping Our Future will share information internally and with other government agencies where necessary and appropriate and in accordance with the Data Sharing Protocol and s.115 of the Crime and Disorder Act 1998.
Helping Our Future will participate in national data sharing practices e.g. the National Fraud Initiative to enable proactive detection of fraud and corruption where necessary and appropriate.
Helping Our Future views fraud, corruption and dishonesty very seriously. All instances will be investigated rigorously and promptly and appropriate action will be taken.
Further advice may be obtained from the Director of Financial Services.
21.0 Review and Revision
21.1 This policy and the associated procedures will be reviewed bi-annually and following any serious case of fraud and corruption or any significant change in regulation. Revision will be dependent on the outcome of the review.