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.