Fraud Response Plan 1. Introduction 1.1 This Fraud Response Plan has been prepared as a guide to staff and management with the objective of ensuring that timely and effective action is taken where fraud has been detected or is suspected. 1.2 The Fraud Response Plan should be read in conjunction with the following Board documents: Anti-Fraud Policy; Whistleblowing Policy; and Code of Conduct for Staff. 1.3 The SELB has a zero tolerance towards fraud and has adopted the policy that all allegations of fraud, whether internal or external will be investigated. 2. Initial Reporting and Assessment of Fraud Initial Reporting 2.1 All staff should report any suspicions of fraud to their line manager who should immediately inform their Head of Department. 2.2 If a member of staff feels unable, for whatever reason, to raise a concern about suspected fraud with their line manager, then they may report their suspicions directly to their Head of Department. The matter can also be reported in confidence under the provisions of the Public Interest Disclosure (Northern Ireland) Order 1998. The Board s Whistleblowing Policy details a number of officers who can be contacted by telephone or in writing. Reasonable Suspicion 2.3 When a report of suspected fraud is received, the Head of Department must, where possible, determine if there is reasonable suspicion that a fraud has occurred. This exploration of the facts must be carried out discreetly and quickly. The preferred timescale for completion should be within 24 hours of the suspicion being raised. Evidence is Preserved and Protected 2.4 From the first time suspicions are raised it is important that evidence is preserved and protected to ensure there is no loss of evidence, which may be essential for subsequent disciplinary action or prosecution. Management should take steps to ensure that all original documentation and/or data stored electronically is preserved in a safe place for further investigation. Wherever SELB - 1 - February 2012
possible the gathering of evidence relevant to the case, prior to reporting to the police, should be carried out by staff accredited in investigative practice and who are familiar with the Police & Criminal Evidence (Northern Ireland) order 1989 (as amended) (PACE) and Rules of Evidence. 2.5 Lack of knowledge or expertise may lead to insufficient or unusable evidence being collected. The Head of Internal Audit should be consulted at an early stage for advice and guidance. Completion of Initial Assessment of Suspected Fraud 2.6 If initial examination confirms the suspicion that a fraud has been perpetrated, then the Head of Department after consultation with Human Resources may suspend the officer involved, pending the outcome of the investigation. Suspension itself does not imply guilt; it is another safeguard to prevent the removal or destruction of evidence. 2.7 Any person(s) suspected of being involved in a fraud must not be interviewed at this stage as this may jeopardise any future disciplinary action or criminal prosecution. 2.8 Where the Head of Department has determined there is reasonable suspicion that a fraud has occurred, they are responsible for reporting details to the Head of Internal Audit. Information that should be reported would include a brief description of the suspected fraud, means of discovery, approximate value, and the name(s) of suspected perpetrator(s). 3. Purpose of Internal Investigation 3.1 The purpose of the internal investigation is to: a. establish whether there is evidence that a fraud has occurred; b. collect sufficient evidence to support any referral to the police; c. provide an evidential pack to support any possible disciplinary or legal action required in accordance with that set out in the Memorandum of Understanding signed between the Northern Ireland Public Sector and the Police Service of Northern Ireland (PSNI). 4. Conducting the Internal Investigation Fraud Investigation Oversight Group 4.1 The Fraud Investigation Oversight Group (FIOG) will be responsible for the internal investigation. This Group which will be chaired by the relevant Head of Department (or their representative) and will also include representatives from Human Resources and Internal Audit. Depending on the nature of the suspected fraud other staff may also be drafted into the Group. SELB - 2 - February 2012
4.2 The FIOG will consider the facts presented and, should an investigation be required they will set out details required which will include:- a) Facts to be established; b) Evidence required; c) Interview plan; d) Relevant timeframes; and e) Evaluation and analysis. 4.3 The FIOG will also wish to confirm that: a) All aspects of the suspected officer s work may be investigated, not just the area where the fraud was discovered; b) Consideration will be given to investigating earlier periods of the suspected officer s employment; c) Control weaknesses discovered during the investigation will be notified to management for immediate remedial action; and d) The extent, if any, of supervisory failures may be examined and reported. Fraud Investigation Team 4.4 The FIOG will establish a Fraud Investigation Team. The exact composition of the team will be dependent on the nature of the suspected fraud but will typically include a manager from the Department concerned who will be the Fraud Investigation Leader and representation from Internal Audit, Human Resources and if required suitable staff from other business areas. At least one of those involved should be familiar with fraud investigation techniques and be aware of the requirements of the Police and Criminal Evidence (PACE) Act 1989. 4.5 The Fraud Investigation Team is responsible for gathering all relevant evidence that may relate to the suspected fraud. The progress and nature of the investigation will be determined by the scope, value and nature of the suspected fraud. 4.6 The Head of the Investigation Team and the Human Resources representative will carry out any interviews with staff that may be required during the investigation. These interviews will be conducted under properly controlled conditions to ensure any statement taken is legally compliant with the PACE Codes of Practice and that the use of this statement as evidence in a court case will not be rejected as inadmissible. 4.7 The Internal Audit representative on the team will provide advice and guidance during the course of the investigation concerning technical/financial issues and provide any financial analysis that may be required during the course of the investigation. SELB - 3 - February 2012
4.8 The Head of the Investigation Team will provide a report to the FIOG detailing the findings of the investigation. Evidential Pack 4.9 Where it is considered that there are sufficient grounds for a formal complaint of alleged fraud to be reported to the police, this will be done so in the format detailed in the evidential pack set out in the Memorandum of Understanding signed between the Northern Ireland Public Sector and the Police Service of Northern Ireland (PSNI). The FIOG are responsible for ensuring all relevant information that may relate to the suspected fraud for inclusion in the Evidential Pack. 4.10 Where the case does not provide sufficient grounds for a formal complaint of alleged fraud and investigation by the police, the FIOG will outline the reasons in a report. 5. Reporting to the Police 5.1 In line with the Board s Anti-Fraud Policy, the police will be consulted in all cases of suspected fraud. On the 30 October 2006 a Memorandum of Understanding between the Northern Ireland Public Sector and the Police Service of Northern Ireland (PSNI) was signed. The document was revised and reissued in September 2010. This memorandum was designed to facilitate the prompt and effective processing of investigations in cases of suspected fraud. 5.2 The PSNI encourage organisations to consult with them at an early stage of an investigation and initial reports to the police, or requests for advice and guidance, can be made orally or in writing. Formal complaints should be made in writing and supported by evidential information. 5.3 The Acceptance Criteria as set out in the Memorandum of Understanding must be met before a case is formally referred to the PSNI. The decision to accept a case for investigation rests fully with the PSNI who will provide their decision in writing. Where it is decided not to proceed, the Board will seek the reasons for the decision. Acceptance Criteria 5.4 The Acceptance Criteria are as follows: a) It must be established that there are reasonable grounds to believe that a criminal offence has been committed; b) Deliberate criminal intent needs to be clearly defined. The fraud needs to be more than an error or omission; c) The allegations should concern recent events and should not have become stale by reason of age. Incidents which are over two years old before discovery need to be judged individually on their merits, including availability of documentary evidence and the reliability of witness evidence; SELB - 4 - February 2012
d) To comply with the rules governing disclosure, the Board will identify and preserve all original documents and other exhibits relating to any intended complaint; e) The Board should be prepared to supply all original relevant documents and exhibits to the police if an investigation is accepted and commenced. Such evidence material should be securely held, in accordance with PACE provisions, before formal handover to the PSNI. Evidential Packages for PSNI 5.5 Evidential packages provided to the PSNI should contain a detailed summary of all relevant information surrounding the allegations made. This should include the nature the allegations against the suspect, including the full name, address and date of birth of the suspect. The package should also include: a) All available details of any other parties suspected of involvement in the alleged fraud, including the reasons for the suspicions; b) A comprehensive report outlining the nature of the allegations including values and relevant dates; c) A full description of any investigations already undertaken by the Board or anyone acting on its behalf; d) Copies of all relevant documents each individually numbered and identified in the summary; e) Names, Dates of Birth, addresses and any other contact details of all witnesses identified at the time of reporting to the police, including copies of any statements; f) Copies of all statements obtained from witnesses and suspects. (Where more than three witness statements are provided, it is essential to list them on a schedule.) The Schedule should:- Identify each witness Outline, in brief, the evidence in chief each witness has or will provide Detail the Exhibits each witness has or will produce. Under no circumstances should original documents be forwarded at referral stage. In the event that the case is accepted by the PSNI for investigation arrangements will be made to obtain such documentation where required. g) Any police reference numbers, which may already apply to any part of the case; and h) A name and contact point within the Board. 5.6 The Public Prosecution Service will make the final decision as to whether or not a criminal prosecution will be undertaken. SELB - 5 - February 2012
6. External Reporting 6.1 The Board is required to report to the Comptroller and Auditor General all frauds including attempted frauds. A report will also be made to the Head of Internal Audit in the Department of Education (DE) who will inform other Sponsoring Departments if required. 6.2 The details to be reported are included in the Memorandum of Guidance Treatment of Losses and Special Payments. Incidents should be reported when an initial investigation confirms a suspected fraud. 7. Disciplinary Action 7.1 At the completion of the internal investigation, the Head of Department in consultation with the Head of Human Resources will decide what disciplinary action should be taken. Where a police investigation is to be conducted, the Board may still proceed with the internal disciplinary action. The role of supervisors and the extent to which they were negligent in discharging their duties will also be assessed to determine if this contributed to circumstances that allowed the fraud to be perpetrated. 7.2 It should be noted that the measure of proof used for a criminal conviction is beyond reasonable doubt whereas for internal disciplinary action, it is more based on the balance of probabilities. It is possible therefore for an officer to be found innocent of criminal charges by a court of law (or for the police to decide not to prosecute) but for that officer to still face a disciplinary penalty under the internal disciplinary process. 8. Recovery of Losses 8.1 The recovery of losses should be an objective of any fraud investigation. To this end the quantification of losses is important. Repayment of losses should be sought in all cases. Where necessary, legal advice should be sought on the most effective actions to secure recovery of losses. 9. Follow-up Action 9.1 Following on from any fraud investigation, management shall review the systems in operation. The review should examine the current fraud risk arrangements to determine if there is any action needed to strengthen controls and therefore reduce the risk of another fraud in future. Internal Audit is available to provide assistance in this exercise. 9.2 Where weaknesses are established which may apply to other services, these should be disseminated to the other Heads of Department for circulation to their managers and staff. 9.3 The Audit Committee will be briefed of the circumstances concerning the fraud. SELB - 6 - February 2012
10. Public Interest Disclosure Whistleblowing 10.1 The Public Interest Disclosure (NI) Order 1998 gives legal protection to employees against being dismissed or penalised by their employers as a result of publicly disclosing certain serious concerns provided that they are disclosed under procedures identified in the Order. 10.2 Normally, any concern about a workplace situation should be raised with the line manager or Head of Branch, however it is recognised that because of the seriousness and sensitivity of some issues, together with the knowledge of who may be involved in the suspected wrong doing, this may be difficult. 10.3 For further information in relation to Public Interest Disclosure please see the SELB Whistleblowing Policy which provides contact details for Board staff. 11. Dealing with Enquiries from the Media and Others 11.1 Staff must not discuss any aspect of an investigation with the media or others as this may seriously jeopardise any future disciplinary action or criminal prosecution. 11.2 All enquiries from media sources about suspected or actual cases of fraud must be referred to the Communications Officer who will consult with the Head of Department before taking the matter further. 11.3 Staff must not communicate any details of the fraud to any person not officially involved in the investigation. 11.4 If the case is likely to attract media attention the Communications Officer should be briefed by the Head of Department and the Human Resources Manager to determine precisely what information can be released. 11.5 The Communications Officer must retain a record of what information was released and to whom. SELB - 7 - February 2012