Policy Number: 1.60.8
Contact Officer: Director, Assurance and Risk Management Services
Date approved by Senate: 01/12/2005
Date for next review: 01/12/2008

Overview

1.  Commitment to Fraud and Corruption Management

1.1 The Australian Standard on Corporate Governance – Fraud and Corruption Control (AS8001:2003) sets a basis for best practice for fraud and corruption management. An integrated management approach for effective fraud and corruption control has been developed by the Crime and Misconduct Commission (CMC) in its “Fraud and corruption control: guidelines for best practice”.

1.2  The University of Queensland recognizes that fraud and corruption management is an integral part of good governance and management practice.  The University has a zero-tolerance stance on fraud and corruption and is committed to maintaining an organisational culture which will ensure that effective prevention of fraud and corruption is an integral part of all university activities, consistent with its Code of Conduct and the law.

2.  Objectives

2.1  In support of the achievement of strategic and operational goals, the objective of the University’s fraud and corruption management program is to provide a framework which will minimize fraud and corruption.  It will:

• ensure executive management’s commitment to its responsibility for identifying risk exposures to corrupt and fraudulent activities and for establishing controls and procedures for prevention and detection of such activities;
• reinforce a zero-tolerance stance on corrupt conduct, fraudulent activities and maladministration;
• ensure that all officers, management and staff are aware of their responsibilities for ethical conduct in relation to themselves and those for whom they have organisational responsibility;
• protect the University’s assets, interests and reputation;
• safeguard the reputation of officers, management and staff;
• provide for the reporting of any instance of fraud, corrupt conduct or maladministration both internally and externally, where required;
• ensure that all suspected corrupt and fraudulent activity is dealt with appropriately; and
• ensure that regular re-assessment of the risks of fraud and corruption is undertaken.

3. Concepts

3.1  Key definitions

Corruption is defined by the CMC as behaviour that may involve fraud, theft, misuse of position or authority or other acts that are unacceptable to an organisation and which may cause loss to the organisation, its clients or the general community. It may also include such elements as breaches of trust and confidentiality. The behaviour need not necessarily be criminal. The Australian Standard on Fraud and Corruption Control defines corruption as dishonest activity in which a director, executive, manager, employee or contractor of an entity acts contrary to the interests of the entity and abuses their position of trust in order to achieve some personal gain or advantage for themself or for another person or entity.

Fraud can be seen as a major subset of corruption and is a deliberate, intentional and premeditated dishonest act or omission acted out for the purpose of deceiving to gain advantage from a position of trust or authority. It includes acts such as theft, making false statements or representations, evasion, manipulation of information, criminal deception and abuse of property or time. The Australian Standard on Fraud and Corruption Control defines fraud as dishonest activity causing actual or potential financial loss to any person or entity including theft of moneys or other property by employees or persons external to the entity and whether or not deception is used at the time, immediately before or immediately following the activity. This also includes the deliberate falsification, concealment, destruction or use of falsified documentation used or intended for use for a normal business purpose or the improper use of information or position.

Maladministration is defined in the Whistleblowers Protection Act 1994 as an administrative action that is unlawful, arbitrary, unjust, oppressive, improperly discriminatory or taken for an improper purpose and which substantially and adversely affects someone’s interests.

Official Misconduct is defined in the Crime and Misconduct Act 2001 and includes the performance of a dishonest (not impartial) act, breach of trust or misuse of information or material acquired. Further, where proved, it can be a criminal offence or treated as a disciplinary breach providing reasonable grounds for termination of services.

Description

4.  Responsibility and Framework

4.1  This policy applies to all members, management and staff of the University.

4.2  The Vice-Chancellor and the executive management team are responsible for the implementation of this policy through an appropriate fraud and corruption management framework and an effective internal control structure.  In accordance with the CMC’s “Fraud and corruption control:  Guidelines for best practice”, the framework will consist of the following elements:

• University-wide integrated policy
• Risk assessment
• Internal controls
• Internal reporting
• External reporting
• Public interest disclosures
• Investigation
• Code of Conduct
• Staff education and awareness
• Client and community awareness

4.3  Executive Management – need to be committed to the pro-active prevention of corrupt and fraudulent conduct in a systematic way in order to enhance the operation and reputation of the University. They should ensure there are mechanisms in place within their area of control to:

• identify and assess the risk of fraud and corruption;
• promote staff awareness of ethical behaviour;
• educate staff about fraud and corruption prevention and detection; and
• report to Senate on the effectiveness of the fraud and corruption management program.

The Vice-Chancellor is responsible for referring to or notifying relevant external agencies of fraudulent and corrupt behaviour, as required by law. 

4.4  Senior and Other Management – should ensure that they:

• display an appropriate attitude towards compliance with laws, rules and regulations;
• are aware of indicators/symptoms of fraudulent and corrupt conduct, and other wrongful acts and respond appropriately to such indicators; and
• establish and maintain good internal controls that provide for the security and accountability of University resources and prevent/reduce the opportunity for inappropriate behaviour.

4.5  All staff – have a responsibility to report corrupt and fraudulent activity (Code of Conduct Section 6.7). Any staff member who suspects such activity should immediately notify their supervisor or those responsible for investigations such as Assurance and Risk Management Services. In situations where the supervisor is suspected of involvement in corrupt and fraudulent activity, the matter should be notified to the next highest level of supervision or the Vice-Chancellor or the Secretary and Registrar.

4.6  Director, Assurance and Risk Management Services – is responsible for:

• supporting the Vice-Chancellor’s Executive in carrying out its responsibilities for  fraud and corruption management;
• provision of on-going guidance to all levels of management on the implementation of fraud and corruption management strategies;
• developing and implementing educational programs on ethics, fraud and corruption prevention and detection and related issues;
• performance of periodic reviews of internal control structures; and
• investigation of allegations of fraud and corruption.

5.  Fraud and Corruption Management Process

5.1  The University’s Fraud and Corruption Management process will be comprised of the components/elements of the CMC’s “Fraud and corruption control:  guidelines for best practice”.

5.2  Risk Assessment

Identification, assessment and management of the risk of fraud and corruption are to be an integral part of the University’s Enterprise Risk Management process, as set out in the Enterprise Risk Management policy 1.80.1.

5.3  Internal Controls

The Vice-Chancellor is ultimately responsible for the establishment of a cost-effective internal control structure for the University (Financial Management Standard 1997). Financial, administrative, information systems and academic internal controls are all essential requirements for fraud and corruption prevention. Individual managers are responsible for daily operations and for maintaining cost-effective internal control structures within their organisational responsibility. Review of the operation of internal controls is the responsibility of Assurance and Risk Management Services.

5.4  Internal Reporting

Reporting by staff members plays a crucial role in controlling fraud and corruption.  An internal reporting system, whereby staff are encouraged to report fraud and corruption, is to be in place.  The reporting system should be clear about:

• how to make a report;
• to whom reports can be made; and
• confidentiality and protection.

A proper record needs to be kept of reports made and how they are addressed.

5.5  External Reporting

Various legislation sets out the requirements for agencies such as the University to report matters of fraud and corruption to the CMC, Queensland Police Service and Queensland Audit Office.  It may serve a worthwhile purpose, in some cases, to report also to the Ombudsman.  The University is to have in place a mechanism for assessing fraud and corruption matters and determining its obligations for reporting them to relevant external agencies.

5.6  Public Interest Disclosures

The University has in place a Whistleblowers’ Protection Management Policy 1.60.3 which sets out how and to whom to make a disclosure.  It provides protection for individuals making a disclosure and natural justice for those who are the subject of disclosures.

All public interest disclosures made by University staff are to be managed in accordance with this policy.

5.7  Investigation

The University provides resources, where necessary, and has policies and procedures in place for the conduct of investigations of various types.  For matters which fall generally under the description of fraud and corruption, Assurance and Risk Management Services management and staff are trained to conduct investigations.

Depending on the type of expertise required, collaboration with such specialist areas as Information Technology Services and Human Resources Division takes place, where necessary.  As CMC liaison officer, the Secretary and Registrar is responsible for determining any referral of fraud and corruption allegations or matters to the CMC and other external bodies.

5.8  Code of Conduct

The UQ Code of Conduct, which applies to all officers and employees of the University, is a reflection of the University’s commitment to create an ethos and environment in which ethical conduct is expected, encouraged, supported and achieved. The Code of Conduct provides that under the ethical principle of integrity, the University, its officers and employees are placed in a position of trust.  They manage University resources, have access to University information and make decisions that affect the interests of others. By conducting themselves with the highest standards of honesty, fairness and propriety, officers and staff enhance public confidence in the integrity of the University.

5.9 Staff Education and Awareness

Matters which are the intention of this policy – ethics, fraud and corruption prevention and detection, and reporting obligations of individual staff members should be embedded into the University’s ongoing staff development, training and awareness programs.

5.10  Client and Community Awareness

To maintain public trust, the community must be confident that the University and its officers behave ethically and honestly.  The University’s marketing program should communicate to the community that it not only provides services of the highest standard, but also its Code of Conduct, policies and procedures and quality assurance mechanisms are such that the University and its officers act ethically and honestly, are good public citizens and are socially-responsible.

6.  Related Policies

6.1 Other policies which operate in conjunction with the fraud and corruption management process, supporting the same governance and management objectives, are listed in the Handbook of University Policies and Procedures under the headings of:

• 1.40 Quality Assurance Mechanisms;
• 1.50 Ethical Conduct in the Workplace;
• 1.60 Administrative Accountability;
• 1.70 Equity; and
• 1.80 Enterprise Risk Management.