This page provides staff guidance on the following four issues that are all linked to criminal behaviour against the Council.
For staff the onus to act within accordance to the Council’s policies in regards these issues, is linked to the responsibilities and standards applied by the Staff Code of Conduct.
Fraud and Corruption
As unpalatable as it may seem, statistics support that some staff will consider dishonest action against their employer. The purpose of this site is to make you aware of actions that could be considered as wrong, and what may happen. It is also likely that customers will attempt to de-fraud the Council, just as other bodies attract attempts. We hope the information contained here will make you aware of the risks within your area of work, and what to do if you identify something wrong.
The perception of fraud being a victimless crime with little chance of being caught means that fraudsters will increasingly rationalise the crime they’re committing. Unlike stealing from an individual there is little perception by the fraudster of loss to the Authority. This makes it an extremely attractive option to some.
The current economic climate is also a factor in creating more situations for individuals to be desperate for other sources of income.
Generally every organisation is at risk of fraud, and Mole Valley is no different.
Fraud definition
Fraud is divided into three categories
- The first is Fraud by false representation – that is telling us something that is untrue. This can be any form, for example letter, form, email, telephone call or face to face conversation
- Secondly is fraud by wrongfully failing to disclose information – failing to tell us something that they knew they should have done
- Finally for our purposes is Fraud by abuse of power – this is where someone in position of trust does something secretly that they shouldn’t have done, or fails to act, or omits to tell something they should have. Generally most Council employees would be seen as being in a position of trust
For all of these categories there needs to be the intent for the individual or someone else to make a gain that they would not have legitimately been entitled to (this does not need to be financial), or the council to make a loss.
They also need to know what they were doing was wrong (in other words been dishonest)
Fraud can be committed by customers and staff. At Mole Valley frauds have been identified in the areas of Benefits, Council Tax and Housing, but can affect any service the council provides. See examples of the types of fraud that could be attempted against the Council.
How to refer Fraud
We have a dedicated fraud investigation team and we will investigate allegations and taken legal action where necessary and appropriate. If you have a suspicion please refer to the team. Referrals are treated in strict confidence.
Alternatively email to the generic email address investigations@molevalley.gov.uk
We will review referrals, investigate where necessary. Investigations can include surveillance, recorded interviews, and obtaining individuals bank statements. If an offence is identified legal action may be taken.
Failure to refer a fraud that you know about, or taking fraudulent action yourself could result in an investigation.
Cost of fraud
The cost of fraud should not just be measured in financial terms; we must also consider the impact on the Council’s integrity and the internal impact on sections and their ability to provide a service.
Fraud and corruption can cost the Council tens of thousands of pounds by lost revenue – Despite some good work to date across both public and private sector organisations, in the UK alone an estimated £16 billion upwards is being lost through fraud every year.
As representative for the community it is important that the Council’s integrity is above reproach. Staff fraud can cause unquantifiable reputational damage to the image of the Council. Bad publicity caused by the belief of fraud and corruption affects the relationship the Council and individual members of staff will have with their customers. One piece of bad publicity could undo numerous examples of good work. Any fraud that involves customer data is always damaging, as it destroys customer confidence in providing information. Example: benefit staff member using customer bank account details to facilitate a fraud. Future benefit customers would be unwilling to provide details required by the section to correctly process claims.
Consequences
If either undertaking fraudulent action or failing to refer when you know or suspect an offence is being committed could result in the following
- Disciplinary record
- Dismissal
- Prosecution
- Recovery of loss
- Named and shamed
The Council has an Anti-Fraud and Anti-Corruption Policy and a Prosecution and Sanction Policy.
Whistleblowing
Whistleblowing is the term given to the process whereby employees can raise any concerns about the activities of their organisation which they believe to be either legally or ethically questionable.
Government Legislation protects individuals making disclosures in the public interest in certain circumstances and to allow individuals to claim unlimited compensation for any victimisation suffered as a result of the disclosure. It only applies to employees, temporary and contractor’s staff
The Council has a Whistleblowing Policy which covers all staff.
What is covered under Whistleblowing
The Act applies to people at work raising genuine concerns about breaches of civil, criminal, regulatory or administrative law, miscarriages of justice, dangers to health, safety and the environment and the cover up of any malpractice.
Examples of malpractice include
- Danger in workplace
- Fraud
- Bribes
- Breach of statutory codes or Council policy
- Failure to comply with professional standards
- Actions likely to cause physical harm
- Harm to the environment
- Abuse of position
- Unfair discrimination in council’s employment or services
- Abuse of clients
- Failure to take steps to report / rectify situation which is likely to give rise to significant avoidable cost or loss of income
Difference between Whistleblowing, staff grievance and customer complaint.
Whistleblowing does not cover a staff grievance or complaint in relation to a work related situation that is personal to that staff member. Whistleblowing relates to an issue that has wider impact on the council or community as a whole. Complaints by customers are dealt with under the Council’s customer complaint policy.
See the Grievance / Whistleblowing flowchart which shows the difference between whistleblowing, grievance and complaint, and shows the route to follow to report these incidents.
How do you refer a suspicion?
- Refer to your line manager first
- If not resolved refer to a senior Manager.
- If still unresolved refer to an external organisation
See Whistleblowing Referral Flowchart for further guidance.
An allegation made under Whistleblowing will normally ensure that the individual is protected from reprisals. However in order to qualify for the protection is it important that you follow the referral process and notify your manager or other senior officer first. If you decide to blow the whistle outside the Council , you must have good reason for doing so, otherwise you may not be entitled to protection. This could b that you have referred internally but matter was not resolved, you suspect senior officers to be involved, or the issue is so serious that it would be justified to blow the whistle externally.
What is the protection?
The Council’s Whistleblowing policy does the following three things:
- Encourage staff and members to feel confidant to raise concerns
- Provide avenues to raise issue in confidence
- Provide protection from recriminations
What happens when you make a referral
When you make a referral the manager who receives such a report, will review the information received and decide whether the matter should be treated as a whistleblowing allegation, and assess how serious and urgent the risk is. The Manager is able to carry basic record checks, and hold informal discussions with other officers, in order to ascertain whether the allegation is founded.
If the information is viewed as relatively low risk, and could be simply followed up during a routine audit, or a change to procedure, the matter will not require escalation. The Manager must record the allegation, the agreed outcome, and retain a record of action for scrutiny if further allegations received. If the allegation can be best dealt with under a different policy, the Manager should advise the individual making the referral of this, and either direct the referral to the responsible person for that policy, or deal with matter under that Policy
If the allegation is viewed as serious enough and satisfies criteria to be treated as whistleblowing referral, the Manager should cease making any further enquires and must not carry out an investigation. The manager must immediately report details of the suspected irregularity to the Section 151 Officer who will convene a meeting to include the appropriate officers required to action the investigation. The Section 151 Officer will decide whether the allegation requires further investigation and direct the appropriate officer to conduct this investigation, or refer to outside agencies (such as the Police or Auditors).
Bribery
Bribery is a criminal offence and the Council has a responsibility to ensure staff are aware of their responsibilities not to offer or accept bribes, and to report incidents immediately. The Council has an Anti-Bribery Policy. The offence of Bribery is covered in the Bribery Act 2010.
The Bribery Act identifies two key offences that may impact you as a council employee
1. To offer, promise or give a financial or other advantage to another person to induce that person to perform improperly a relevant function or activity.
or
2. To request, accept or agree to accept a financial or other advantage to perform a relevant function improperly.
It is most likely that staff are at risk of being bribed. Often a first approach is not recognised as an attempt to bribe. Someone could attempt to friend or offer to do a favour. An officer may be asked to do a small task and then a relationship may be established , whether knowingly or unknowingly.
A key concept in bribery is improper performance. This is relatively broad, but ultimately most people would recognise a scenario where they are being asked to do something against normal practices and procedure, for the benefit of another.
Bribery is often linked to Serious Organised Crime as an attempt to bribe normally leads to a relationship where the illegal activity is ongoing for a period of time.
There is also a fine distinction between accepting gifts and hospitality and being accused of accepting a bribe. Therefore it always advisable to report any offer of gifts to your senior officer, and following the Council’s guidance on this matter..
More information about Bribery Advice.
Penalties for bribery
Individuals convicted of one of the first three offences (“the primary offences”) are liable to a maximum of 10 years’ imprisonment and/or an unlimited fine while companies or other bodies convicted of these offences or of the corporate offence face unlimited fines. Commercial organisations have the added risk of reputational damage and The Public Contracts Regulations 2006 exclude businesses from competing for public sector contracts where they have been convicted of bribery.
How to refer bribery suspicions
Refer suspicions of bribery or serious organised crime to the fraud team, alternatively discus with your line manager or any member of Senior Management Team.
Anti-Money Laundering
Money Laundering is the popular term for the way criminals clean money obtained from illegal methods. It is an important issue as it is linked to a number of other criminal activities. Terrorists require funds to plan and carry out attacks, and organised crime use to fund people trafficking, drug distribution and prostitution. It has an estimated value in the UK alone of £90billion.
Recent government legislation requires all organisations to have procedures in place to identify and report suspicions and also raise awareness amongst staff.
However, there is still no need to panic. The risk to the council is relatively low compared to other financial based organisation. All you need to do if you are suspicious is report your concern to the Council’s Money Laundering Reporting Officer. He will consider the facts and if appropriate make a referral the National Crime Agency. You can view the Anti-Money Laundering Policy.
It is important that you do not tell the subject of the suspicion that a money laundering report has been made. This could be viewed as aiding a criminal and make you liable for prosecution. Sometime it may be difficult to explain why a transaction has not been processed but it is imperative not to divulge. After a period of the time the National Crime Agency will advise whether any relevant transactions can proceed
See Money Laundering Definition and Examples for further definition and example of money laundering
What To do:
Report your suspicion to the Council’s Money Laundering Reporting Officer (MLRO) or an MLRO Deputy by completing the form money laundering referral form. Email the completed form to one of MLRO contacts. You will satisfy your reporting obligations by making an internal report to the MLRO, and would not then be liable for criminal action
What happens next
- MLRO assesses referral and decides whether OK or needs reporting
- reports to National Crime Agency (NCA) using online service
- NCA cross reference against intelligence
- IF no response within 5 days proceed with action
Follow the Money Laundering Flow chart to see how to refer and what happens
What are the sanctions
Proceeds of Crime Act 2002 – An individual could commit offence if:
- Actively involved in money laundering
- In possession of criminal proceeds, if knew or suspect
- Assist – provide advice or service which helps acquire , hide, hold or move “dirty money” . Does not need to be deliberate
- Fail to report suspicious circumstances
- Inform others of disclosure that may prejudice investigation
- Maximum penalty 14 years / unlimited fine
For further information about anything included on this page contact the Fraud and Investigation Manager steve.baker@molevalley.gov.uk, or X3330