Anti-Corruption and Anti-Fraud

How to deal with corruption and fraud beyond Policies and Strategies

Practical guidelines to Fraud risk management from a Cederberg Municipality perspective

1. There is no doubt that the task of developing an enterprise-wide anti-fraud and anti-corruption strategy can be daunting.

2. However Fraud risk management should be implemented by both small and large organizations.

Cederberg applied the following practical steps to improve fraud risk management and dealings with

corruption.

1. Implement a written policy of fraud risk management to convey the expectations of the council and senior management regarding managing fraud risk.

2. Annual Risk assessments should be completed.

3. Evaluate the effectiveness of internal controls.

a. When evaluating the effectiveness of internal controls the following must be considered: I. The legislative background; II. Accountability; III. The limitations of internal controls; IV. How do you know the controls are working?

V. Look at Best-practice internal controls?

4. The Importance of Internal reporting.

a. Design a proper internal reporting system; b. The reporting system must be Practical; c. What does the legislation require?

d. Who is responsible?

e. Keep track of reporting; f. Establish effectiveness; targets g. Best-practice principles; and evaluate

5. External reporting.

a. Apply the same principles as Internal Reporting;

6. Public interest disclosures and awareness.

a. Implement a policy: issues: address the following key a.

b.

c.

Inform the public and clients regarding the Anti-Fraud and Corruption Policy; the Code of Conduct for Councillors and Officials.

whistle-blowing system: toll free number; Keep within the legislative framework;

7. Strengthen Internal Audit Unit.

Internal Audit is limited to a number of hours per annum according to the RBAP. This is not sufficient.

a. Outsource certain specialised functions to external experts; i.e. a review of your financial internal controls.

8. Code of conduct.

a. Regular training of officials and councillors; b. Sign-off by officials and councillors; c. Follow zero tolerance attitudes.

9. Staff education and awareness.

• Inform/ train/ work-shop the Anti-Fraud and Corruption Policy; • the Code of Conduct; • whistle-blowing process with all of your officials at all levels.

• do this on a continuous basis.

General Comments

1. South Africa's numerous anti-corruption agencies and laws indicate a strong political will and commitment towards combating corruption.

2. However, there must be an internal drive from within the organisation, or else the fight against corruption will stay a paper exercise which affects the operating ability of the organisation.