Case Study: Fraud and corruption control for NSW State Government

RSM Australia’s Fraud & Forensic Services team provided Fraud and Corruption Control Services for an NSW State Government agency. 

A New South Wales (NSW) organisation contacted our Fraud & Forensic Services team for assistance. This organisation needed to assess the adequacy and effectiveness of their existing fraud and corruption control policies and processes.

Navigating this engagement demanded delicacy, given that an agency of the NSW State Government manages this organisation.

Our Fraud & Forensic Services team conducted a comprehensive assessment of their existing fraud and corruption control policies and processes.

This involved:  

Reviewing fraud and corruption control arrangements

Our dedicated fraud unit got to work, examining the existing fraud and corruption controls the organisation had in place. Specifically, we checked to ensure that the existing control arrangements were compliant with the Treasury Circular TC18-02 NSW Fraud and Corruption Control Policy and held up against the better practice of Australian Standard AS 8001:2021 Fraud and Corruption Control. 

Examining Fraud Control Plan processes

We performed a thorough investigation of all the processes the organisation had put into place relating to their Fraud Control Plan. This included the processes for monitoring the implementation of the Plan and how the organisation managed reports of suspected fraud or corruption.

Performed fraud / corruption data analytics testing 

To fortify our assessment, we performed targeted data analytics testing, including:

• Comparing Bank Accounts - Cross-checking current vendor master file listed bank accounts against employee destination payroll bank accounts.
• Employee Business Interests Search - Randomly selecting employees and conducting a publicly available ASIC search to identify any business interests as directors, secretaries, or shareholders. We then compared this information against conflicts/business interests or similar declarations. 
   

Our tailored approach

At RSM, we know that every client is unique. That is why we tailor our approach to every engagement. In this instance, to provide a nuanced assessment, our Fraud and Forensics team tailored our approach through:

• Discussions with key stakeholders - Our team engaged in discussions and interviews with key stakeholders to gain a deep understanding of the organisation’s fraud and corruption control system.
• Alignment with best practices - We identified and compiled leading-edge materials relevant to the client and engagement, aligning with industry best practices.
• Identification and testing of entity-level controls - Unearthed key controls at the entity level and conducted sample testing, including pivotal data analytic assessments on areas prone to high fraud and corruption risks.
• Verified legislative compliance - Conducted a desktop review of pertinent documentation, pinpointing key improvement opportunities against legislative benchmarks and industry best practices. This encompassed a thorough evaluation in line with the Treasury Circular TC18-02 NSW Fraud and Corruption Control Policy and the Australian Standard AS 8001:2021 Fraud and Corruption Control.
• Holistic risk assessment - Reviewed the organisation’s latest fraud and corruption risk assessment, ensuring completeness. We also identified opportunities for additional considerations in the realm of fraud and corruption risks.
• Evaluated employee awareness - Assessed the adequacy of communication channels and the effectiveness of employee awareness training in the domain of fraud and corruption control, striving to enhance overall awareness among employees.

Challenges, Issues and Risks

One of the pivotal challenges we encountered during this engagement revolved around the difficulty in procuring complete and accurate data. Our Fraud and Forensics team need accurate data to conduct effective data analytics testing. The process of obtaining comprehensive datasets posed inherent complexities, requiring careful efforts to ensure the information's integrity and reliability.

Outcomes

In the end, our team drew on our experience to navigate these challenges and deliver a comprehensive report. This report highlighted ways for the organisation's management team to improve their fraud and corruption controls. These suggestions included ways to enhance their fraud and corruption controls, improvement opportunities, and any identified inefficiencies. These recommendations aim to strengthen the organisation's ability to prevent, treat and mitigate fraud and corruption risks.
 

RSM Australia's Government services team stands as a beacon of integrity and values, dedicated to supporting our clients in the government sector. We are proud recipients of the Client Choice Award for Best Provider to Government and Community, a testament to our commitment to excellence. Our team will continue to uphold our values, deliver exceptional service, and make a positive impact on our clients and the communities we serve.

For more information

If you would like to learn more about the topics discussed in this article, please contact Roger Darvall-Stevens.