Creating a Low Fraud Environment

Nobody wants to come to work and worry about what can go wrong. We don't want to doubt our co-workers and their honesty. The fact is most people will not commit an offence related to theft, fraud and corrupt conduct. But we must accept the concept, the reality that a fraud is possible. If you do not believe fraud is possible, you will not identify it, even if it is clearly evident. Very often fraud symptoms are viewed as administrative errors because individuals cannot conceive of the existence of fraud particularly where there is a long time affiliation with co-workers.

Procedures can (and should) be instituted to help reduce the risk of impropriety. The following procedures will help.

Identify assets for which you have responsibility. Examples include department expenditures, ie. major and minor equipment purchases, personal computers and laptops, software, petty cash, and amounts collected as revenue.

Identify the risks associated with safeguarding these assets. Ask yourself:

1. How could these assets be misused or improperly used?
2. If these assets were misused or misappropriated, how would I know?
3. What controls exist to prevent or detect inappropriate use or loss of assets?
4. What additional controls are necessary to ensure that assets are adequately protected from loss? and
5. Is the cost of additional controls reasonable in relation to the risk involved?

Establish a positive control environment in your department. It is important to demonstrate control consciousness. A genuine interest and concern for internal control should be conveyed to all staff members.

The following is a set of guidelines which should be in place to ensure an adequate system of internal control exists:

1. separation of duties;
2. physical safeguards over assets;
3. proper documentation;
4. proper approvals;
5. adequate supervision;
6. physical inventories; and
7. independent validation of transaction accuracy.

Hire honest employees. Check references of all pending employees.

Ensure that all staff members are familiar with the University's policies and procedures. Copies of the aforementioned policies should be issued to department members and questions should be addressed by department management.

If you have any questions please contact us and we will be happy to help (if we can).