Fraud Prevention in Local Government

Report 5: 2019-20

Auditor General's overview

All organisations, public and private, face the risk of fraud. This will remain the case wherever people and scarce resources interact. Fraud, or even the perception of fraud, can have a serious impact on an organisation’s reputation and resources. It can stem from inside or outside the organisation and by its nature is deceitful, dishonest, and often hard to detect. Numerous Corruption and Crime Commission investigations highlight the risks organisations face.

 

 

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Executive summary
Recent high profile investigations into fraud in the public sector by the Corruption and Crime Commission in Western Australia have featured a number of local government entities...
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Recommendations
In line with better practice, all entities should ensure they implement a coordinated approach to manage their fraud risks. Read more...
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Response from local government entities
All 5 audited entities supported the audit findings and accepted our recommendations. Appendix 4 includes the full responses from audited entities...
Audit finding - Entities have not implemented a coordinated approach to manage their fraud risks
We found that entities have not developed a good understanding of their fraud risks, or a clear vision of how they will manage them. Read more...
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Audit finding - Entities could make themselves more fraud resistant if they strengthen their controls
We found that entities could make their organisations more fraud resistant if they raise staff awareness of risks, improve how they manage conflicts of interests...
Audit finding - Better reporting avenues would help entities detect and respond to fraud
To be well informed, entities need to have strong systems to receive, capture and act on information about potential fraud. Read more...
Audit focus and scope
This audit assessed whether local government entities have taken appropriate steps to prevent fraud. We asked the following questions...
Appendix 1: Summary of legislated responsibilities
Entities are required to meet a number of legislated responsibilities that help control fraud risks. Read more...
Appendix 2: Better practice principles
The table below shows key principles on which our audit focused. These principles are not exhaustive. Read more...
Appendix 3: Summary of local government fraud questionnaire results
Appendix 4: Full responses from audited entities