AntiFraud Awareness Audit and Risk Division 14 th September 2016 Outline Definition of Fraud Risks Role of Audit and Risk Function The fraud triangle Trends within NLC NLC Fraud Prevention Policy and Strategy ID: 1020124
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1. Post Indaba Stakeholder Engagement Anti-Fraud AwarenessAudit and Risk Division14th September 2016
2. OutlineDefinition of Fraud RisksRole of Audit and Risk FunctionThe fraud triangleTrends within NLCNLC Fraud Prevention Policy and StrategyNLC is there for you!
3. Definition of Fraud Risks Fraud risks are defined as :intentional act or omission designed to deceive others, resulting in the victim suffering a loss and or the perpetrator achieving a gain. The elements of fraud risks are:A representation about a material factWhich is falseAnd made intentionally, knowingly, or recklesslyWhich is believedAnd acted upon by the victimTo the victim’s damage
4. Role of Audit and Risk FunctionAmongst others:Identify enterprise risks which includes fraud risks by implementing sound fraud prevention procedures and processes in line with PFMA requirements and NLC requirements (Grant Agreements) andimplementing, monitoring and reporting on internal controls that address those risks
5. OpportunityPressureRationalisationFRAUD TRIANGLEGREEDWhen GREED overcomes fear, FRAUD prevails
6. Common Trends of Reported CasesThe use of fraudulent Annual Financial StatementsUnregistered Accountants and Auditors misleading the applicantsService providers that purport to be NLC agents – charging feesSubmission of false information - on the application form, fraudulent quotations, fraudulent invoices, falsification of progress reports etc.Partnerships where the assisting and assisted organisation do not know each otherRegistering of assets on individual’s name and not the organisation’s namePaying full amount of service to be rendered to service provider before any service is renderedDirectly or indirectly giving kick-backs to NLC staff by applicants/beneficiariesMisuse of funds and NLDTF funded assets
7. Policy statement and StrategyThe NLC holds a ZERO TOLERANCE approach towards fraud and corruption hence the strategy to implement Preventative Controls and governance processes in ensuring that fraud risks are effectively monitored and reported on all incidents and reasonable suspicions thereof, are verified and investigated andwhere appropriate, legal recourse to the full extent of the law is taken against perpetrators and legal recourse amongst others include:Disciplinary Action, Institution of Criminal Proceedings, Recovery of Losses and or Civil LitigationAll recourse and actions shall be taken within the constitutional context in which the NLC operates with due regard to the principles of developmental needs, fairness, and administrative justice
8. “Audit and Risk gives reasonable assurance regarding adequacy & effectiveness of internal controls, but we can give you ABSOLUTE ASSURANCE that if you are busy committing fraud & corruption you will be caught one day”
9. What to do ? PROCUREMENT INTEGRITY IT’S UP TO YOU If How is NLC helping you?Call 0800 012 013
10. I THANK YOU