Seven lessons to keep grant fraud in check

The 23-page Fraud and Corruption Control Arrangements is aimed at Australian government officials responsible for fraud and corruption control, including those involved in grants administration and program delivery.

The publication distils findings into seven lessons linked to self-assessments and case studies:

• Connect risk assessments to actual controls
• Make sure frameworks cover corruption and fraud
• Plan for internal and external threats
• Give staff a clear process for dealing with suspected fraud or corruption
• Ensure officials responsible for fraud control are properly trained and qualified
• Test whether controls are working
• Record fraud incidents well and put a dollar figure on losses.

One case study involving grants looks at the Indigenous Australians' Health Programme, the federal government's largest direct expenditure program involving Indigenous primary healthcare. Auditors found that fraud matters were not consistently recorded in the case management system, and that the system did not classify matters by division or program, despite it being a stated responsibility of divisional managers.

A recurring finding was the gap between policy and practice, with the resource citing the Australian Institute of Criminology's annual census on fraud against Commonwealth entities – it noted that nearly one third of respondents had not tested the effectiveness of their fraud controls within the last two years.

The ANAO stressed that simply updating documents to include the word "corruption", as required under updated Commonwealth fraud and corruption controls, fell short of what was really needed. Instead, entities must consider how corrupt conduct could occur in their organisations and consider whether risk assessments, training and internal policies needed to be revisisted.

The publication suggests grants administrators should be familiar with the Commonwealth Fraud Prevention Centre's Grants Administration Counter Fraud Toolkit, which covers how to prevent, detect and respond to fraud across the grants lifecycle – from application and assessment through to acquittal.

Read the ANAO's Fraud and Corruption Control Arrangements Insights publication