Substituting old good for new

Over Payment

(eg non existent staff/consultants, delay payroll terminations, falsify records)

• Are payroll terminations reconciled with human resource records?
• Is the payroll reconciled concerning pay levels, acting positions & overtime payments?

Nepotism, Patronage

• Are recruitment and selection guidelines followed?
• Are all positions advertised as required?
• Do selection panels include a member from outside the Division, School or Office?
• Are non Senior Executive vehicle allocations based on a criteria according to need?

SUPPLIES

Collusion between staff and supplier

(purchasing non-existent stock, charging for work not performed or sub-standard work accepted)

• Are processes in place to minimise the risk of collusion, such as job rotation and segregation of duties?
• Are all invoices verified?
• Are the purchasing guidelines followed?
• Is there segregation of duties between the purchaser, the receiver of goods purchased and the accounts payable functions?
• Are processes in place to verify receipt of goods and completion of work undertaken by suppliers?

Cheques made to false persons

• Are accounts regularly paid and reconciled?
• Have any suppliers complained about their invoices not being paid?
• Have the External or Internal Auditors passed comment on the controls in the accounts payable function?

Collusion between staff and external tenderers

• Do tender specifications eliminate potential bidders through over specification?
• Have the winning tenders been low in price but any benefit gained been nullified through contract variations?
• Is one contractor regularly winning tenders and yet is no cheaper or even more expensive than the industry average?

Theft of official purchasing authority or cash

• Are there adequate security measures to protect purchasing instruments?
• Are the whereabouts of all purchasing instruments known and is accountability assigned for each instrument?
• Are corporate cards collected promptly when the respective officer leaves the DSO or is assigned to duties not requiring regular access to a corporate card?
• If the DSO deals in cash, are there appropriate security measures in place, eg is there restricted access to the cash?
• Is the cash regularly reconciled and the amount held kept to a minimum?
• Are there appropriate security measures in place for petty cash?
• Is the petty cash regularly reconciled?

Misuse of Corporate Card/Purchase Orders

(eg overcharging, paying invoice twice)

• Is sufficient detail noted on Corporate card or PO purchases?
• Are invoices promptly verified to allow early detection of possible misuse?
• Is corporate card/PO usage regularly audited to confirm purchases occurred and that goods were received?

Using agency discounts/tax exemptions for private purposes

• Are University  purchasing instruments used for only university  use? Purchasing items for personal use with University purchasing instruments is not permitted – even if the amount is immediately reimbursed to Murdoch.

SERVICE DELIVERY

Collusion between staff and client

(eg services undercharged, invoice/infringement not raised, records go missing, benefits overpaid)

• Are processes in place to minimise the risk of collusion, such as job rotation and segregation of duties?
• Are processes in place to reconcile service delivery with charges raised?
• Are benefit payments and records audited?

Services/benefits provided to non-existant clients

• As above.

POSSIBLE INDICATORS OF FRAUD

The presence of one or more of the following indicators of fraud does not mean that fraud is occurring. They may be the result of other factors. Therefore these indicators should be viewed from a wider context. This segment is is dealt with in two sections

• WORK PRACTICES; and
• EMPLOYEE BEHAVIOUR.

Work Practices

• Missing expenditure vouchers & unavailable official records.
• Crisis management coupled with a pressured business environment.
• Excessive variations to budgets or contracts.
• Lack of Senate or Board oversight.
• Bank and ledger reconciliations are not maintained or cannot be balanced.
• Excessive movements of cash funds or transactions between accounts.
• Unauthorised changes to systems or work practices.
• Lowest tenders or quotes passed over with minimal explanation recorded.
• Lost assets.
• Absence of controls and audit and management trails.
• Lack of clear financial delegation.

Employee Behaviour

• Refuse, evade or delay producing files, minutes or other records.
• Unexplained employee absences.
• Gambling while at work.
• Frequent borrowing money from fellow employees while at work.
• Placing undated/post dated cheques in petty cash.
• Personal creditors appearing at the workplace.
• Covering up inefficiencies.
• Excessive staff turnover.
• Employees with outside business interests or other jobs which conflicts with their duties.
• Signs of excessive drinking or drug abuse.
• Managers bypassing subordinates.
• Subordinates bypassing managers.
• Secretiveness.
• Marked character changes.
• Excessive or apparent total lack of ambition.
• Excessive control of records by one officer.
• Refusal to comply with normal rules and practices.