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Workplace Fraud

Supplier: LaneWorkSafe

KPMG Corporate conducted a fraud awareness poll of approximately 850 Australian companies. 44% of businesses were aware that they had experienced some kind of fraud over the preceding twelve months period. 66% of that fraud was internal i.e. committed by those within the business or organisation. The vast majority of these recorded instances related to sums of less than ten thousand dollars.

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Workplace Fraud

60% of managers rated fraud on their business as a major problem facing them. All organisations must give attention to this problem.

Workplace fraud possesses a number of characteristics that render it easer to commit than ordinary crime and significantly harder to detect.

It is unavoidable that staff must be in a position of trust that grant them access to property and decision making processes capable of abuse. These are the crucial factors to understand when determining a strategy for fraud control.

The KPMG survey also revealed that over 50 per cent of fraud against business was identified as being the result of poor internal controls. There are three important principles in managing fraud control:

  1. Prevention is better than cure
  2. Fraud control is a management function
  3. Accountability makes for committed management.

How to achieve an organisation culture of Integrity
The first basic principle is to have a workplace which enables workers to be happy and satisfied. The principles of honesty and integrity should be made plain at every opportunity. A number of strategies can be adopted:

  • Through recruitment. The requirement for integrity and a commitment to honesty in the performance of work can be made plain at the recruitment stage.
  • Training and education. Lectures, circulars, discussion groups, statements of organisational purpose and job descriptions can all reinforce the message that honesty and integrity is highly valued within the organisation.
  • Performance appraisal. Commitment to integrity and honesty in the performance of duties can be made a significant and overt factor in regular performance appraisals.
  • Financial rewards. Bonuses can be paid whether for performance generally or in respect of individual actions that demonstrate a commitment to the principles.
  • Signposting. Statements of organisational purpose and mission can be drawn up in conjunction with employees who will then have a degree of ownership of them.
  • Management should set a good example.
  • There must be clear avenues for wrongdoing to be exposed, and "whistleblowers" must be encouraged and publicly supported.

Whether the aim is to achieve maximum private sector profit or to perform public sector works at minimum cost the efficient achievement of those objectives will almost preclude fraudulent and dishonest behaviour.

It will therefore be important to:

  • Educate the workplace concerning the overall aims of the business or entity.
  • Treat employees well and involve them in decision-making so that they feel that their opinions are valued and that they are a true part of the overall direction of the organisation.

Equate employee rewards with the organisations rewards so that they can more readily see an identity between their interests and those of the organisation.

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