Fraud
2.1 Fraud has been defined as: the intentional and dishonest distortion of financial statements and other records by persons internal or external to the Council which is carried out to conceal the misappropriation of assets or otherwise for gain. (Source: CIPFA)
2.2 The Fraud Act 2006 came into effect on 15 January 2007. The Act created a new general offence of fraud with three ways of committing it:
- Fraud by false representation (dishonest representation) to gain or cause loss or risk of loss;
- Fraud by failing to disclose information (where there is a legal duty, e.g. as part of a written or oral contract); and
- Fraud by abuse of position.
It also created new offences
- Obtaining services dishonestly;
- Possessing, making and supplying articles for use in frauds; and
- Fraudulent trading applicable to non-corporate traders (extends Companies Acts to sole traders etc).
Corruption
2.3 Corruption has been defined as: the offering, giving, soliciting or acceptance of an inducement or reward, which may influence a person to act against the interests of the organisation (Source: Audit Commission).
Bribery
2.4 Bribery is defined as: The offering, giving or soliciting of an inducement or reward which may influence a person to perform a function or activity improperly.
2.5 The 2010 Bribery Act says that a person is guilty of an offence if either of the following cases applies:
Person A offers, promises or gives a financial or other advantage to another person, and
- Intends the advantage to induce Person B to perform improperly a relevant function or activity, or to reward a person for the improper performance of such a function or activity, or knows or believes that the acceptance of the advantage would itself constitute the improper performance of a relevant function or activity
Person B is guilty of an offence if any of the following cases applies.
- Where Person B requests, agrees to receive or accepts a financial or other advantage intending that, in consequence, a relevant function or activity should be performed improperly (whether by Person B or another person); or
- where the request, agreement or acceptance itself constitutes the improper performance by Person B of a relevant function or activity under the Bribery Act and organisation can be prosecuted if it has failed to prevent bribery.
2.6 Public sector organisations are explicitly covered by the offences in sections 1, 2 and 6 of the Act.
2.7 Members and staff must note that this Policy and Strategy reflects the Council's zero tolerance of both the offering and receipt of bribes.
