The latest Survey of Fraud Control Arrangements in APS Agencies revealed that only 48 out of 157 agencies had a management information system (MIS) in place for recording, monitoring and reporting all aspects of fraud control. Having such a system in place is important in "identifying systemic issues or control weaknesses and helps to manage cases of fraud expeditiously once they have occurred".
However, the ANAO said that of "particular concern" to it was the fact that approximately 43 percent of agencies that had reported having experienced fraud in the previous two years also advised that they did not have any form of fraud control MIS".
The audit also reported that 99 percent of fraud against the Commonwealth is committed against approximately 10 percent of agencies, which were the ones which tended to have comprehensive fraud control systems in place.
"This does not mean that those agencies that did not report fraud can assume an absence of it," read the audit. "It may mean that they either do not have the systems in place to detect fraud or that the systems already in place are ineffective or inadequate."
In response to the ANAO's survey agencies reported experiencing a total of AU$1.69 million in internal fraud in 2000-01, which rose to AU$2.63 million in internal fraud in 2001-02. A total of AU$115.13 million in external fraud was reported by agencies for 2000-01 and AU$90.7 million in external fraud in 2001-02.
"However, these figures must be seen as only the minimum level of fraud because of a number of issues related to agencies' reporting of fraud, including the fact that a common definition of fraud is not used across the APS," read the audit.
The audit found only 50 percent of agencies used the current Commonwealth definition of fraud. Around 32 percent said they were still using the previous definition while 11 percent claimed they used an agency-specific definition and 7 percent did not supply a definition for the survey. This lack of consistency was also evident in areas such as defining what constitutes an allegation of fraud and at what point a case of fraud is considered proven.
"Accordingly, ANAO considers that the agencies should work towards adopting the Commonwealth's current definition so that accurate data can be collected and analysed to provide accurate information about the level of fraud being perpetrated against the Commonwealth," read the audit.
The audit also found that there was a tendency amongst agencies to comply with parts of the relevant guidelines rather than complying with them in full.
