Workplace conduct & capability
Fraud - Anti-Fraud and Corruption Policy
This Policy should be read in conjunction with the Code of Conduct applying to employees and lay members of Council (see below). The Code relates to Conduct with regard to both financial and non-financial matters. Breaches of the Code by employees may result in disciplinary action being taken in accordance with the various Conditions of Service.
The University expects all employees to conduct themselves at all times having regard to the very highest standards of conduct, probity and confidentiality.
The University Council has taken reasonable steps to ensure that there are appropriate financial and management controls in place to safeguard University funds and assets and to prevent and detect fraud and corruption.
The University will fully investigate any allegations of fraud and corruption as soon as the allegation is notified in accordance with the procedures detailed below in 5.
If an employee suspects that improper, fraudulent or corrupt behaviour has occurred within the University, the following procedures should be undertaken (it is to be emphasised that the identity of the individual will be kept confidential so long as it does not hinder any subsequent investigation).
An immediate note should be made by the employee of the concerns; all relevant details of conversations, dates, times and names should be noted.
Other than in the circumstances noted in d) below, in order to ensure that the University does not suffer any loss of any nature, full details of the matter, including notes, should be reported without delay to the Registrar. He/she will decide on the appropriate investigation or action that should be taken.
Any allegations of wrongdoing made against an employee or employees of the University will be investigated and dealt with under the established disciplinary procedures approved by Council.
Any allegations of wrongdoing made against a student or students of the University will also be dealt with under the established disciplinary procedures.
Any allegations relating to an individual’s financial conduct will be reported without delay to the Director of Finance. He/she will then decide on the most appropriate action to be taken in order to reduce the possibility of any financial loss to the University. He/she will also instruct the University’s Internal Auditors to carry out an investigation and to report subsequently to the Audit Committee. See appendix A for detailed response plan.
Where for whatever reason the employee making an allegation considers it inappropriate to follow the procedure above, the matter should be reported directly to the Vice-Chancellor or Chair of Council as appropriate. Such allegations might be in respect of the behaviour of a senior officer of the University, a lay member of the governing body or about the propriety of a committee or other collective decision. An employee may use this route if they are concerned that use of the above procedures may jeopardise their position within the institution.
In any case where an allegation has been made, the person to whom the allegation is reported should make a record of its receipt and of what subsequent action is taken. Any allegation made under this procedure will be the subject of a preliminary investigation either by the person to whom the allegation is made, or more usually by a person or persons appointed by him/her. The allegation shall be reported in confidence to the Audit Committee at the commencement of the investigation and the results reported to them at its conclusion.
Where no investigation is carried out, and the allegation is effectively dismissed, the person making the allegations shall be informed and given the opportunity to remake the allegation to some other person or authority within the University, if he or she is unsatisfied with the decision.
Where an allegation is dismissed after an investigation, the person or persons against whom the allegation is made will be told of the allegation, the evidence supporting it and be allowed to comment before the investigation is concluded and a report made to the Audit Committee. The Audit Committee should satisfy itself that there is no case to answer and report their findings and reasons to the complainant.
Any person making any allegation shall be guaranteed that the allegation shall be regarded as confidential to the receiver and, in the case of c) above, the Director of Finance, until an investigation is launched. Thereafter the identity of the person making the allegation may be kept confidential, if requested, unless this is incompatible with a fair investigation, or if there is an overriding reason for disclosure (for example, if police involvement is required).
Provided the allegation has been made lawfully, without malice and in the public interest, the employment position of the person will not be disadvantaged for reasons of making the allegation.
Revised - 31st January 2007.
Suspicion of fraud or irregularity may be captured through a number of means, including the following:
- requirement on all personnel under financial regulations to report fraud or irregularity to the Director of Finance
- public interest disclosure procedure (‘whistle-blower’s charter’)
- planned audit work
- operation of proper procedures.
All actual or suspected incidents should be reported without delay to the Director of Finance. Director of Finance should, within 24 hours, hold a meeting of the following project group to decide on the initial response:
- Registrar and Secretary (chair)
- Director of Human Resources
- Director of Finance.
The project group will decide on the action to be taken. This will normally be an investigation, led by internal audit. The decision by the project group to initiate a special investigation shall constitute authority to internal audit to use time provided in the internal audit plan or contingency time, or to switch internal audit resources from planned audits.
Should the Director of Finance be suspected of fraud or irregularity the matter should be reported without delay to the Registrar and Secretary, who would then be responsible for convening the above meeting without the Director of Finance.
Prevention of further loss
Where initial investigation provides reasonable grounds for suspecting a member or members of staff of fraud, the project group will decide how to prevent further loss. This may require the suspension, with or without pay, of the suspects. It may be necessary to plan the timing of suspension to prevent the suspects from destroying or removing evidence that may be needed to support disciplinary or criminal action.
In these circumstances, the suspect(s) should be approached unannounced. They should be supervised at all times before leaving the University’s premises. They should be allowed to collect personal property under supervision, but should not be able to remove any property belonging to the University. Any security passes and keys to premises, offices and furniture should be returned.
The head of security should be required to advise on the best means of denying access to the University, while suspects remain suspended (for example by changing locks and informing security staff not to admit the individuals to any part of the premises). Similarly, the head of computing services should be instructed to withdraw without delay access permissions to the University’s computer systems.
Internal audit shall consider whether it is necessary to investigate systems other than that which has given rise to suspicion, through which the suspect may have had opportunities to misappropriate the University’s assets.
Establishing and securing evidence
The University will follow disciplinary procedures against any member of staff who has committed fraud. The University will normally pursue the prosecution of any such individual.
Internal audit will:
- maintain familiarity with the University’s disciplinary procedures, to ensure that evidence requirements will be met during any fraud investigation
- establish and maintain contact with the police, following approval from the Vice-Chancellor
- establish whether there is a need for audit staff to be trained in the evidence rules for interviews under the Police and Criminal Evidence Act
- ensure that staff involved in fraud investigations are familiar with and follow rules on the admissibility of documentary and other evidence in criminal proceedings.
Notifying the HEFCE
The circumstances in which the University must inform the HEFCE about actual or suspected frauds are detailed in the HEFCE Code of Practice: Accountability and Audit as below. The Vice-Chancellor is responsible for informing the HEFCE of any such incidents.
Each HEI’s management is responsible for the prevention, detection and investigation of irregularities, including fraud and corruption. To discharge this responsibility, management should ensure that an adequate system of internal control is operated. It is not a primary function of internal audit to detect fraud. However, the work of the internal audit service, in reviewing the adequacy and effectiveness of the internal control system, should help management to prevent and detect fraud. The internal audit service should ensure that it has the right to review, appraise and report on the extent to which assets and interests are safeguarded from fraud. When internal auditors suspect fraud, or are carrying out a fraud investigation, it is important to safeguard evidence. They should assess the extent of complicity to minimise the risk of information being provided to those involved, and the risk of misleading information being obtained from them.
Internal auditors should report serious weaknesses, significant fraud or irregularity, or major accounting breakdowns to the designated officer without delay. (Paragraph 34 gives guidance on what is significant.) The designated officer must then inform the chair of the audit committee, the chair of the governing body and the HEFCE accounting officer of such matters without delay. If he or she refuses to do so, then the internal auditor must report to them directly.
The HEI should ensure that the internal auditor is informed, as soon as possible, of all attempted, suspected or actual fraud or irregularity. The internal auditor should consider any implications in relation to the internal control system, and make recommendations to management, as appropriate, to strengthen the systems and controls.
Recovery of losses
Recovering losses is a major objective of any fraud investigation. The internal auditor shall ensure that in all fraud investigations, the amount of any loss will be quantified. Repayment of losses should be sought in all cases.
Where the loss is substantial, legal advice should be obtained without delay about the need to freeze the suspect’s assets through the court, pending conclusion of the investigation. Legal advice should also be obtained about prospects for recovering losses through the civil court, where the perpetrator refuses repayment. The University would normally expect to recover costs in addition to losses.
References for employees disciplined or prosecuted for fraud
Any request for a reference for a member of staff who has been disciplined or prosecuted for fraud shall be referred to the Director of Human Resources who shall prepare any answer to a request for a reference having regard to employment law.
Reporting to governors
Any incident matching the criteria in the HEFCE Audit Code of Practice (as in paragraph 12 above) shall be reported without delay by the Vice-Chancellor to the chairs of both the council and the audit committee.
Any variation from the approved fraud response plan, together with reasons for the variation, shall be reported promptly to the chairs of both the governing body and the audit committee.
On completion of a special investigation, a written report shall be submitted to the audit committee containing:
- a description of the incident, including the value of any loss, the people involved, and the means of perpetrating the fraud
- the measures taken to prevent a recurrence
- any action needed to strengthen future responses to fraud, with a follow-up report on whether the actions have been taken.
This report will normally be prepared by internal audit.
The project group shall provide a confidential report to the chair of council, the chair of audit committee, the Vice-Chancellor and the external audit partner at least monthly, unless the report recipients request a lesser frequency. The scope of the report shall include:
- quantification of losses
- progress with recovery action
- progress with disciplinary action
- progress with criminal action
- estimate of resources required to conclude the investigation
- actions taken to prevent and detect similar incidents.
Responsibility for investigation
All special investigations shall normally be led by internal audit. Special investigations shall not be undertaken by management, although management should co-operate with requests for assistance from internal audit.
Some special investigations may require the use of technical expertise which internal audit does not possess. In these circumstances, the project group may approve the appointment of external specialists to lead or contribute to the special investigation.
The University is a large complex organisation and its actions have an impact on the education and livelihood of thousands of people. It is responsible for spending considerable sums of money from the public purse, industry, charitable bodies and students. It is essential that all these interested parties have confidence that the University maintains the highest standards of conduct in handling money and in dealing with other issues. This can best be demonstrated by internal arrangements that guard against fraud and corruption and show that decision making is open and fair. Stringent procedural and audit arrangements are already in place but the proper conduct of individuals in the University, especially those in positions of trust, is also very important. This Code of Conduct sets out guidance which should be read and observed by all employees of the University. Parts of the Code will also be relevant to lay members of Council.
2. CONDUCT WITH REGARD TO FINANCIAL MATTERS
- Outside Work
The various Conditions of Service lay down procedures which must be followed in connection with paid outside work. The underlying principles of these rules are to ensure that work for the University does not suffer because of outside commitments.
- Intellectual Property
Where appropriate the rights to benefit from inventions, discoveries and patents are clearly defined in the Conditions of Service. The procedures in the Conditions of Service must be followed at all times. The University has put in place facilities, through the Intellectual Property Office, to maximise the potential benefits from such intellectual property.
- Conflicts of Interest
Many individuals will be in a position to place or to influence the placing of orders for work to be done for the University. In situations where they or any spouse, partner or close family member could gain direct personal, financial or other benefit from such transactions this interest should be declared to the Head of Department/Section and their approval sought before any orders are placed. If they are a member of a Committee dealing with any matter by which, directly or consequentially, they or any spouse, partner or close family member could gain direct personal, financial or other benefit, this interest should be declared to the Chair of the Committee in advance and they should withdraw for the duration of the relevant item. This does not extend to the holding of shares in publicly quoted companies.
- Gifts Or Inducements To Purchase
Occasionally firms offer gifts or hospitality to individuals with purchasing authority to foster goodwill. Such offers should be treated with great care since the personal integrity of the individual might be called into question.
As a guide any hospitality accepted should not be significantly greater than that which could be reciprocated. Regular invitations from the same source which might create obligations or raise suspicions should be refused.
Gifts of a trivial or inexpensive nature are acceptable but those with an assessed value of more than £25 should not normally be accepted. Where a more valuable gift is offered it should be accepted on behalf of the University for display or disposal. Gifts of money should always be refused.
Individuals responsible for purchasing should take particular care to ensure that there can be no criticism that unequal treatment has been given to suppliers involved in a tendering process. Advice is available from the Purchasing Office.
Any personal inducements to place orders should be declined and the matter reported to the Director of Finance immediately.
3. NON-FINANCIAL AREAS
- Conflicts Of Interest
The highest standards of behaviour are also expected in all other areas of University life, especially where individuals are in positions to make decisions which may have significant impact on others. In all such cases it is important that decisions are taken in a fair and balanced way that could stand up to external scrutiny. Conflicts of interest should be identified so that individuals are not involved in decisions where their actions could be seen as biased. Examples of areas where difficulties could arise are: recruitment of staff, selection and assessment of students and involvement in promotion or annual review processes.
- Access to Confidential Information
Although the University attempts to conduct its business in an open fashion there will be times when individuals, through their positions as members of committees, selectors/recruiters, line managers etc., become aware of confidential information, either about other individuals or in connection with the University’s commercial/academic activities. Individuals should be aware of the need to keep such matters confidential and to respect the proper channels of communication for such information.
4. RAISING MATTERS OF CONCERN
Individuals have a right and a duty to raise any matters of concern which they may have about the conduct of University business. This should normally be through their Head of Department/Section but in circumstances where this is not appropriate they may approach the Registrar and Secretary in confidence. No individual who expresses their views in good faith and in line with this guidance will be penalised for doing so.
5. BREACHES OF THIS CODE
Breaches of this Code by employees may result in disciplinary action being taken in accordance with the various Conditions of Service.
Revised - 31st January 2007
Reviewed September 2012