Fraud prevention and detection in the public sector

Office of the Auditor General

In a report tabled in parliament on 19 June 2013, Auditor General Colin Murphy has warned agencies about their susceptibility to fraud and corruption.

Mr Murphy found that seven of the nine agencies examined had experienced fraud or corruption in recent years.

'Disappointingly, no agency had a coordinated approach to managing its fraud and corruption risk and while all the agencies had well-established risk management processes, only two had specifically considered the risk of fraud and corruption through this process,' Mr Murphy said.

Mr Murphy found that while all nine agencies were conducting some form of employment screening it was not consistently done and five of the agencies did not have appropriate training in place for staff on fraud and corruption.

'In fact, no agency had assessed the need to carry out comprehensive checks on employees in key positions and although all agencies request information from job applicants such as qualifications, identification and references, only two agencies followed through in the collection of this information.'

'The incidence of fraud and corruption in government agencies appears to be on the increase, possibly due to the changing nature of technology, the types of services provided and how they are delivered.'

In 2011 and 2012 WA Police investigated $23 million in public sector fraud.

'This audit is intended to promote awareness of fraud and corruption risks and to assist agencies in adopting a more proactive stance in this area – I expect all agencies to act on the findings and recommendations of this report.'

Fraud Prevention and Detection in the Public Sector (Report 7 – June 2013) can be downloaded from the Office of the Auditor General website at www.audit.wa.gov.au

The following agencies were included in this audit:

  • Department of Transport
  • Insurance Commission of Western Australia
  • Murdoch University
  • Polytechnic West
  • Rottnest Island Authority
  • Water Corporation
  • Western Australian Institute of Sport
  • Western Australian Land Authority
  • Wheatbelt Development Commission