Purpose
The Fraud Response Plan is designed to enable the University to respond quickly and professionally to any suspicion or allegation of fraud or irregularity to ensure that the objectives of the University’s Counter Fraud Policy are met. The plan defines authority levels, responsibilities for action and reporting lines in the event of a suspected fraud or financial irregularity. In accordance with our Counter Fraud Policy, our Fraud Response Plan applies to all Council members, staff, students, and third parties.
Those reporting a suspicion should be aware that the University will treat all disclosures in a confidential and sensitive manner in accordance with the principles underpinning our Public Interest Disclosure (Whistleblowing) Policy. Every effort will be made to keep the identity of all parties confidential so long as such confidentiality is compatible with a fair investigation. An individual who discovers information which they have reasonable grounds to believe shows malpractice or impropriety within the University should be able disclose that information without fear of reprisal and independently of line management where necessary, provided that the disclosure is made in good faith and without malice.
The following are the key stages of the University’s response following the report of a fraud;
- Assessment of Allegation or suspicion of fraud
- Determination of Initial Response
- Investigation
- Reporting
Assessment of Allegation or Suspicion
Any persons that have reason to believe that a fraud or suspected fraud has taken place, or is about to take place, is required to inform their Head of Department and the Head of Internal Audit immediately. The Head of Department will in turn notify the Director of Finance immediately. If it is suspected that the Head of Department is involved in the irregularity, the matter should be notified to the Director of Finance and Head of Internal Audit directly. If it is suspected that the either the Director of Finance or Head of Internal Audit is involved in the irregularity, the matter should be notified to the Vice Chancellor directly. If it is suspected that the Vice Chancellor is involved in the irregularity, the matter should be notified to the Chair of Council directly.
In the event there is ambiguity as to whether the reportable event represents fraud or just the suspicion of a potential fraud, individuals are able to directly contact the Head of Internal Audit where further clarification and advice can be provided.
The event will be determined as to whether it represents a suspected or alleged fraud by the Head of Internal Audit and the Director of Finance.
Determination of Initial Response
The Director of Finance with the Head of Internal Audit (with due reference to other parties as considered appropriate) will determine the scope of the investigation and will refer the matter to the F3 reporting group if the fraud is over the thresholds associated with reporting to the Office for Students. In determining the scope of the investigation consideration will be given to;
- Immediate actions to safeguard individuals or University Assets e.g. Suspension, Escorting off campus, Securing of assets. (see relevant sections)
- Determining who will be the Lead Investigator, ordinarily the Head of Internal Audit
- Timing of actions. It may be necessary to carefully co-ordinate actions, so evidence is prevented from being destroyed. This will require the input of DDAT, Security and Human Resources. In addition, there may occasionally be circumstances where it is decided to allow a fraud to continue to identify, for example, further culprits
- Consideration as to which core stakeholders need to be contacted as part of all stages of the investigation
- Consideration with respect to the interaction necessary between this investigation and any required action as determined by the Staff Disciplinary Policy
- Initial Media Engagement (where relevant)
- Whether the matter should be reported immediately to the police (or further investigation is required)
- Whether any external third parties are to the best of our knowledge required to be informed of the alleged/suspected fraud. e.g. Research funding bodies.
These initial considerations will be captured and retained as part of the fraud investigation. The operational approach and scope to the fraud investigation may likely need to be flexed as new matters or evidence come to light. In the event that the matter has not been satisfactorily addressed as above the reporting individual can raise a concern under the Public Interest Disclosure (Whistleblowing) Policy.
Investigation
Access to information and evidence
The Lead Investigator will be entitled to the full co-operation of all University staff and students and have access to all required buildings, systems, records (both manual and electronic) and staff to enable a complete investigation of the suspected fraud. Staff and students should note that failure to co-operate fully with an investigation may itself constitute grounds for disciplinary action.
Suspension and Removal from Campus
If considered appropriate, the Lead Investigator at the start of the investigation will liaise with the Deputy Director of HR or Director of Student Support and Safeguarding and (if appropriate) Head of Security or other role holder(s) required by the relevant disciplinary policy & procedure to determine if the individual will be suspended. If considered appropriate an individual may be suspended from duties or studies while or immediately prior to the investigation being undertaken.
The timing of suspension will need to be considered in terms of preventing the destruction of evidence. This will be carried out in accordance with the relevant University Disciplinary Policy and Procedure.
In the above circumstances, the suspect(s) will be approached unannounced by Security and they should be supervised at all times before leaving the University's premises. They will be allowed to collect personal property under supervision, but should not be able to remove any property belonging to the University or to access a computer. Any security passes and keys to premises, offices and furniture must be returned to the University. Laptop computers and associated disks must also be returned.
The University's Chief Information Security Officer will advise on the best means of denying access to the University whilst suspects remain suspended.
Securing of Digital Evidence and Limiting Access
It may be necessary to secure digital evidence on receipt of an allegation in order to prevent destruction of evidence. The Head of Internal Audit/ lead investigator will provide a request to the Chief Information Security Officer who will secure the various email records and the various electronic files held by the individual. This approach will be undertaken in line with pre-defined procedure. All review of the data as part of the investigation will be appropriately logged.
It will be necessary to ensure that the evidence is secure from examination and alteration by University IT employees and provided to the Lead Investigator in a suitable format.
Securing of Physical Assets
All physical evidence secured as part of the fraud will as far as possible be dated, logged and stored in a secure area.
Interviews
The purpose of the investigatory interview is to gather facts.
The Interview will ordinarily be led by the Lead Investigator; for allegations in relation to staff they will normally be supported and advised by an HR Advisor or Business Partner.
Investigatory interviews will be recorded, and a transcript provided which will require signature from all parties as being a true and fair account.
Relevant parties will be advised as soon as reasonable that an investigation is taking place, and this will be confirmed to you in writing. This may need to be completed after evidence has been secured or a preliminary investigation has been undertaken. You will normally be interviewed as part of the investigation, but there may be exceptional circumstances where the University will proceed directly to a formal disciplinary meeting.
Staff have the right to be accompanied at an investigatory interview and throughout the procedure by a work ‘companion’ (an accredited trade union representative or fellow employee who has no connection with the matters being investigated) as defined by the ACAS Code of Practice on disciplinary and grievance procedures.
Media Relations
It may also be necessary to involve colleagues in communications if there are potential public relations, internal communication, and/or media issues.
Involving the police
Decisions about when to involve the Police may occur at any time during the process. All decisions about reporting to the police will be taken by Director of Finance.
The decision about involving the Police should normally be made before the commencement of a formal University disciplinary investigation. If the allegations are passed to the Police and they take on a criminal investigation, it is normal that the University would be required to not investigate them until the Police’s investigation has been completed (in order to prevent the potential prejudicing of any evidence). If the Police do complete a criminal investigation but find no grounds for a criminal prosecution, the case may then be handed back to the University, who could carry out its own disciplinary investigation at this point.
In line with good practice, where it is decided not to involve the police, the Director of Finance should advise the Audit & Risk Assurance Committee of the reason.
The Lead Investigator should prepare an ‘Evidence Pack’ that can be handed to the police at the time the fraud is reported, and a Crime Reference Number obtained. The Evidence Pack should include a summary of the fraud, highlighting (where known) the amount, the modus operandi, and the location, and including photocopies of key supporting documents and contact details of the Lead Investigator. All contact with the police should be channelled through the Lead Investigator.
Recovery of losses
Recovering losses is a major objective of any fraud response investigation. The Head of Internal Audit will ensure that in all fraud investigations the amount of any loss is quantified as far as possible.
Repayment of losses will be sought in all cases. Where the loss is considered substantial, legal advice should be obtained without delay about the need to freeze an individual’s assets through the courts pending the conclusion of the investigation. Legal advice should also be sought about the prospects for recovering losses through the civil court in circumstances where the perpetrator(s) refuse repayment. The University would normally expect to recover costs in addition to losses. The University’s insurers should be involved in such cases and, indeed, their notification (above) may be a mandatory requirement of cover.
Disciplinary
The University will follow its standard and established disciplinary procedures against any member of staff or student who has committed fraud. This includes providing the right to appeal.
The University will consider prosecution of any such individual.
Reporting
Office For Students
All frauds which meet the OfS threshold for a ‘Reportable Event’ will be reported in a timely and appropriate manner. All correspondence with the OfS will be co-ordinated by the Director of Policy, Planning and Compliance.
ARAC and Council
Frauds over the OfS Threshold
The Head of Internal Audit will provide regular confidential progress reports to the Chair of the Audit & Risk Assurance Committee, Chair of Council, Vice Chancellor, Director of Finance and the External Auditor where the fraud meets the OfS threshold for a reportable event. The scope of the report should include the circumstances surrounding the case, contributory factors and progress with the investigation including: - quantification of losses identified to date - progress with action for recovery of losses - progress with disciplinary action - progress with criminal action - estimate of resources required to conclude the investigation - actions taken to prevent and detect similar items
All Frauds (including those under the OfS thresholds)
On completion of the associated investigation the Head of Internal Audit will submit to ARAC a report for all frauds typically containing: - A description of the incident, including the value of any loss, the people involved and the means of perpetrating the fraud - Actions taken to prevent recurrence, and, - A plan detailing any recommendations and actions (with timings) required to strengthen future fraud responses
An annual report of fraud and alleged fraud will be provided to ARAC which will provide an overview of fraud with the previous year and the actions taken. In addition, it will consider performance information.
Third Parties
Fraud and alleged fraud will be reported to third parties in line with our contractual obligations.
Reportee
The Reportee will be informed of the outcome of the fraud investigation upon its conclusion.
University Community
The Head of Internal Audit will co-ordinate communication alongside input from key stakeholders e.g. the Chair of the Audit & Risk Assurance Committee, Director of Finance & Director of Communications.
A communication plan associated with disclosing the outcome of fraud investigations where it is determined there was a fraud, where it is reasonably possible to keep the anonymity of the partners.
Key individuals (e.g. such as those responsible for the implementation of similar controls or where new controls are being instigated) will receive communication with regards to the fraud in order to strengthen the control environment and reinforce the University’s Counter-fraud culture.