The council has exposure to many fraud risk areas, some of which are detailed in the list below:
- Subletting - where a resident of a council property sublets all or part of their property for financial gain whilst not living at the property as their main and principle home.
- Housing Application fraud - a person fills out an application to apply for council housing deliberately lying about their circumstances such as not telling us about the fact that they own a property.
- Succession fraud - when a council resident dies and another family member/close relative moves into the property and pretends that they have been living at the property for more than a year in order to succeed the tenancy.
Right to Buy fraud:
- A council tenant submits a Right to Buy application when they are not living at the property and or they use money to fund the purchase from illegal activity or money laundering.
- Suppliers collude with each other in fixing prices to secure business or maximise their profit margins. This could result in the organisation paying too much for works/ services or goods.
- Suppliers collude to rig bids by submitting false bids so that one particular supplier is more likely to win the contract. This could result in the organisation paying too much for works/ services or goods.
- Suppliers bribe the organisations personnel in order to influence the tendering process. This could be money, gifts or offering to carry out personal work (i.e. building work) at the officer’s own residence.
- Organisations personnel deliberately pay for works they know to be substandard or not completed so the contractor benefits (could involve collusion/ bribery). This will result in additional costs to the organisation through overpayment and possible remedial works.
- Organisations personnel and suppliers or contractors collude with each other to produce false invoices which results in a financial loss to the organisation.
- Contractors and suppliers submit false invoices for works not completed or services not provided, or they submit overinflated invoices. If the organisations personnel do not identify this, they could suffer financial losses.
- Organisations personnel separate purchases to avoid tender thresholds, benefitting a particular supplier or contractor (could involve collusion/ bribery).
- Personnel purchase equipment with the organisation’s funds for personal use.
- Theft by staff, contractors or suppliers which includes theft of cash, equipment, data.
- Submission of false claims for travel expenses that have not been incurred or overtime not worked.
- Over inflation of genuine claims.
- Submission of fraudulent petty cash claims.
- Using an organisations credit card/ purchase card for personal use.
- Assisting family and/or friends or oneself to obtain contracts or services.
- Working elsewhere whilst claiming to be off sick and receiving sick pay.
- Using the organisations assets for personal use (without permission), such as laptops, iPads, tools and vehicles.
- Processing fake invoices for goods/services not received and keeping the proceeds. (Could be in collusion with contractor/ supplier).
- Creating fictitious employees on the payroll system and diverting funds to a personal account.
- Failing to charge properly for goods/services, especially for friends and family or in return for reward. Examples may include hire of rooms.
- Creation of invoices for non-existent suppliers.
- Running a personal business during work time.
- Paying inappropriate bonuses or honorarium.
- Employing family and/or friends without following proper processes.
- Making purchases or entering contracts with suppliers/contractors known personally or to another member of staff without following proper process or declaring business interest.
- Paying suppliers/ contractors who fail to deliver goods/services or do not deliver to the expected standard.
- Improperly disposing of assets.
- Colluding with criminals to defraud the organisations, Council and/or service user of funds.
- Diverting funds due to a creditor to a fraudulent account (could involve collusion/ bribery).
- Fraudsters may pretend to be a genuine creditor and contact the organisation to inform of a change in bank details. The new bank details will belong to the fraudster. The request may take the form of an email (phishing), letter or phone call. This type of fraud is known as payment diversion fraud. The victim is tricked into making a genuine payment to a fraudsters account. This money is extremely hard to recover as it is usually moved between accounts very quickly.
- Creditors submit false invoices and personnel may be colluding in this and deliberately paying them.
- Staff create fake creditor accounts and false invoices.