1. Introduction
1.1 The purpose of this policy is for the Council to set out clearly for Councillors, employees, contractors, the Council’s partners and the public:
its commitment to tackling fraud and other financial crimes
the actions it promotes to prevent any such acts
the responsibilities of members and employees in minimising the risk of fraud and other financial crimes and reporting any suspicions they may have
1.2 This unified policy consolidates Dorset Council’s approach to preventing and responding to fraud, bribery, corruption, money laundering, and tax evasion. It reflects the Council’s zero-tolerance stance and commitment to compliance with relevant legislation including the Fraud Act 2006, Bribery Act 2010, Proceeds of Crime Act 2002, Criminal Finances Act 2017, and the Economic Crime and Corporate Transparency Act 2023.
1.3 The Fraud Act 2006 created a general criminal offence of fraud and identifies three specific ways in which it can be committed, carrying a maximum penalty of 10 years of imprisonment:
fraud by false representation
fraud by failing to disclose information
fraud by abuse of position
1.4 The Act also created four related criminal offences of:
possession of articles for use in frauds
making or supplying articles for use in frauds
participating in fraudulent business
obtaining services dishonestly
1.5 The Theft Act 1968 and the Forgery and Counterfeit Act 1981 define offences of:
theft
false accounting
forgery
1.6 The Bribery Act 2010 defines bribery as “giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so.” There are four key offences under the Act:
bribery of another person
accepting a bribe
bribing a foreign public official
a corporate offence of failing to prevent bribery
1.7 The Proceeds of Crime Act 2002 and the Terrorism Act 2000 place obligations on the Council and its employees with respect to suspected money laundering and makes it a criminal offence to help a criminal ‘launder’ the proceeds of crime. Money laundering is the disguising of the source of money, either in cash, paper or electronic form to conceal that the money has originated from crime, or that is to be used in the pursuit of future crime.
1.8 The Economic Crime and Corporate Transparency Act 2023 creates a new corporate offence of failure to prevent fraud, enhances transparency of company ownership, tightens regulations on limited partnerships, and expands powers for law enforcement and regulators to tackle illicit finance.
1.9 Fraud, alongside wider financial crimes, is a serious matter that affects both the council and the local area. It can have a direct impact on the level of council tax, the level of resources available to share amongst our community and local services such as housing, social care and education. Dorset Council is committed to achieving high standards of integrity and accountability and expects the same commitment from employees and others working for and dealing with the council. Proper accountability, achieved through probity, internal control and honest administration is therefore an essential aspect of public service.
1.10 The Council operates a zero-tolerance culture to fraud and other financial crimes and is committed to minimising the risks to an acceptable level and will deal with any cases robustly. This policy sets the clearest message to the Council’s stakeholders the importance that the Council places on its responsibility for the effective stewardship and safeguarding of public funds.
1.11 We all have a special responsibility for dealing with public funds and assets. The Council takes very seriously its important stewardship role and, as such, is committed to meeting the high expectations and scrutiny to which the affairs of the Council are quite rightly subject.
1.12 This policy and supporting procedures apply to all Councillors, council employees (including school based staff), volunteers, agency workers and any other stakeholders working on behalf of the Council.
1.13 It supersedes the following separate policies:
anti-fraud, corruption and bribery strategy 2022 to 2025; and
anti-money laundering policy 2022 to 2025
1.14 Thankfully acts of dishonesty associated with Dorset Council is rare and our zero-tolerance approach provides our clear and continuing commitment to dealing with any acts robustly. Widely recognised national guidance in terms of an effective fraud strategy provides three key themes to help focus the public sector approach to eliminating fraud. The Council is fully committed to each of these:
acknowledge: establishing a clear recognition that fraud happens and have an understanding of fraud risks
prevent: the active prevention and detection of fraudulent activity
pursue: being stronger in seeking to punish fraudulent activity and recovering losses
1.15 The Council’s key principles in respect of fraud and other financial crime can be summarised as follows:
take a zero-tolerance approach to any such matters
introduce appropriate measures designed to minimise the risk
operate a procedure to enable genuine concerns to be reported and to protect those who do so;
adopt formal procedures to investigate situations when it is suspected
aim to reduce losses to an absolute minimum
work closely with the Police (and other appropriate agencies) to combat fraud and seek appropriate redress through legal proceedings
use powers to work with others and share information to identify potential areas of concern;
deter people from making malicious or unfounded accusations
the Council also expects that any individual, associated or outside organisations
including suppliers, contractors and claimants, will act honestly in their dealings with the Council
where concern exists that this is not the case, the Council actively encourages any such matters to be reported
1.16 This policy is supplemented by Our Values and our Code of Conduct for Employees. Our Values are an integral part of the recruitment and selection process for all employees of Dorset Council, and can be found on the intranet. The code of conduct is also on the intranet, and compulsory reading for all employees of Dorset Council.
1.17 The Council also has procedures in place for segregation of duties where appropriate to counter fraud and ensure there are no situations of unfettered power. Members and senior officers provide the high-level commitment to such risk-based prevention procedures with are supported by service directors. The S151 officer promotes the “no Tolerance” stance through work undertaken by Internal Audit who have a role to promote compliance with counter fraud arrangements and raise awareness amongst staff.
1.18 In recognising the new corporate offence of “failure to prevent fraud” within the Economic Crime and Corporate Transparency Act 2023, the Council is committed to the following:
to maintain and demonstrate a zero tolerance approach and a robust response to fraud and other financial crimes
to regularly review and update procedures to reflect changes in risk and legislation, every three years and more regularly where required
to undertake regular risk assessments to identify areas where the risk of fraud is highest, particularly in relation to third-party relationships, procurement, and financial transactions. These assessments will inform the design and implementation of proportionate prevention procedures
ensure that all employees, contractors, and associated persons are aware of their responsibilities through training and communication
provide targeted training to staff in high-risk roles
enable an appropriate identification and monitoring regime, via internal reporting requirements (including whistleblowing); use of proportionate fraud identification processes (including consideration of any technology to improve detection); and proportionate risk based coverage within the internal audit plan
to collaborate and data share with other agencies, where appropriate
include anti-fraud clauses in contracts with suppliers and service providers; and
conduct due diligence on third parties, including verification of beneficial ownership and financial standing
1.19 A fraud and financial crimes compliance matrix will be maintained and reported annually to the Senior Leadership Team and Audit and Governance Committee. This will include an improvement action plan. Any gaps in compliance will be reported within the Annual Governance Statement.
1.20 Where fraud or other financial crimes are identified, the Council will:
take immediate action when detection occurs
maintain a capability and capacity to investigate
make effective use of legislation and civil redress to ensure recovery
effectively collaborate with all other public sector organisations
publicise successful prosecutions