Counter Fraud Sanctions Policy
Contents
- 1.0 Introduction
- 2.0 General policy principles
- 3.0 Financial investigation
- 4.0 Sanction recommendations, approvals and authorisations
- 5.0 Role of the Council's Legal Services
- 6.0 Role of Internal Audit
- 7.0 Sanction application
- 8.0 Recovery of losses
- 9.0 Policy review
1.0 Introduction
The Council's Counter Fraud Policy commits to:
- Ensuring the people and communities of Bradford District have complete confidence that the Council's affairs are conducted in accordance with the highest standards of probity, honesty, integrity and
- A zero tolerance to fraud and
- Combating fraud and corruption wherever it may arise in relation to any of the Council's activities or services
- Where fraud or corruption is detected rigorously pursuing appropriate action against the perpetrators ensuring consistency, fairness and objectivity and compliance with appropriate legislation and Council
The Council's Counter Fraud Strategy for the financial years 2023 to 2025, commits to demonstrating a robust anti fraud response and developing capability and capacity to punish offenders.
This Counter Fraud Sanction policy, therefore, sets out how the Council will apply sanctions and/or pursue criminal action, through the Courts, against those who commit offences of fraud, corruption, theft or other financial irregularity against the Council.
The objectives of this policy are to ensure that sanctions are applied in a fair and consistent manner and that the sanction decision making process is stringent, robust and transparent.
The principles of the policy will apply equally to any fraud corruption, theft or other financial irregularity against the Council or against funds for which the Council has responsibility.
2.0 General policy principles
Where fraud, corruption, theft or other financial irregularity is suspected then the Council will take immediate action to thoroughly investigate and if proven will apply the appropriate sanction, which may include a prosecution through the Criminal Courts.
Any case that is subject to investigation is considered on its own merits, having regard to all the facts, before an appropriate sanction is administered.
All investigations into fraud, corruption, theft or other financial irregularity will be undertaken by the Council's Corporate Investigations Unit (CIU), within the Department of Corporate Resources and will be in accordance with relevant legislation, Council Policy and advice and guidance from the Council's Legal Services and, where appropriate, Human Resources.
All Corporate Investigators will be fully trained in undertaking criminal investigations into allegations of fraud, corruption, theft or other financial irregularity and will possess an appropriate Counter Fraud qualification. They will conduct investigations in a professional manner, ensuring that policy and legislation and approved working methods are correctly applied. They will consider each investigation on its own merits and will not let political or personal views about ethnic or national origin, sex, religious beliefs, or the sexual orientation of the suspect, victim or witness influence their actions and will not be affected by improper or undue pressure from any source.
The Council will work with the Police and any other Government enforcement bodies as is appropriate
3.0 Financial investigation
Financial Investigation is an important tool in the fight against crime and it can provide valuable new avenues for investigations by forensically analysing the finances that relate to criminal activity.
The Proceeds of Crime Act (POCA) 2002 is the primary legislation used in financial investigation and was created with the aim of removing assets from criminals, recovering the proceeds of crime and deterring and disrupting criminality. It confers a range of investigative powers as well as powers to restrain and confiscate criminal assets, via criminal confiscation, civil recovery, cash forfeiture and criminal taxation.
Where an investigation into fraud, corruption, theft or other financial irregularity is considered to be likely to result in a conviction, the CIU will refer all suitable cases to West Yorkshire Joint Services for financial investigation (normally, but not limited to, those cases where the estimated loss is £5,000 or more) with a view to recovering monies, or property, obtained as a result of criminal activity or criminal lifestyle.
4.0 Sanction recommendations, approvals and authorisations
Relevant Officers, exercising delegated authority given by the Council's Section 151 Officer will recommend, approve and authorise the commencement of criminal proceedings and/or applications for confiscation and /or restraint orders under POCA, or apply "alternative to prosecution" sanctions.
5.0 Role of the Council's Legal Services
A key partner in the Council's counter fraud approach providing specialist advice, support and services to the CIU, ensuring compliance with all relevant legislation pertaining to the prevention, detection and investigation of fraud, corruption and theft (for example the Police and Criminal Evidence Act 1984, Criminal Procedures and Investigations Act 1996, Regulation of Investigatory Powers Act 2000, Data Protection Act 2018 the General Data Protection Regulations, Proceeds of Crime Act 2002 and Fraud Act 2006.
In addition to the above the Council has a general power, under section 222 of the Local Government Act 1972, to bring legal proceedings before the Court where the "Local Authority considers it expedient for the promotion or protection of the interests of the inhabitants of their area".
The Council's Legal Services team will ensure that prosecution proceedings will only be issued after having due regard to the CPS Code of Practice and the Council's Sanctions policy. As such prosecution proceedings will only be issued where there is sufficient and admissible evidence to provide a realistic prospect of conviction and where the prosecution is in the public interest.
The Code of Practice requires the decision to prosecute to be kept under continuous review, so that any new facts or circumstances, in support of or undermining the Council's case, are taken into account in the Council's decision to continue or terminate the proceedings.
6.0 Role of Internal Audit
The CIU will work closely with the Internal Audit Service (IAS), to ensure that, where an irregularity or fraud occurs, the appropriate controls are in place, weaknesses are identified and recommendations made to improve the Council's control environment.
7.0 Sanction application
The Council has a range of sanctions that can be applied to those who commit offences of fraud corruption, theft or other financial irregularity. These include formal cautions or financial penalties, criminal proceedings in a Court and/or disciplinary action, where a Council employee has committed the offence.
The Council will, in certain circumstances, take more than one form of action. For example, where an employee has committed offences of fraud, corruption, theft or other financial irregularity then disciplinary, criminal prosecution and civil recovery action may be appropriate, however the sanction decision will consider every case on its own merits, taking into account factors, such as a person's physical and mental health, their age, financial circumstances and, in considering prosecution as a first option, whether it is in the public interest in addition to assessing the overall impact of the punishment to both the individual and the community.
It should be noted that this Sanction Policy document does not cover disciplinary matters relating to Council employees. Such disciplinary matters fall under the Council's own disciplinary policy, "Fairness at Work".
To ensure a consistent and equitable application of sanctions, the Council will normally apply the following guidelines:
Formal Caution
This is an administrative sanction offered in certain circumstances, as an alternative to prosecution.
A Formal Caution is normally offered by way of a face to face interview at Council offices and if accepted then the person is admitting to the offence and will be required to sign the appropriate document(s) which will be retained by the Council.
Once a formal caution has been accepted then the Council will not institute criminal proceedings for that offence, however, should the person commit other subsequent similar offences against the Council then a prosecution may be considered as the first option for that subsequent offence.
Where a formal caution is not accepted or the person fails to respond to invitations to be offered such a sanction then the Council will consider instituting criminal proceedings.
Offences of fraud, corruption or theft or other financial irregularity
Offences relating to Council Tax Reduction (CTR) Scheme
The Council will normally only consider offering a formal caution when all of the following apply:
- The loss or potential loss to the Council is less than £5,000
- The offence has been admitted at an interview under caution.
- The offence has not been deliberate, planned or committed over a long period of time.
- The person has not committed any similar offences against the Council in the last 5 years.
- The "Evidential Test" is satisfied (i.e. The Council considers there is sufficient evidence to provide a realistic prospect of conviction).
Where the offence has not been admitted during an interview under caution, but all the other criteria have been met, a decision will be made in conjunction with the Council's Legal Services as to whether a formal caution is appropriate.
Where the offence is subject to a financial penalty but this will cause severe hardship the Council can consider a formal caution as the first
Offences of wrongful use of a Disabled Persons badge
The Council will normally only consider offering a formal caution when all of the following apply:
- The offence has been admitted at an interview under caution when reasonable mitigation has been offered and accepted.
- The offence has not been deliberate, planned or committed over a long period of time
- The person has not committed a similar offence in the last 5 years.
- The "Evidential Test" is satisfied (i.e. The Council considers there is sufficient evidence to provide a realistic prospect of conviction).
Financial Penalty
This is a fine, offered in certain circumstances, as an alternative to prosecution. Where a fine is not accepted or the person fails to respond to invitations to be offered such a sanction, then the Council will consider instituting criminal proceedings.
A fine is normally offered by way of a face to face interview at a Council building and if accepted then the person will be required to sign the appropriate document(s) which will be retained by the Council. A signed copy will be given to the person at the time of interview.
Once a fine has been accepted then the Council will not institute criminal proceedings for that offence, however, should the person commit other subsequent similar offences against the Council then a prosecution may be considered as the first option.
Offences of fraud, corruption, theft or other financial irregularity
The Council will not consider offering fines as an alternative to prosecution for this type of offence.
Offences relating to Council Tax Reduction (CTR) Scheme
The Council will normally only consider offering a financial penalty when all of the following apply:
- The loss or potential loss to the Council is less than £5,000
- The offence has not been deliberate, planned or committed over a long period of time.
- The person has not committed any similar offences against the Council in the last 5 years.
- The "Evidential Test" is satisfied (i.e. The Council considers there is sufficient evidence to provide a realistic prospect of conviction).
Where the Council considers applying a financial penalty, as a first option, and this would cause severe hardship then a formal caution will be considered.
The financial penalty will be calculated based on 50% of the extra CTR received (rounded down to the nearest whole penny) with a minimum penalty of £100 and a maximum of £1000*
* in accordance with the Local Government Finance Act 1992 (as amended by the Council Tax Reduction Schemes (Detection and Fraud Enforcement)(England)Regulations 2013)
Offences of wrongful use of a Disabled Persons badge
The Council will not consider offering fines as an alternative to prosecution for this type of offence.
Prosecution
Offences of fraud, corruption, theft or other financial irregularity
The Council will normally only consider instituting criminal proceedings when all of the following apply:
- The loss or potential loss to the Council exceeds £5,000.
- The "Evidential Test" is satisfied (i.e. The Council considers there is sufficient evidence to provide a realistic prospect of conviction).
- The Public Interest test is satisfied. (i.e. The Council has considered the public interest factors in determining whether to prosecute or consider an "alternative to prosecution").
Some exceptions to this are (not an exhaustive list):
- A formal caution has been offered and refused.
- There are known previous convictions for fraud related offences against the Council.
- The offence has been deliberate, planned, committed over a long period of time or involved more than one person.
Offences relating to the Council Tax Reduction (CTR) Scheme
The Council will normally only consider instituting criminal proceedings when all of the following apply:
- The loss or potential loss to the Council exceeds £5,000.
- The "Evidential Test" is satisfied (i.e. The Council considers there is sufficient evidence to provide a realistic prospect of conviction)
- The Public Interest test is satisfied. (i.e. The Council has considered the public interest factors in determining whether to prosecute or consider an "alternative to prosecution").
Some exceptions to this are (not an exhaustive list):
- A formal caution or fine has been offered and refused
- There are known previous convictions for Council Tax related offences
- The offence has been deliberate, planned, committed over a long period of time or involved more than one person.
Offences of wrongful use of a Disabled Persons badge
The Council will normally only consider instituting criminal proceedings as a first option when all of the following apply:
- The offence has not been admitted at an interview under caution or the mitigation offered has not been accepted by the Council.
- The "Evidential Test" is satisfied (i.e. The Council considers there is sufficient evidence to provide a realistic prospect of conviction).
- The Public Interest test is satisfied (i.e. The Council has considered the public interest factors in determining whether to prosecute or consider an "alternative to prosecution").
Some exceptions to this are (not an exhaustive list):
- A formal caution has been refused
- There are known previous convictions for Blue Badge related offences
- The offence has been deliberate, planned, committed over a long period of time or involved more than one person.
8.0 Recovery of losses
Where the Council has suffered a financial loss arising from offences of fraud, corruption, theft or other financial irregularity including CTR offences then it will make vigorous attempts to recover the resultant loss, including taking action in the Civil Courts if necessary, in addition to any sanction that may be imposed in respect of that offence.
In cases where the loss to the Council is estimated to be in excess of £5,000 then the Council will consider instigating a financial investigation – see para 3.0.
9.0 Policy review
This policy will be reviewed every 3 years.
Reviewed by: Head of Service - Corporate
Date: 26 October 2022
Notes: Minor changes to formatting and introduction content to align with new counter fraud framework.
Next review: January 2025
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