Until recently, most surveys on fraud in New Zealand focused on the private sector. In 2011, I commissioned PricewaterhouseCoopers (PwC) to carry out a survey on fraud awareness, prevention, and detection to gain better insight into fraud in the public sector.
PwC surveyed almost 2000 people working in the public sector, achieving a response rate of 74%. This response rate places the survey results among the most reliable information sources about perceptions and practices in detecting and preventing fraud in the public sector.
This report sets out for Parliament and public entities the main results of our survey along with other insights from local and international sources about fraud awareness, prevention, and detection. Overall, the results show a strong commitment within the New Zealand public sector to protecting public resources.
However, we cannot be complacent if we are to maintain our good record of keeping fraud at bay. It is particularly important to be vigilant in the current global economic climate, because there is an increased risk of fraud when people struggle to make ends meet. It is also important to remember that trusting staff is not a fraud control. Systems do not commit fraud, people do. Public entities need to ensure that they have the right systems in place.
We have already extensively analysed and reported the results of the survey to public entities and our auditors, with our recommendations for preventing and minimising fraud. In doing so, we have encouraged public entities to share information about fraud incidents. Public entities have been asked to take the simple step of informing their auditor quickly when they suspect that fraud has been committed. (The detailed fraud survey results are available on our website, www.oag.govt.nz/2012.)
Using the information that auditors receive from public entities, we will continue to regularly update and share information about the fraud incidents advised to us. Sharing information we can quickly minimise risks and limit losses, while working to strengthen and protect our sense of community and values.
Purpose
New Zealand generally has a "clean" image when it comes to fraud. We consistently rank highly in international and domestic surveys that measure public trust in government and the effectiveness of systems and processes that deal with fraud and corruption. We attribute the general absence of systemic large-scale corruption in the private and public sectors to the integrity of our standards and controls, underpinned by strong and shared common values within a small and cohesive society.
However, we cannot be complacent if we are to maintain our good record of keeping fraud at bay. It is particularly important to be vigilant in the current global economic climate, because there is an increased risk of fraud when people struggle to make ends meet.
Fraud always attracts a great deal of interest – irrespective of its scale. Invariably, questions are asked about how the fraud took place and whether the controls designed to stop fraud were operating effectively.
Until recently, most surveys of fraud in New Zealand focused on the private sector, and there had never been a fraud survey of the whole public sector. In 2011, the Auditor-General commissioned PricewaterhouseCoopers (PwC) to carry out a survey on fraud awareness, prevention, detection, and response to gain better insight into fraud in the public sector. This included finding out about:
- fraud risk factors;
- prevention, detection, and response mechanisms and awareness of these; and
- specific incidents of fraud.
The aim of this report is to provide you with the results of that survey. The results confirm a strong commitment within the public sector to protecting public resources.