Corruption Matters - December 2020 | Issue 56
Getting the most out of your audit and risk committees
Audit and risk committees (ARCs) play a fundamental role in preventing, detecting and responding to fraud and corruption. The ICAC has released a paper to help public sector ARCs better safeguard their organisations.
A significant amount of corruption occurs because of poor internal controls, ineffective risk management, poorly planned and implemented fraud and corruption control strategies and inadequate audits. The ICAC’s paper, Dealing with Corruption, Fraud and the ICAC: the role of public sector Audit and Risk Committees, provides helpful and practical advice.
Ten ways that ARCs can better safeguard integrity and control fraud and corruption1. Obtain assurance that an agency’s fraud and corruption control framework meets or exceeds the minimum standards specified in NSW Treasury’s Fraud and Corruption Control Policy and ensure that the framework is periodically audited and reviewed. 2. Keep up-to-date on any guidance or better practice measures released by the ICAC. 3. Monitor an agency’s complaints-handling framework to ensure there is a robust system in place. For example, are high-quality investigations undertaken to investigate corruption, fraud and misconduct complaints? Have control improvements and prevention measures been implemented following the investigation? 4. Assist agency heads to ensure that internal audits cover key strategic, operational and project activities. 5. Ensure that the audit plan addresses key integrity, fraud and corruption risks and that individual audits assess the risk of fraud and corruption. 6. Ensure that assurance work performed across the agency, such as through external third parties, is coordinated and visible. 7. Improve risk management by assisting agency heads to ensure that the risk of fraud and corruption is assessed and managed in line with relevant standards and guidelines (for example, AS ISO 31000: 2018), that proposed fraud and risk treatments are implemented and that registers adequately cover the agency’s fraud and corruption risk. 8. Ensure that when activities are outsourced that the risk of corrupt conduct is still controlled not only by the agency but also by the contractor. In addition, corruption control frameworks should address outsourced activities. 9. Ensure that external auditors provide information related to suspected fraud and corruption, and any control weaknesses. 10. Seek assurance about the agency’s overall approach to managing probity. For example, monitoring patterns in probity issues and reviewing the implementation of probity recommendations. |
Did you know that the ICAC’s corruption prevention staff are available to advise any public sector ARC or ARC member requiring information about controlling fraud and corruption? Telephone on 02 8281 5999 or 1800 463 909, or email icac@icac.nsw.gov.au.
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