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Fraud and Corruption Control Framework

Contents

1. Abbreviations and definitions 2

Abbreviations 2

Definitions 2

2. Introduction 2

3. Purpose 2

4. Scope 2

The Framework applies across the NSW Electoral Commission Staff Agency 2

The Framework integrates with the Fraud and Corruption Policy and annual work plans 3

The Framework is part of broader governance arrangements 3

5. The key elements of the fraud and corruption control framework 4

Attribute 1: Leadership 5

Attribute 2: The Commission’s Ethical Framework 5

Attribute 3: Responsibility structures 7

Attribute 4: Policy 8

Attribute 5: Prevention systems 9

Attribute 6: Fraud awareness 10

Attribute 7: Third party management systems 10

Attribute 8: Notification systems 11

Attribute 9: Detection systems 12

Attribute 10: Investigation systems 13

6. Quality assurance and continuous improvement 15

7. Associated documents 15

8. Relevant legislation, Government policy and guidance 15

9. Document control 15

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1. Abbreviations and definitions

Abbreviations

AONSW Audit Office of NSW

Comms Communications (Business Unit)

HR Human Resources (Business Unit)

ICAC Independent Commission Against Corruption

PID Public Interest Disclosure

Definitions

Fraud – Dishonestly obtaining a benefit by deception or other means. It is deliberate and involves the use of misrepresentations, dishonest or deceitful conduct in order to obtain some unjust advantage over another or to cause disadvantage to the Commission or others through actions, omissions or false statements. It includes the theft or improper use of the Commission’s resources and can be committed by employees or persons external to the Commission.

Corruption – Conduct of any person, whether or not an employee, that could adversely affect the honest and impartial exercise of official functions by a public official. It involves improper acts or omissions, improper use of influence or position, or improper use of information. It does not necessarily involve material gain for the perpetrator or material loss to the Commission.

Employee / staff member. These terms are used broadly throughout this document to include all ongoing, temporary and casual employees of the NSW Electoral Commission Staff Agency, as well as contract staff engaged directly or through contingent labour agencies. Note that the term Public Official, as defined in the ICAC Act 1988, is broader still, encompassing statutory appointments and any person engaged by or acting on behalf of a public authority.

2. Introduction

2.1 The New South Wales Electoral Commission recognises the threat of fraud and corruption, and is committed to taking a strategic approach to the prevention and detection of fraud and corrupt conduct perpetrated against the Commission.

2.2 The Fraud and Corruption Control Framework is based on the fraud prevention model described by Standards Australia and the Audit Office of NSW (AONSW). However, the model is designed to be adaptive so the Framework takes into account the Commission’s organisational structure and culture, and the challenges facing the public sector in general and the Commission in particular. It links policies, procedures and practices to create a holistic and complementary range of fraud and corruption countermeasures.

2.3 The Framework satisfies the requirements of Treasury Circular TC18-02 NSW Fraud and Corruption Control Policy.

3. Purpose

3.1 The primary purpose of this document is to describe the key elements of the Commission’s approach to the control of fraud and corruption.

4. Scope

The Framework applies across the NSW Electoral Commission Staff Agency

4.1 The systems set out in the Framework apply across the whole NSWEC Staff Agency.

4.2 This Framework aims to control:

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fraud committed against the NSW Electoral Commission and its Staff Agency

corrupt behaviour that adversely affects the exercise of official functions by a public official acting for the Commission.

4.3 The Framework does not address the control of fraud and corruption committed by political participants, in relation to democratic and electoral processes. Such fraud and corruption is covered by the separate policies and procedures developed and maintained by the Commission’s Funding Disclosure and Compliance Division.

The Framework integrates with the Fraud and Corruption Policy and annual work

plans

4.4 The Fraud and Corruption Policy is a high-level document that establishes the Commission’s commitment to minimise fraud and corruption and to initiate investigations of any allegations or suspicions of fraud and corrupt behaviour.

4.5 The Framework describes the elements of the system to put the Commission’s commitment into action.

4.6 Annual fraud and corruption control plans set out programs of work to improve the fraud and corruption control environment that is described in the Framework.

The Framework is part of broader governance arrangements

4.7 Fraud and corruption control is part of a broader system of policies, procedures and processes that promote sound governance at the NSW Electoral Commission.

4.8 Governance is defined as “those high-level processes and behaviours that ensure an agency performs by achieving its intended purpose and conforms by complying with all relevant laws, codes and directions and meets community expectations of probity, accountability and transparency”1.

4.9 The Commission’s governance framework includes:

Sound leadership

Corporate, divisional and initiative plans

Regular reporting against plans

Clear accountabilities and delegations

Key governance committees, including an executive committee and the Audit and Risk Committee

Sign-off on internal controls

Disclosure of information through reports, the proactive release of information on web sites and an information access system

Internal and external audits

Legislative and regulatory compliance systems

Stakeholder engagement

Codes of Conduct

Systems to manage conflicts of interest, other paid employment, and gifts & benefits

Internal reporting processes

Privacy management plan

Records management system

Work Health and Safety systems

1 NSW Auditor Generals’ Report to Parliament | Volume One 2015 | Governance Lighthouse – Strategic Early Warning System

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Staff performance and development programs

Diversity and inclusion policies and practices

Workforce planning

Project, Program and Portfolio Management and governance arrangements

A risk management system

The fraud and corruption control framework.

5. The key elements of the fraud and corruption control framework

5.1 A brief summary of the elements of the Framework is set out in the NSWEC Fraud and Corruption Policy. A more detailed description is provided below.

5.2 The Framework is based on:

The ten attributes of fraud control identified in the Audit Office of NSW Fraud Improvement Kit – Managing your fraud control obligations

The Australian Standard AS8001-2008 Fraud and Corruption Control.

5.3 The Executive Director Corporate is responsible for the implementation and monitoring of the Commission’s fraud and corruption control framework.

5.4 Oversight of the implementation of controls, minimisation and mitigation strategies and the promotion of ethical behaviour are undertaken by the Commission’s executive team and the Audit and Risk Committee.

5.5 The ten attributes of fraud control identified by the Audit Office of NSW can be categorised into three main themes: Prevention, Detection and Response.

Figure 1 – Fraud and Corruption Control Themes

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5.6 This document is structured around the ten fraud control attributes, which align with the themes of Prevention, Detection and Response as shown below.

Attribute Theme

Attribute 1 Leadership Prevention

Attribute 2 Ethical framework Prevention, Detection, Response

Attribute 3 Responsibility structures Prevention, Detection, Response

Attribute 4 Policy Prevention

Attribute 5 Prevention systems Prevention

Attribute 6 Fraud Awareness Prevention, Response

Attribute 7 Third party management systems Prevention, Response

Attribute 8 Notification systems Detection, Response

Attribute 9 Detection systems Detection

Attribute 10 Investigation systems Response

Figure 2 – The Fraud and Corruption Framework

Attribute 1: Leadership

5.7 The responsibility for leadership in the prevention of fraud and corrupt conduct sits with the Commissioner and executive team. However, all staff members in the Commission have a role to play in effective fraud and corruption prevention.

5.8 The Commissioner and the Senior Executive Committee consider fraud and corrupt conduct to be serious threats to the Commission. The Commission therefore allocates considerable resources to managing this risk.

Attribute 2: The Commission’s Ethical Framework

5.9 The Commission has established an ethical framework of policies, procedures and resources to support ethical decision-making and behaviour in the agency.

5.10 The elements of the ethical framework are set out in the table below.

Component of the ethical framework

Descriptions and links

Our Values

Integrity

Trust

Service

Accountability

The Commission has adopted the government sector core values set out in Section 7 of the Government Sector Employment Act 2013.

The values are expressed in the NSWEC 2017-20 Strategic Plan, they are covered in new employee on-boarding and are included in the Statement of Business Ethics.

Code of Conduct

The NSWEC Code of Conduct sets out the behavioural expectations of all staff.

All staff members are required to declare that they have read and understood the Code before commencing with the NSWEC.

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Component of the ethical framework

Descriptions and links

Conflicts of Interest processes

A conflict of interest exists when it is likely an employee could be, or could be perceived to be, influenced by a personal interest in carrying out public duties.

The Code of Conduct sets out provisions for the disclosure of any conflict of interest.

Conflicts of interest are also managed through the following policies, procedures and processes:

Recruitment Procedures Guideline

Employment of Election Officials and Office Assistants Policy

Employment of Relatives and Friends as Casual Employees Policy

Contingent Worker and Contractors Engagement Policy

Statement of Business Ethics

Business Ethics Confidentiality and Compliance Agreement for Contractors

Confidentiality and Compliance Agreement for Service Providers

Code of Conduct for Election Officials – Quick Reference Guide

Casual Employment with the NSWEC Procedure

Complaints Handling Policy

Penalty Notice and Caution Procedures

Various procurement framework documents

Managing gifts and benefits

Processes for managing offers of gifts and benefits are outlined in the Code of Conduct. Gifts or benefits are not to be solicited by staff members and any offer of a gift or benefit is to be refused and disclosed using the Gift Declaration Form except where the gift is of token value.

The Statement of Business Ethics also provides that contractors and agents acting on behalf of the NSWEC are to manage gifts and benefits in the same way.

Other paid employment process

The Code of Conduct provides that staff members need to apply to the Electoral Commissioner for approval, prior to engaging in any other paid employment.

Misconduct

Misconduct involves improper, wrong or potentially unlawful conduct that is outside of policy, directions or the law. Misconduct is dealt with in section 69 of the Government Sector Employment Act 2013 and is managed by the NSWEC in accordance with Clauses 37 to 41 of the Government Sector Employment Rules 2014.

Public Interest Disclosures

People who work in the public sector are usually best placed to know when a colleague is doing the wrong thing, systems aren’t working properly, or a public authority is wasting public funds. The Public Interest Disclosures Act 1994 (PID Act) sets in place a system to encourage public officials to report serious wrongdoing.

The Public Interest Disclosures (PID) Policy sets out the NSWEC internal process for handling reports of wrongdoing that are public interest disclosures.

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Attribute 3: Responsibility structures

5.11 The following table outlines individual and team responsibilities and accountabilities for the control of fraud and corrupt conduct.

Person / team Responsibilities and accountabilities

NSW Electoral Commissioner

The Electoral Commissioner has ultimate accountability for the establishment and maintenance of effective fraud and corruption controls at the NSWEC.

The Commissioner demonstrates leadership and sets the ‘tone at the top’.

As the Principal Officer of the agency, the Commissioner is able to receive reports of wrongdoing under the provisions of the PID Act.

Senior Executive Committee and other executives

The senior executives also contribute to the ‘tone at the top’ and champion the control of fraud and corruption in their divisions and business units.

Through the budgeting process, the executives ensure that adequate resources are made available for fraud and corruption control.

The executives participate in the fraud and corruption risk assessment process to ensure that fraud and corruption risks in their business areas are identified, assessed and controlled.

Executive Director Information Services The ED Information Services ensures that adequate risk-based controls are in place in information systems to minimise the risk of fraud and corrupt behaviour.

Director Finance (Chief Financial Officer) The CFO ensures that effective risk-based controls are in place for financial management and procurement processes.

Director Human Resources

The Director HR supports the development and maintenance of internal reporting processes, including those relating to Public Interest Disclosure management.

The Director HR also supports staff training and awareness of fraud and corruption risks and controls.

Director Communications The Director Comms supports the development and implementation of staff communications relating to fraud and corruption risk and control.

Manager Governance (Chief Risk Officer)

The Manager Governance works with stakeholders to develop and maintain the Fraud and Corruption Policy, Control Framework and annual work plans.

The Manager Governance and Governance team members also act as Disclosure Officers under the PID Act.

The internal audit function The Commission’s IA program undertakes a program of risk-based audits and reviews that include consideration of fraud and corruption risks across the organisation.

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Person / team Responsibilities and accountabilities

External Audit (Audit Office of NSW)

The AONSW audit of the NSWEC annual financial statements considers the risks of fraud and corruption on the quality and completeness of financial information. AONSW also considers and comments on the adequacy of internal controls more generally.

Audit and Risk Committee

In accordance with the ARC Charter, the Committee will:

review the NSWEC's fraud and corruption control plan and be satisfied that the NSWEC has appropriate processes and systems in place to capture and effectively investigate fraud and corruption related information.

review whether management's approach to maintaining an effective internal control framework, including over external parties such as contractors and advisors, is sound and effective

consider how management identifies any required changes to the design or implementation of internal controls

review whether management has taken steps to embed a culture which is committed to ethical and lawful behaviour and how effective these have been

receive reports from management on all suspected and actual frauds, thefts and breaches of law.

Public Interest Disclosure officers

PID Officers are responsible for receiving, forwarding and/or acting upon disclosures in accordance with the PID Act and the NSWEC PID Policy.

All staff members

All staff members should have a base-level understanding of fraud and corruption risks and the fraud and corruption control framework.

All staff members are responsible for working ethically and within the provisions of the Code of Conduct and the legal and regulatory framework.

Staff members have a legal obligation to report any actual or suspected fraud and corrupt conduct.

Attribute 4: Policy

5.12 The Commission has an overarching Fraud and Corruption Policy, which:

emphasises the Commission’s zero tolerance for fraud and corruption

outlines the elements of the Fraud and Corruption Control Framework

5.13 The Policy has been approved by the Electoral Commissioner and is available to all staff members through the Policy Library.

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Attribute 5: Prevention systems

5.14 Fraud and corrupt conduct could potentially occur in many areas of operation within the Commission, including any area where a person supplies or receives goods or services, has access to resources or information, makes significant decisions, or takes action that affects members of the public. Therefore, Commission staff members must be aware that the risk of fraud and corruption can arise almost anywhere.

5.15 Examples of the Commission’s prevention systems include:

Controls in the finance, human resource and payroll IT systems, including segregation of duties and delegations attached to roles

Robust and transparent procurement processes

Effective HR systems, including recruitment processes that require collaboration and approval

Regular messages to all staff from senior executives that reinforce a strong anti-corruption message.

Fraud and Corruption Risk Assessment

5.16 The Governance team conducts regular fraud and corruption risk assessments across all of the Commission’s divisions.

5.17 The risk assessment is aligned with the Commission’s Risk Management Policy and includes:

identification of the particular forms of fraud which can occur in each division

analysis of the likelihood of those threats occurring

analysis of the consequences should the fraud occur

identification of the controls in place to prevent the fraud occurring and to correct the fraud should it occur

assessment of the effectiveness of those controls

risk treatment to deal with any unacceptable residual fraud risk.

5.18 The risk assessment is based on guidance from the AONSW and covers the following high risk activities:

Managing people

Managing money

Managing information

Third party management

Managing services and products

Managing assets

Pre-Employment Screening

5.19 The Commission conducts pre-employment screening of staff to reduce the risk of internally generated fraud and corrupt conduct.

a. All temporary and ongoing employees are subject to a criminal background check prior to finalisation of offer of employment.

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b. NSWEC also requires contractors engaged through contingent labour contracts to go through a criminal background check.

c. More stringent security vetting may be required of staff and contractors working in particularly sensitive roles.

Attribute 6: Fraud awareness

5.20 Fraud and corruption awareness is referenced in induction training for new employee onboarding.

5.21 Fraud and corruption control is a theme in the NSWEC Code of Conduct, which all new employees have to read and acknowledge before commencement.

5.22 A fraud and corruption control communications program, and online learning module, are being developed by Legal and Governance, in collaboration with HR, Comms, Finance and Information Services.

Attribute 7: Third party management systems

Targeted training and education for key staff

5.23 Staff members with frequent involvement in procurement participate in procurement training that includes awareness and control of fraud and corruption.

5.24 Fraud and corruption awareness training will be expanded to include other staff members, with a focus on staff in the Funding, Disclosure and Compliance Division who frequently engage with third parties such as political lobbyists, donors, third party campaigners and party agents.

Tendering processes

5.25 Tendering processes are conducted in accordance with the NSW procurement policy framework https://www.procurepoint.nsw.gov.au/system/files/documents/procurement_policy_framework_-_july_2015_0_1.pdf. In short:

goods and services under $5,000 can be procured from any supplier

between $5,000 and $30,000 whole of government arrangements (including prequalification scheme), or one written quote is obtained if there is no whole of government arrangement

between $30,000 and $150,000 whole of government arrangements are used, with three written quotes

over $150,000, excluding contingent workforce and Executive Search, a competitive approach to market (tender process) is used to identify the optimum provider and:

o a Procurement Plan and Strategy is developed and;

o procurement processes are documented and traceable

5.26 Any changes in the Board Directions are included in NSWEC procedures.

Tendering/Request for Quote

5.27 Potential suppliers are required to accept the NSWEC Standard Terms and Conditions (which are in line with NSW procurement policy and scheme / panel conditions), prior to submitting a response to a tender or a request for quotation through the eQuote system. These terms and conditions include an agreement to comply with the NSW Government Code of Practice for Procurement including declaring and/or managing any corrupt conduct as well as any potential, perceived or actual conflicts of interest that may arise.

Third party due diligence and clear contractual obligations and accountabilities

5.28 All vendors and third parties that deliver services on the Commission’s behalf are subject to due diligence before engagement.

5.29 Contracts and service level agreements include clear accountabilities for managing the risk of fraud and corruption.

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Vendor checks before loading into finance system master data

5.30 The registration of vendors in the I-POS system is centralised in the Finance Business Unit. Business units initiate requests which are then subject to detailed review, to ensure that robust controls are in place to reduce fraud risk.

Contract management systems

5.31 Most high-value contracts are created and managed in the I-POS System. The NSWEC uses State Government standard contracts for schemes and panels whenever possible. Where a whole-of-government arrangement does not exist, the contract development is oversighted by the Office of the Electoral Commissioner.

5.32 In all cases, suppliers must comply with the NSW Government Code of Practice for Procurement including declaring and/or managing any corrupt conduct as well as any potential, perceived or actual conflicts of interest that may arise. Similarly, supplier performance is monitored during the contract / agreement term, in accordance with applicable policies, procedure and legislation. Any unsatisfactory performance is taken into account when considering future opportunities for engagements with NSW Government agencies.

5.33 NSWEC engages independent third parties from time to time on project evaluation teams, as probity advisors and financial advisors. These independent parties are often sourced from other NSW Government agencies such as the Department of Finance, Services and Industry.

5.34 NSWEC declares all contracts above $150,000 in value on the NSW Government eTendering website.

Third party awareness

5.35 In accordance with Procurement Board Directive PBD-2014-01 Dishonest, unfair, unconscionable, corrupt or otherwise illegal conduct by suppliers, the Commission ensures that its procurement processes require suppliers to comply with relevant standards of behaviour.

5.36 The NSWEC Statement of business ethics sets expectations and mutual obligations with third parties, including:

reporting mechanisms established for reporting suspected fraud and corruption

contractors and suppliers encouraged to provide information if they suspect fraud or corruption is occurring.

Staff disclosure of conflicts of interest and secondary employment

5.37 As noted above, systems are in place for the disclosure of conflicts of interest and other paid employment.

Attribute 8: Notification systems

Notification Systems – Internal avenues

5.38 Any notifications of suspected fraud and corruption will be taken seriously and acted upon in accordance with relevant policies and procedures.

5.39 Staff members are encouraged to report any actual or suspected wrongdoing to their manager, director or executive director. Other avenues for reporting are available if the manager, director or executive director are the subject of the report.

5.40 If staff members are concerned about the risk of reprisal, they can make a report with protections afforded by the Public Interest Disclosures Act 1994. Staff are encouraged to consult the PID Policy for information about how to report any suspected wrongdoing. The PID Policy outlines internal and external reporting channels available to staff should they suspect serious wrongdoing within the NSWEC.

5.41 Internal avenues for reporting wrongdoing will be improved over time, to make it easier for staff members to make reports.

When will a report be a Public Interest Disclosure?

5.42 For a report to be considered a Public Interest Disclosure and to receive the legal protections afforded by the PID Act it must satisfy the requirements of the PID Act.

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5.43 The requirements include:

The report is about corrupt conduct, maladministration, serious and substantial waste of public money and/or government information contravention

The person making the disclosure honestly believes, on reasonable grounds, that the information shows or tends to show the alleged wrongdoing

The report has to be made to a person who is authorised to receive the report. It must be made to one of the following roles:

o Principal Officer

o Disclosure Managers and Disclosure Coordinators

o Disclosure Officers.

These are described in the PID Policy and contact details are available on the intranet.

Notification Systems – External avenues

Where staff do not wish to make a disclosure internally, they may make a disclosure to any one of the following investigating authorities as described in the PID Policy:

The Independent Commission Against Corruption – for corrupt or fraudulent conduct

NSW Ombudsman – for serious maladministration

NSW Auditor-General – for serious and substantial waste

NSW Information Commissioner – for disclosures about a government information contravention.

Attribute 9: Detection systems

5.44 The NSWEC has implemented systems aimed at detecting fraud and corrupt conduct, including the following:

Requirement that at least two consecutive weeks of leave are taken by a staff member every twelve months

Risk focused internal controls (based on risk assessments performed)

Regular analysis of expenditure against budget to identify trends

Internal audits targeting high risk areas

Transaction monitoring / analytics (refer below).

Internal controls

5.45 The internal controls that the NSWEC has developed and implemented assist in protecting against the risk of fraud and corrupt conduct. These internal controls are:

Based on risk assessments

Documented in the current control and mitigation strategies for the corporate risk register and relevant Divisional risk registers

Documented in business unit-specific procedures

Subject to a process of continuous improvement.

Data monitoring and analytics

5.46 Work is underway to develop a program of data monitoring and analytics to detect potentially fraudulent transactions such as:

Payroll

o Ghost employees

o Duplicate bank details

Financial statement close

o Manual journal postings/adjustments

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o Journals not balancing to 0

o Journals posted after hours

Payments analysis

o Adherence to limits

o Benford’s Law analysis

o Trend analysis

Accounts payable

o Weekend payments

o Payments to unauthorised vendors

o Related party transactions

Internal Audit

5.47 Internal Audit is the third line of defence in the Commission’s control environment (with Line 1 consisting of management and front line process controls, and Line 2 consisting of the oversight by the governance [compliance and risk management] functions).

5.48 Internal audit activities often consider the risk of fraud and corrupt conduct. This includes data mining, internal audit program reviews, risk register monitoring and systemic reporting by the Chief Audit Executive.

5.49 The Commission’s Internal Audit function will develop the capacity to regularly examine samples of medium and high risk processes across the Commission to detect irregularities. Outcomes of internal audit activities will be reported to the Audit and Risk Committee.

Attribute 10: Investigation systems

5.50 All allegations of actual or suspected fraud or corrupt conduct will be investigated.

5.51 Expert external investigation resources will be engaged if needed, e.g., forensic accountancy services.

5.52 Any mandatory referrals will be made to external investigation bodies (see below)

Misconduct systems

5.53 Misconduct involves improper, wrong or potentially unlawful conduct that is outside of policy, directions or the law. It usually involves an allegation of an employee’s act or omission arising from negligence or with intent. Serious allegations or incidents where the facts are unclear are more likely to be considered as allegations of misconduct. Examples include assault, theft, blatant disregard for policies, or other serious actions that may require investigation.

5.54 Misconduct is dealt with in section 69 of the Government Sector Employment Act 2013 and is managed by the NSWEC in accordance with Clauses 37 to 41 of the Government Sector Employment Rules 2014.

5.55 If misconduct is confirmed, the resulting action may include any of the following:

terminate the employment of the employee (without giving the employee an opportunity to resign)

terminate the employment of the employee (after giving the employee an opportunity to resign)

impose a fine on the employee (which may be deducted from the remuneration payable to the employee)

reduce the remuneration payable to the employee

reduce the classification or grade of the employee

assign the employee to a different role

caution or reprimand the employee

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Referral to external parties

5.56 The Commission has legal obligations to report certain matters externally. This includes external reporting to the NSW Police Force, the ICAC, the Audit Office of NSW and the NSW Ombudsman.

NSW Police Force

5.57 The Commission has an obligation to inform the NSW Police Force when any criminal offence including fraud occurs. There is no discretion in this matter.

5.58 Section 316 of the Crimes Act 1900 provides that, “anyone who knows or believes that (an) offence has been committed … and without reasonable excuse fails to bring that information to the attention of a member of the Police Force or other appropriate authority … is liable for imprisonment for two years.”

The Independent Commission Against Corruption (ICAC)

5.59 The Commission is committed to reporting all suspected corrupt conduct to the ICAC.

5.60 Section 11 of the ICAC Act 1988 requires the principal officer of a public agency to report possible corrupt conduct to the ICAC. The Electoral Commissioner has that duty in relation to the Electoral Commission Staff Agency.

The Audit Office of NSW

5.61 The Commission has an obligation under the Public Finance and Audit Act 1983 to report discrepancies of serious proportions to the Audit Office of NSW, as they may affect the annual audit and certification of the Commission’s financial statements.

5.62 Early notification will allow the Auditor to re-appraise the conduct of the annual external audit. Late or no notification could result in an unfavourable audit opinion or delay signing the financial statements.

The NSW Ombudsman

5.63 A report must be provided to the Ombudsman for each six month period regarding statistical information on the Commission's compliance with obligations under the PID Act.

5.64 In addition, as a 'designated agency' the NSW Ombudsman must be informed of:

any sexual offence or sexual misconduct committed against, with or in the presence of a child - including a child pornography offence

any assault, ill-treatment or neglect of a child

any behaviour that causes psychological harm to a child – even if the child consented to the behaviour.

Recovery of Proceeds

5.65 The Commission actively pursues the recovery of any money or property lost through fraud or corrupt conduct, provided there is a strong prospect of a net benefit to the Commission from such action.

Internal Control Review Following any Detection of Fraud

5.66 To ensure that any control weaknesses are addressed, Finance will perform a review of the internal control environment after any incident of fraud. The Legal and Governance Business Unit should be informed and consulted prior to performing the review.

Insurance

5.67 The Commission’s insurance is provided by the Treasury Managed Fund (TMF), which is the NSW Government’s self-insurance scheme. The insurance coverage provided is the standard high level of insurance cover provided to all TMF agencies per the Statement of Cover.

5.68 Clause 7 of the Statement of Cover sets out the miscellaneous categories of loss for which the Commission is covered. Clause 7.1 ‘Fidelity’ refers to losses sustained through any fraudulent or dishonest acts committed by people in the Commission’s service, and losses resulting directly from a computer virus, the fraudulent input, modification, or destruction of any electronic data stored in any computer/communication system. Clause 7.2 ‘Unauthorised Actions’ refers to losses directly caused by people in the Commission’s service acting in excess of permitted financial limits or otherwise acting outside their authority.

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6. Quality assurance and continuous improvement

6.1 Fraud and Corruption Control Plans outline programs of work that will be undertaken each year to improve the Commission’s fraud and corruption control environment. The programs of work involve staff members across a number of divisions and business units including Legal and Governance, Human Resources, the Portfolio Management Office, Communications, Finance, and Information Services.

6.2 The Fraud and Corruption Control Framework will be amended from time to time, as the Commission’s control environment changes.

6.3 An external assessment of the Commission’s fraud and corruption control environment will be conducted at least once every three years by qualified, independent assessors.

7. Associated documents

Refer to Fraud and Corruption Policy

8. Relevant legislation, Government policy and guidance

Refer to Fraud and Corruption Policy

9. Document control

Document management

Approved by: Signature: Date approved:

John Schmidt NSW Electoral Commissioner

Executive Director Review: Signature: Date approved:

Matt Phillips Executive Director, Corporate

Line Manager Review: Signature: Date approved:

Mel Keenan Director Legal and Governance

Publication details

Document Type: ☐ Policy ☒ Standard ☐ Procedure ☐ Guidelines

Responsible Business Unit: Legal and Governance

Author: Neil Pfister Manager Governance

Revision record

Date Version Revision description

21 August 2018 1.0 Approved version

11 December 2018 1.1 Minor edits suggested by Audit and Risk Committee

Publication:

☐ Not for publication

☐ Internal catalogue

☐ Intranet only

☐ Intranet and website

New South Wales Electoral Commission | GPO Box 832, Sydney NSW 2001

Tel: (02) 9290 5999 | Fax: (02) 9290 5999 | Email: policycoordinator@elections.nsw.gov.au | www.elections.nsw.gov.au Page 16 of 16

Next review date

This Framework will be reviewed within three years of approval, or sooner if needed.