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HomeNews52% of BC’s public sector don’t have policies to support fraud risk...

52% of BC’s public sector don’t have policies to support fraud risk management

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The Office of the Auditor-General surveyed 140 BC public sector organizations on their fraud risk management practices and found them lacking.

BC’s Auditor General Michael Pickup said organizations could lose a lot of money if they didn’t put proper measures in place.

“The Association of Certified Fraud Examiners estimates that organizations could lose up to 5% of their revenue to fraud every year.”

Pickup’s report said of the 134 organizations that responded to the survey, 55% don’t conduct formal fraud risk management assessments.

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“It’s important to do that, and I would add that it’s probably never been more important than now,” said Pickup.

That being said, 91% have internal controls to prevent fraud.

But 57% of public sector organizations don’t have policies and procedures in place when fraud occurs, and of the 43% that do have policies in place, 60% of them don’t have directions on when to contact the police.

The report gave recommendations for government entities and outlined key areas for improvement:

  • Designing and implementing a formal fraud risk management policy.
  • Conducting a regular fraud risk assessment process.
  • Assessing the need for a fraud hotline and for staff to take fraud training.
  • Evaluating the effectiveness of internal controls designed to mitigate assessed
    fraud risks.
  • Establishing a compliance monitoring and reporting function.
  • Preparing procedures for staff to follow when potential incidents of fraud are identified.
  • Strengthening board oversight of fraud risk management and reporting to the board.
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