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Clearly define decision-making powers

Type of countermeasure

This is a prevention countermeasure. Prevention countermeasures are the most common and cost effective way to stop fraud. They prevent or limit the size of the fraud risk by reducing the likelihood and consequences of fraud.

Summary

Clearly document decision-makers using delegations, authorisations and instructions. Clearly defined decision-making powers increase transparency and reduce the opportunity for fraud and corruption.

Why this countermeasure matters

A lack of clarity for decision-making powers can lead to:

  • high levels of non-compliance or errors due to inconsistent practices
  • common use of shortcuts and workarounds
  • a lack of transparency over actions and decisions
  • poor management of fraud and corruption risks
  • fraudsters not obtaining approval or obtaining approval from someone who is not the appropriate decision-maker
  • fraud or corrupt activity going unnoticed or unchallenged
  • unknown and unaddressed systemic fraud or corruption.

How to put this countermeasure in place

Some ways to implement this countermeasure include creating:

  • Accountable Authority Instructions
  • financial delegations, such as requiring international travel up to $30,000 to be approved by the Department Secretary
  • HR delegations, such as for approving leave and entitlements
  • procedures that define who can make decisions, such as requiring approval by a manager or central delegate to change a vendor’s bank account.

This countermeasure is most effective when combined with system workflows to make sure all requests, claims or activities are only approved by the appropriate decision-maker.

How to measure this countermeasure's effectiveness

Measure the effectiveness of this countermeasure by using the following methods:

  • Confirm instruments of delegation exist, are current, and align to relevant legislation, policies and guidelines.
  • Undertake testing or a process walk-through to confirm that processes cannot be avoided.
  • Review a sample of approval decisions to determine whether processes and workflows are followed on all occasions.
  • Identify how the requirement to follow specified decision-making processes are communicated to staff.
  • Confirm that someone cannot bypass the process when subject to pressure or coercion.

Related countermeasures

Establish governance, accountability and oversight of processes by using delegations and requiring committees and project boards to oversee critical decisions and risk. Good governance, accountability and oversight increases transparency and reduces the opportunity for fraud.

Develop clear instructions and guidance for activities and processes, such as instructions for collecting the right information to verify eligibility or entitlements, procedures to help staff apply consistent and correct processes and guidance to help staff make correct and ethical decisions.

Conduct internal or external audits or reviews to evaluate the process, purpose and outcome of activities. Clients, public officials or contractors can take advantage of weaknesses in government programs and systems to commit fraud, act corruptly, and avoid exposure.

Related Fraudster Personas

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