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Conduct quality assurance checks

Type of countermeasure

This is a detection countermeasure. Detection countermeasures can help to identify when fraud has occurred. They can help disrupt additional fraud and reduce the consequences.

Summary

Conduct quality assurance activities to confirm that processes are being followed correctly and to a high standard.

Why this countermeasure matters

Lack of quality assurance checks can lead to:

  • high levels of non-compliance or errors due to inconsistent and unclear processes, rules and decision-making
  • staff being less deterred from committing fraud
  • less transparency over the actions and decisions of staff and third parties
  • poor management of performance, decision-making and risk
  • 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 conducting quality assurance by:

  • selecting random pieces of work to quality check, such as 2% of processed claims or decisions
  • having an independent person quality check high-risk activities, such as changes to vendor records, on all occasions
  • having the procurement team quality check purchase orders above $10,000 before they go to the spending approver.

How to measure this countermeasure's effectiveness

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

  • Compare processes with quality assurance policies and standards.
  • Check critical processes.
  • Analyse data related to quality checks and measure results against Key Performance Indicators.
  • Review the quality checking process to determine if checks would identify fraud.
  • Walk through the process with staff to see what elements they check.
  • Conduct interviews, workshops or surveys with staff who complete checks to measure their understanding of the fraud control policies in place.
  • Confirm there is an independent review for high risk activities, such as reviews by staff in other locations.
  • Identify the percentage of claims quality checked and determine if it differs between new and competent staff.

Related countermeasures

This type of control is supported by:

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.

Rotate staff and contractors in and out of roles to avoid familiarity. Staff and contractors can become too familiar with processes, customers or vendors, which can lead to insider threats.

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.

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

Separate duties by spreading tasks and associated privileges for a business process among multiple staff. This is very important in areas such as payroll, finance, procurement, contract management and human resources. Strong separation of duties controls are enforced by systems. It is also known as segregation of duties.

Establish exception reports to identify activities that are different from the standard, normal, or expected process and should be further investigated.

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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