Develop contractual clauses to help prevent, detect and respond to fraud or non-compliance.
Why this countermeasure matters
A lack of clear contractual clauses can lead to:
- fraudsters deceiving others to take advantage of loose rules and unclear processes to commit fraud and avoid exposure or prosecution.
- poor management of fraud and corruption risks inability to take counter fraud actions.
How you might apply this countermeasure
Some ways to implement this countermeasure include:
- clauses that clearly set out requirements to report fraud
- clauses that clearly set out requirements to have counter fraud arrangements in place
- clauses that clearly define obligations and or permissions
- clauses that clearly set out liability for fraud
- clauses that allow access to premises and documents for quality assurance, compliance and investigation purposes
- clauses that obtain consent to collect and share information
- clauses that require directions to be followed the event of suspected fraud
- clauses that allow recovery of debts and fraud losses
- contracts that incentivise detecting and reporting fraud
- contracts that are easy to comply with.
How to check if your countermeasures are effective
Here are some ways to measure the effectiveness of this type of countermeasure:
- confirm contracts and policy exists
- confirm contracts and policy are available and easy to access
- confirm contracts and policy are clear and understood
- confirm activities concord with contract clauses and policy
- review contract clauses policy and confirm it concords with legislation
- confirm that staff can easily find and reference contracts and policy
- confirm that staff can easily understand and apply contracts and policy
- ask staff about any known vulnerabilities in the contracts, process and policy that may increase rates of non-compliance and fraud
- ask staff about any contracts or policies that limit their ability to collect, use and disclose information to prevent, detect and respond to fraud
- ask fraud control staff about any barriers to conducting fraud investigations, enforcing penalties and recovering fraud losses.