Explanatory Statement
Commonwealth Fraud Control Guidelines
The instrument to which this explanatory statement relates
This explanatory statement relates to the ‘Commonwealth Fraud Control Guidelines’ (the instrument).
The legislative authority under which the instrument is made
Section 64(1) of the Financial Management and Accountability Act 1997 (FMA Act) provides that the regulations may authorise a Minister to issue guidelines to officials on matters within the Minister’s responsibility. Regulation 16A of the Financial Management and Accountability Regulations 1997 provides that the Minister for Home Affairs may issue guidelines (to be called Fraud Control Guidelines) about the control of fraud, dealing with fraud risk assessments, the preparation and implementation of fraud control plans and reporting of fraud.
Purpose of the instrument
The Fraud Control Guidelines establish the policy framework and articulate the Government’s expectations for effective fraud control for all departments and agencies (agencies), and their employees and contractors, subject to the FMA Act, when performing duties related to the efficient, effective and ethical management of public resources.
Background
On 24 February 2011, the Minister for Home Affairs issued revised Fraud Control Guidelines to take effect on 29 March 2011. The Fraud Control Guidelines were previously released in 2002. This reissue clarifies policy and simplifies text and structure.
Notes on the instrument
The Fraud Control Guidelines apply to all FMA Act agencies. A body subject to the Commonwealth Authorities and Companies Act 1997 (CAC Act) is not subject to the Fraud Control Guidelines unless the Finance Minister has made a General Policy Order (GPO) in accordance with section 48A of the FMA Act, specifying the mandatory requirements for that body under the instrument. CAC bodies which are not subject to such a GPO should consider applying the Fraud Control Guidelines as a matter of policy.
Fraud control encompasses the whole process of fraudulent activity and includes prevention and detection, the related investigation and where appropriate, prosecution of offenders. The Fraud Control Guidelines establish the framework within which agencies determine their own specific practices, plans and procedures to manage fraudulent activities. The instrument sets out the definition of fraud and obligations of Chief Executives and outlines the requirements for risk assessments, fraud control plans, awareness and training, detection, investigation and response, quality assurance and information management and reporting.
The Fraud Control Guidelines should be read in consultation with documents relevant to investigation of Commonwealth offences and responsibilities of FMA Act and CAC Act agencies. The Fraud Control Guidelines are not intended to be an exhaustive tool to deal with all types of agency risk and should also be considered with other appropriate guidance materials.
Agencies were consulted during the development of the Fraud Control Guidelines. A draft copy of the Fraud Control Guidelines was circulated to all Australian Government Departments for comment.