An internal audit completed in August last year found that Central Coast Council’s Fraud and Corruption Control Framework was out of date.
It also found that: Council had not performed any Fraud and Corruption Risk Assessments recently; no responsibility had been assigned for coordinating the performance of Fraud and Corruption Risk Assessments.; and awareness of fraud and corruption risks had not been promoted consistently.
The audit also found that fraud and corruption training had been ad hoc and had not been tracked, that financial controls were not pressure tested and that exit interviews with terminating personnel had not addressed fraud and corruption issues.
The audit said over the past five years 63 matters of corrupt conduct had included: 44 per cent conflict of interest; 29 per cent unauthorised access to information and breach of confidentiality; 14 per cent theft; 11 per cent wrongful use of money; and 2 per cent abuse of power.
However, the audit found that opportunities to improve the efficiency and effectiveness of financial controls had been identified and were being implemented.
And despite the fraud and corruption framework being out of date (it should have been updated in 2022), the response element of Council’s Fraud and Corruption Control System was assessed as being strong.
“This is largely a result of Council’s sound governance over misconduct investigations,” the audit said.
The audit noted that there was a qualified and experienced cohort of in-house investigators available and that outsourced investigators were used where appropriate.
Root causes of the findings included: changes of personnel and the organisational focus on addressing the financial crisis; different parts of the business developing their procedures independently of each other; different authors not identifying interdependencies between policy documents; and a focus on other priorities.
One impact noted by the auditors was that low-scale fraud and corruption may not have been given the importance intended by management.
Since then, Council has embarked on a number of improvements and processes, outlined to the Audit Risk and Improvement Committee in December.
A Council spokesperson said when concerns are raised internally or from the community, if there is
sufficient evidence, Council will actively investigate the matter.
“We were pleased to find that very few investigations uncovered unlawful behaviour, but took the
opportunity to reinforce our prevention measures including system improvements and additional training,”
the spokesperson said.
“Where poor behaviour was identified, such as theft of minor items or timesheet inaccuracies,
appropriate disciplinary responses have been implemented and the police and ICAC notified where
appropriate.
“Council will continue to take a proactive approach to preventing, and responding to, matters of concern
however they are raised with us.”