8 November 2011 

The Auditor General today released the findings of a survey of fraud awareness, prevention and detection in the New Zealand public sector.  Her report is titled “Cleanest public sector in the world: Keeping fraud at bay”.

The findings confirm the generally satisfactory perception that exists about the penetration of ethical conduct throughout most sectors in New Zealand.

What is interesting is attempting to reconcile the findings of this survey compiled from about 1500 responses from agencies in the wider public sector (approximately 500 agencies subject to Audit NZ oversight – including local government), with the views of 8238 respondents in the 2010 State Services integrity survey (who were representative of the 136 agencies subject to the State Services code of conduct) and the biennial fraud surveys by PriceWaterhouseCoopers and KPMG.

The OAG survey used a broad definition of fraud, covering all forms of dishonesty. Bullying and misuse of the internet do not appear to be encompassed by the definition. Responses indicate that 22.5% of public sector employees have seen fraud at some stage in the previous 2 years. In the State Services integrity survey, if bullying and misuse of the internet are excluded, 21% of respondents reported observing misconduct in the preceding 12 months.

In the public sector survey 91.6% of respondents indicate their agency has a code of conduct, and almost 70% say that there are at least annual communications about it. By comparison, 97% of State Services agencies have a code but only 56% of staff reported that they were aware of integrity training.

As would be expected, the conclusions of the OAG survey are not dissimilar to the State Services integrity survey.

The OAG is promoting 3 crucial elements for fraud prevention:

  • Having a receptive culture
  • Communicating policies regularly
  • Reporting fraud to the Police.

The SSC advocates “6 Trust Elements”

  • Having integrity standards
  • Promoting those standards
  • Integrating those standards into agency operations
  • Managers modelling the standards
  • Staff being aware of the consequences of breaches
  • Agencies taking decisive action where breaches occur.