Controlling fraud in the public sector - PricewaterhouseCoopers

Public sector cuts also result in additional work pressures
on those who remain. This often leads to reductions in
accountability as checks and balances fall by the way-side
because fewer people are being required to do more work.
The result can be increases in both internal and external
fraud because fewer people are available to monitor controls.
Many respondents were concerned that government
departments were looking to cut the cost of non-essential
services. In the private sector internal audit or quality
reviews are often targeted for cut back. Coupled with the
existence of some very large government programs, such
potential cuts present a strong fraud opportunity.
We believe it is important that organisations monitor
performance closely and correlate sources of information
to identify when staff might feel under particular pressure.
Figure 6: Factors given by respondents
from government and state-owned
enterprises as contributing to increased
incentives to commit fraud
Percentage respondents who reported
increased incentives to commit fraud
50%
40%
30%
20%
10%
41%
37%
16%
11%
0%
Fear of
losing jobs
Targets
more
difficult
to achieve
For senior
management
to achieve
desired
results
Bonuses
not paid
this year
65%
believe that IT controls
are weakening,
making organisations
more vulnerable to
external penetration
10 PwC