43. In the current economic climate, I believe that my organisation faces a lower risk of fraud, a higher risk of fraud or no change to the risk of fraud?

Public Sector Fraud Awareness Survey - Findings: My environment.


PwC comment:
This result is a surprise to us. It is widely believed that the current economic climate presents a greater fraud risk to organisations. We have seen an increase in New Zealand fraud occurring – particularly for “need” rather than “greed”. We wonder if many of these respondents are overly optimistic. Time will tell.

Organisations where people do not think the economic environment will affect the risk of fraud had fewer incidences of fraud. Of those who said that the economic climate will result in no change in fraud risk, 15% reported incidences of fraud in the past two years. Of those who answered that their organisation will face a greater or lower risk of fraud, 45% reported incidences of fraud in the past 2 years.

Graph showing the answers to question 43.

What some respondents said:

“Canterbury earthquake may place additional pressures on staff to commit fraud, as well as economic climate of Governmental job restructuring overall means that a higher level of alertness needs to be maintained.”

“We have a very strong organisational culture which means we employ superb people. That coupled with good systems means the current economic climate is irrelevant to our fraud risk.”

“Small organisation. Strong culture of accountability and integrity.”

“Probably because existing controls are adequate. Few staff have the opportunity to commit fraud and that hasn't changed due to the economic climate.”

“We do have a high trust model. It is not very easy for people to commit undetected fraud except for the Manager on whom we rely to be trusted.”

“We are a secondary school where finances have always been tight. The risk of fraud is always real but since we have had no cases in recent years and have a stable staff no change would be expected.”

“Externally, there is a risk that people in organisations we fund may misrepresent their situation to us in order to maintain a stream of funding. This means we need to be more vigilant around looking out for warning signs of financial difficulty. The risk internally probably remains about the same as before. Our sector is currently under review, which makes people concerned for their jobs. This may lead to increased staff turnover in a time of uncertainty but hopefully not an increase in the risk of fraud.”

“As a local authority although there is pressure to achieve more for fewer ratepayer dollars there is no culture of taking more risks or cutting corners to achieve the bottom line. I don't believe the tougher times has increased the risk of fraud.”

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