The Department of Foreign Affairs and Trade (DFAT) does not tolerate fraudulent or dishonest behaviour and is committed to preventing, detecting and responding to fraud in all aspects of its business.
What is fraud?
Fraud in the Commonwealth environment is defined as “Dishonestly obtaining a benefit, or causing a loss, by deception or other means”. In this definition, “benefit” refers to both tangible items, such as money or objects, and intangible benefits including power, status or information.
External fraud means fraud committed by external parties against the department, including recipients of Australian aid program funding, scholarships, corporate contractors and consular clientele. Offences related to the Passport Act 2005 are not included in this fact sheet.
DFAT manages thousands of activities across more than 100 countries. Many of these countries are inherently difficult environments to operate in as governance arrangements are often weak and attitudes towards accountability and transparency are different from those in Australia.
In such operating environments, there is a much higher risk of fraud and corruption than Australia. For this reason DFAT has robust systems and procedures in place to protect public money and property from fraud and corruption, including through.
- Implementing a comprehensive internal Fraud Control Plan, a Fraud Policy Statement and an external Fraud Control Toolkit for funding recipients which identify key fraud risks and the governance framework to control these risks.
- Delivering fraud and corruption awareness training for all staff, with more targeted training for staff working overseas (particularly for staff working on the aid program).
- Building organisation capacity in fraud and anti-corruption, including through resourcing:
- dedicated units to oversee fraud and corruption policies, awareness, reporting and case management; and
- fraud control focal points at Australian diplomatic missions in countries with the highest incidence of program fraud.
- Incorporating risk management practices that consider fraud and corruption risks into the design of DFAT programs and activities.
- Performing due diligence checks on contractors, NGOs and other organisations as part of our procurement process.
- Including strong fraud control provisions in our contracts and grant agreements and monitoring compliance with those requirements.
- Working with our aid program partners to minimise both the occurrence and impact of fraud and corruption. This includes briefing their staff on emerging fraud risks and signing joint statements with partner governments and organisations on collaboration in addressing fraud and corruption.
- Developing fraud and anti-corruption strategies for all major country and regional aid programs under the Making performance count framework.
- Examining, through our internal audit program, compliance by major commercial contractors and NGOs with financial, contractual and activity management requirements, including fraud and corruption reporting and fraud management.
Reporting and managing fraud
Fraud prevention is the responsibility of all DFAT staff (including locally engaged staff at overseas posts), who must ensure they are aware of their responsibilities and obligations under the Australian Public Service Values and Code of Conduct, with respect to fraud prevention, detection and reporting. This responsibility extends to external parties that receive Australian Government funds, including commercial contractors, third party service providers, Partner Governments, multilateral organisations, non-government organisations and all other Funding Recipients. For more information on what DFAT does to prevent fraud, see Fraud Prevention Fact Sheet.
The department takes all allegations of fraud seriously and handles allegations in a confidential, prompt and professional manner. See The Fraud Policy Statement for detail on reporting fraud.
External fraud in 2017/2018
External fraud allegations received
- 136 investigations were commenced, nearly all related to the Australian Aid Program
External fraud investigation outcomes
- 220 investigations were finalised/closed
- fraud was substantiated in 90 (41 per cent) investigations
- where fraud was substantiated, 98 per cent of the fraud loss was recovered
Results of investigations where fraud proven:
- 53 per cent referred to law enforcement
- 35 per cent termination, resignation of agreement of employment
- 12 per cent administrative sanctions