Fraud Prevention and Response Policy

Introduction

1. Northeastern University London (the University) is committed to ethical standards of business conduct and adopts a zero-tolerance approach to financial misconduct, including any form of Fraud. The University will uphold legislation as defined by the Fraud Act 2006, in regard to its conduct both at home and abroad.
2. The purpose of this Policy is to outline how the University and its staff will manage suspected fraud activities and comply with the relevant legislation and is established to facilitate the development and maintenance of a culture of controls which will aid the prevention and detection of fraud.
3. It is the policy of the University that all staff and students conduct business in an honest way, and without the use of corrupt practices or acts of fraud to obtain an unfair advantage.

Definition of Fraud

4. For the purposes of this Policy, fraud is defined as dishonest, irregular or illegal acts, characterised by a deliberate intent at concealment or false representation, often resulting in the diversion of resources, whether or not for personal gain, for the benefit of an individual or group of individuals at a consequent loss to the University. Resources may include money, physical assets, equipment, or intellectual property. Fraud can also be defined as intending to deceive, typically by unjustifiably claiming or being credited with accomplishments or qualities.
5. If employees are uncertain about whether fraud has occurred or is likely to occur, they must seek advice from the Director of Finance (DoF).

Scope

6. This Policy applies to all members of University staff, including students acting as employees of the University, and associated parties, including members of the Board, and covers University activities undertaken in the UK or overseas. Fraud prevention legislation applies to all employees of the University.
7. The Policy applies to any fraud, or suspected fraud, including academic fraud (e.g. plagiarism or cheating), committed by staff, involving employees, members of the University Board, vendors, contractors, outside agencies doing business with the University, and/or any other parties that have a business relationship with the University. For this Policy, the term staff includes students who are working as ambassadors for the University.
8. For allegations of student fraud, refer to the University’s Disciplinary Procedures for Students.

General Principles

9. The University is committed to the highest standards of honesty, accountability, probity and openness in its governance. As a direct consequence of this, the University is committed to (i) stopping any fraud associated with any of its activities, operations and locations and (ii) to the robust investigation of any fraud or suspected fraud issues that should arise.
10. Fraud is a serious matter and the University is committed to investigating all cases of suspected fraud without regard to the suspected wrongdoer’s length of service, position, title, or relationship to the University.
11. The University adopts a multi-faceted approach to fraud, with the key objectives as follows:
    1. The establishment of a counter-fraud culture;
    2. Maximum deterrence of fraud;
    3. Active and successful prevention of any fraud that cannot be deterred;
    4. Rapid detection of any fraud that has not been prevented;
    5. To investigate any detected fraud professionally, effectively and thoroughly;
    6. Effective internal and external actions and sanctions against people found to be committing fraud, including legal actions for criminal offences;
    7. Effective communication and learning in relation to fraud, and
    8. Effective methods of seeking redress where fraud has been perpetrated.
12. Fraud is minimised through management procedures which deny opportunities for fraud. Staff should be aware of, and must comply with, the University’s policies and procedures, and remain alert and vigilant to the possibility that the University might be a victim of fraud, irregularity, or unacceptable activity.
13. Members of the Northeastern London Board, Executive Committee, and Senior Management Team are required to ensure that their behaviour is demonstrably selfless and open and that they champion the University’s policies on fraud, in particular, conflicts of interest, hospitality, travel, and gifts. These principles also apply to all University staff and contractors acting on behalf of the University.
14. Where any acts of fraud are proven, the University ensures that appropriate disciplinary or contractual procedures are applied (contractual procedures where a third party is involved). In most circumstances the University will report the matter to the Police. The University will also take every reasonable step to recover any losses in full. University members of staff are bound by this Policy, and students by the University’s Disciplinary Procedure for Students.
15. Breach of this Policy may constitute a disciplinary offence for staff and will be subject to investigation under the University’s disciplinary procedures. This may lead to disciplinary action, including dismissal. Failure to comply with this Policy may expose staff to the risk of being personally liable to prosecution. In the event that a student also acting as a member of staff should breach this Policy, the University reserves the right to invoke the Disciplinary Procedure for Students.
16. Non-compliance with this legislation carries financial and reputational penalties for both the University and its staff. While the risk to the University of contravening the legislation is considered to be low, it is extremely important that all staff are familiar with their legal responsibilities as serious criminal sanctions may be imposed for breaches. The key requirement for employees is to promptly report any suspected fraud or corruption activity to the DoF.

Procedure for Raising a Concern

17. Potentially any member of staff could be committing an offence under the Fraud Act if they suspect such activities of taking place, or if they become involved in some way, and do not take appropriate action. If any individual suspects that a fraudulent act is or has taken place, or if any person becomes concerned about their involvement, it must be disclosed as soon as possible to the University’s DoF.
18. If a member of the University community knows or suspects that fraud has occurred or might be taking place in the future in relation to the University, they are required to raise these concerns at as early a stage as possible. If they are uncertain about whether an action or behaviour can be considered fraud, they should speak to their Line Manager or the DoF.
19. The University will not consider unsubstantiated reports that it regards as vexatious or malicious. Reports of this nature may result in disciplinary action under the University’s disciplinary procedures. A vexatious report is one that is pursued, regardless of its merits, solely to harass, annoy, or subdue somebody; something that is unreasonable, without foundation, frivolous, repetitive, burdensome, or unwarranted.
20. The employee and/or the Line Manager completes the Fraudulent Activity Report Form and submits it to the DoF.
21. The DoF convenes a case conference with the CEO within 48 hours (if possible) to consider the nature of the allegations and to determine if a police investigation is required. This is to avoid the risk of any action by the University undermining potential criminal proceedings). Within 24 hours of the case conference, the CEO and DoF recommendations to the Executive Committee (ExCo) that:
    1. The matter is sufficiently serious to be handed over to the police for investigation; or
    2. The matter is not sufficiently serious to merit a police investigation, and an investigation should be undertaken in accordance with the University’s disciplinary processes. Subsequent to this action, should any further information indicate that the matter should be referred to the police, the matter will be immediately handed over to the police.
22. In the event that the suspected/known breach involves the DoF or any member of ExCo, the report is sent directly to the Chair of Northeastern London Board.

Support for Victims of Fraud

23. The University will support anyone who raises concerns in good faith under this Policy, even if any subsequent investigation finds that the reporter was mistaken.
24. The University will ensure that no one suffers any detrimental treatment as a result of reporting in good faith a concern relating to suspected or proven act(s) of fraud.
25. Detrimental treatment refers to dismissal, disciplinary action, threats, or unfavourable treatment in relation to the concern raised by the individual.
26. Members of the community who have reason to believe they have been subjected to unjust treatment as a result of reporting suspected fraudulent activity should inform their Line Manager immediately.

Monitoring and Reviewing

27. The DoF is responsible for monitoring the effectiveness of this Policy and will review the implementation of it on a regular basis, and will assess its suitability, adequacy, and effectiveness.
28. The University’s Audit Committee provides an independent and objective view of internal controls by overseeing both Internal and External Audit Services, reviewing audit reports, systems and procedures; and ensuring compliance.
29. This Policy will be reviewed by the Audit Committee annually, or as and when any legislative changes occur, to ensure compliance with the principles of the act. The Northeastern London Board will be advised of any action taken via the Annual Report from the Audit Committee.
30. Internal control systems and procedures designed to prevent fraud are subject to regular audits to ensure that they are effective in practice.
31. Employees may raise concerns at any time to the DoF or by using the University’s then-current whistleblowing procedures.

Roles and Responsibilities

32. This Policy is reviewed annually by the DoF. Concerns and comments may be reported, in confidence, to the DoF who has oversight of the management of the Policy within the University. Staff can also raise concerns using the University’s then-current whistleblowing procedures.
33. The University takes its legal responsibilities seriously and recognises that if it is found to have committed any fraudulent offences that it could be subjected to an unlimited fine, be excluded from tendering for public contracts, and face serious damage to its reputation. Individuals found to have committed any fraudulent offences could face a ten-year prison sentence and unlimited fines.
34. University employees will be required to comply with this Policy and with any training or other anti-bribery and corruption information provided by the University from time to time. For this Policy, ‘employees’ includes students working as ambassadors for the University. Employees will be responsible for the prevention, detection, and reporting of bribery and other forms of corruption and are required to avoid any activities that would lead to, or imply, a breach of this Policy.
35. Where appropriate, the Accounting Officer will report any cases that are deemed as a reportable event to the OfS.

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