Case study: Timesheet fraud leads to criminal conviction
Weakness of internal control systems to detect and prevent fraud
The adequacy of internal controls to prevent fraud and corruption is a key area of focus for the CCC. The sizeable sums of money involved in the public sector payroll function (which includes the payment of wages, superannuation and other allowances) means that payroll is a high-risk area for potential fraud in public sector agencies.
In 2014, the CCC finalised a two-year investigation into a fraud involving the dishonest claim of overtime by a former Queensland Health employee. The officer had been temporarily appointed to help manage the increased workload following the introduction of the new payroll system in March 2010. Over a two-year period, she dishonestly claimed nearly $40 000 in overtime.
The investigation also identified significant systemic risks with respect to the adequacy of internal control mechanisms. Additional allegations concern the failure of line managers and directors to adequately supervise staff and appropriately manage payroll approval processes.
The former employee was sentenced to two years’ imprisonment, to be suspended after three months.