Photo: Pixabay/shafin_protic
Cases of internal fraud and corruption are almost certainly being under-reported, according to a new report from the Anti-Corruption Taskforce.
The report found cases were likely being being under-reported due to inadequate prevention and detection controls in some agencies, with the number of cases found likely representing "only a fraction of actual activity."
The taskforce was led by the Serious Fraud Office and supported by New Zealand Police and the Public Service Commission and was launched last year.
It conducted a six-month pilot programme to build a clearer, "system-wide" picture of corruption and fraud risks across the public sector.
The SFO announced the findings from the taskforce on Tuesday, which had assessed the fraud and corruption controls of six public agencies, gathered data on corruption-related activity and identified potential cases for investigation.
The agencies included the Department of Corrections, Inland Revenue, and the Ministry of Social Development
The anonymised findings showed that cases of internal fraud and corruption were likely under-reported due to "inadequate prevention and detection controls, and gaps in reporting."
Other findings included that some agencies had "strong controls in place", while others were not "appropriately prepared to prevent or detect wrongdoing".
It said gaps in the system "may be leaving the sector vulnerable", with agencies feeling they "lack sufficient guidance on thresholds for passing fraud and corruption cases to law enforcement."
The pilot identified 446 cases of alleged or suspected internal fraud or corruption from the data supplied, which covered a period of 15 months.
But it noted those figures likely represented only a fraction of actual activity.
"Inconsistent definitions, and fragmented recording and referral processes mean the true scale of internal fraud and corruption remains unclear."
In comparable jurisdictions it showed that between 0.45 and 5.6 percent of public funds are lost to fraud, corruption, and error each year - applied to 2025 Budget expenditure, the report found that represented an estimated $823 million to $10.24 billion in potential losses.
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