I. Background

This document sets forth an anti-fraud policy to implement controls and assist in the prevention and detection of fraud in the Organization. The intent of the Policy is to promote consistent legal and ethical organizational behavior by assigning responsibility for the development of controls and providing guidelines for reporting and conducting investigations of suspected fraudulent behavior.

II. Scope of the Policy

This Policy applies to any fraud or suspected fraud in the Legal Aid Forum (also referred to as the Organization), including employees (including contractual employees) as well as members, advocates, consultants, volunteers, suppliers, service providers, contractors, lenders, borrowers, external agencies and/or any other parties having a business relationship with the Legal Aid Forum. Any investigative activity required will be conducted without regard to the suspected wrongdoer’s length of service, position/title, or relationship with the Organization.

III. Objectives of the Policy

The Policy has been formulated to put in place controls so as to provide for a system of detection and prevention of fraud, reporting of any fraud or suspected fraud and appropriate resolution of fraud-related issues.

The objectives of this Policy are to ensure that:-

(1.) Management is aware of its responsibility for detection and prevention of fraud, abuse, and other improper conduct. Management is to ensure that processes and systems are in place in the organization which minimise the incidence and opportunities of fraud and irregularities.

(2.) Any fraud detected or suspected should be reported immediately to the designated Nodal Officer for the purpose of coordinating the preliminary investigation.

(3.) To conduct investigations into fraudulent activities.

IV. Definition of Fraud

Fraud is a false representation or omission of a material fact or any other illegal act done intentionally to wrongfully gain benefit to self or others and/or wrongfully cause loss to others.

I. Acts constituting fraud

The term fraud or suspected fraud refers to but is not limited to the following:-

(i) Forgery or alteration of any document or account belonging to the organization.

(ii) Forgery or alteration of cheques, bank drafts, or any other financial instrument, financial documents and personal claims etc.

(iii) Misappropriation of funds, securities, supplies or other assets etc.

(iv) Deliberate concealment/deception of facts in matters of appointments, hiring, tender committee recommendations, unit and project evaluation, submission of reports etc. resulting in wrongful gain to one and/or wrongful loss to others.

(v) Using organization funds for personal purposes.

(vi) Authorizing or receiving payments for services not rendered.

(vii) Destroying, disposing and removing records or any other property of the organization with an ulterior motive to manipulate and misrepresent facts so as to create suspicion/suppression/fraud resulting in an unobjective assessment/decision.

(viii) Impropriety in handling or reporting of transactions of funds or financial transactions.

(ix) Profiteering as a result of insider knowledge of the organization’s activities.

(x) Disclosing confidential and proprietary information to outside parties.

(xi) Accepting or demanding anything of material value from members, advocates, consultants, volunteers, vendors, lenders, borrowers and persons providing services/material to the organization in violation of the In-charge’s Conduct, Discipline and Appeal Rules.

(xii) Any similar or related inappropriate conduct.

V. Other inappropriate conduct

Suspected impropriety relating to the moral, ethical or behavioral conduct of an employee should be resolved by the HR Unit instead of the In-charge/Nodal Officer.

If there is any question as to whether an action is fraudulent or not, the In-Charge/Nodal Officer may be contacted for guidance.

VI. Reporting Procedure

An employee, advocate, consultant, volunteer, vendor, contractor, borrower, lender, or other person having a business relationship with the Organization, upon discovery of fraud or suspected fraud should report it to the designated In-Charge/Nodal Officer. The matter shall be reported in writing. If an employee or other person is unwilling to report it in writing, he may record his statement before the In-Charge/Nodal Officer. The In-Charge/Nodal Officer shall keep the details of the identity of the officer/employee/other person reporting such fraud.

The In-Charge/Nodal Officer shall maintain confidentiality regarding the identity of the person making the report and shall not discuss the same with any unauthorized person under any circumstances. The Organization shall not tolerate any form of retaliation against persons providing information relating to fraud or suspected fraud. The Organization shall provide protection to the complainant/person for providing information relating to fraud or suspected fraud.

The Incharge / Nodal Officer shall take prompt action on such reporting and ensure that all relevant records and documents and other evidence are taken into custody or produced before the suspect persons/authorities. These documents are protected from being tampered with, destroyed or deleted by the person.

On receipt of the report, the reporting person shall be informed by the Nodal Officer about the following:-

(i) Do not approach the suspected person in an attempt to ascertain the facts or to seek compensation.

(ii) Observe strict confidentiality. Do not discuss the case, facts, suspicions or allegations with anyone unless specifically asked to do so by the Incharge/Nodal Officer.

VII. (a) Investigation of Fraud/Suspected Fraud

It shall be the primary responsibility of the Incharge/Nodal Officer to conduct the preliminary investigation. The employee reporting the suspected fraud should not personally attempt to conduct the investigation. He should not interview or question any person connected with the suspected fraud.

The Incharge/Nodal Officer or any other employee involved in the investigation of suspected frauds shall keep the contents of the investigation activity strictly confidential. Investigation
The results will not be disclosed or discussed with anyone other than those who have a legitimate need to know.
The Charge/Nodal Officer will make every effort to protect the rights and reputation of all persons involved in a report of suspected fraud, including the person who in good faith alleges the alleged misconduct, as well as the alleged violator(s). If the Charge/Nodal Officer determines that a report is not credible or is not a report of fraud, he or she will document this determination. The Charge/Nodal Officer’s documentation will include support for the determination. If the initial investigation confirms fraudulent activities, the Charge/Nodal Officer will prepare an incident report and send it to the Director of the relevant unit for approval to send it to the Vigilance Unit for further investigation.

After completion of investigation by the Vigilance Department, appropriate and proper action which may include administrative action, disciplinary action, reporting to the Board/Audit Committee, civil or criminal action or closure of the case if it is proved that fraud has not been committed, etc. will be taken with the approval of the competent authority based on the outcome of the investigation.

The Vigilance Department will apprised the “In Charge/Nodal Officer” of the results of the investigation conducted by them. There will be constant coordination between the two.

(B) Time Limit for Preliminary and Final Investigation

The time limits for completion of preliminary and final investigation of the report of fraud/suspected fraud are as follows:-

(i) Preliminary Investigation
The In Charge/Nodal Officer shall complete the preliminary investigation and submit the investigation report within 30 days from the date of report of fraud/suspected fraud. In case the Nodal Officer is not able to complete and submit the investigation report within 30 days. The Functional Director shall grant approval for final investigation by the Vigilance Unit normally within 10 days from the date of receipt of the preliminary investigation report.

(ii) Final Investigation
The Vigilance Unit shall complete the final investigation and submit the investigation report within two months from the date of submission of the preliminary report to the Vigilance Unit or within such extended period as may be allowed by the Nodal Officer.

VIII. Disciplinary Action

Non-compliance with this policy will result in disciplinary action in the following cases –

(i) An employee who is engaged in any type of fraud is subject to disciplinary action.

(ii) An employee who suspects or detects fraudulent activity and fails to report as required by this policy or an employee who knowingly reports false or misleading information is subject to disciplinary action.

(iii) An employee of the Department in which the fraud has been committed does not report to the Incharge/Nodal Officer/Vigilance Unit and every report of suspected fraud made by an employee or other person is subject to disciplinary action.

IX. Prevention of Fraud

(i) Management shall ensure the detection and prevention of fraud by establishing procedures, checks, and controls to prevent and detect fraud when it occurs.

(ii) In addition to the above, Management shall be responsible for the following –

a) Educate employees with the types of improprieties that may occur in their area,

b) Create a culture whereby employees are encouraged to report any fraud or suspected fraud that comes to their knowledge, without fear,

c) Promote employee awareness of the ethical principles subscribed to by the organization through In Charge / Nodal Officer Rules.

(iii) The General Conditions of Contracts, Approvals, Loan/Subsidy/Grant Agreements of the Organization will be amended where all the bidders/service providers/vendors/lenders/borrowers/consultants etc. will be required to certify that they will abide by the anti-fraud policy of the In Charge/Nodal Officer and will not indulge or allow any other person employed in the Organization to indulge in fraudulent activities and will immediately inform the Organization if any fraud/suspected fraud comes to their notice. In case of failure to do so, the Organization may debar them from future transactions. This condition will be applicable for submitting loan/subsidy/grant applications and making supplies.