Australian Institute of Criminology

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Foreword

Public sector fraud continues to be of concern to the Commonwealth Government. Not only does it reduce funds available for government programs, but it also creates a negative and counterproductive atmosphere within affected workplaces. Fraud can destroy working relationships, reduce productivity and lead to loss of staff, with immeasurable direct and indirect harms being suffered both by the public sector and the community at large. Understanding the nature and extent of the problem is the first step in devising workable preventive strategies and effective solutions.

This report presents the results of a longitudinal census of fraud incidents experienced by Commonwealth entities and the ways in which fraud risk has been managed and controlled. Previous Commonwealth fraud surveys published by the Australian Institute of Criminology have presented data for single financial years. In this report, an opportunity has been taken to present trend information for the first time in respect of the three most recent years for which census data were available—2010–11 to 2012–13.

Of the 154 or more Commonwealth entities that responded to the Australian Institute of Criminology’s census each year, almost 40 percent experienced one or more suspected incidents of fraud. Unfortunately, between 2010–11 and 2012–13, both the number of suspected incidents of fraud and the funds at stake increased.

In total, 265,866 incidents of suspected fraud involving losses of $530m were reported over the three years. Each year, more than 1,000 defendants have been prosecuted for fraud against the Commonwealth in respect of charges involving, on average, approximately $50m each year. Of those convicted, most received non-custodial sentences, with approximately 10 percent being sentenced to terms of immediate imprisonment. Only a small proportion of funds are recovered each year.

I am confident that the information presented in this report will assist in identifying emerging areas of risk and enabling new and effective fraud control measures to be constructed.

Dr Adam Tomison
Director (Chief Executive)
Australian Institute of Criminology