Sloppy HR costs government £4.3m in staff fraud cases

HR blunders were partly to blame for staff fraud and theft, costing government departments £4.3m last year.

An official study out last week found that 761 cases of internal fraud or theft were reported to 25 of the government’s 47 departments and agencies, rising from £3.85m in 2006.

In one case a number of staff appointed to fill several vacancies had claimed expenses worth £113,000 that they were not entitled to. The frauds arose because HR guidance had not been followed, the Fraud Report 2007-08 said.

In another HR botch, a part-time employee was set up on the payroll as a full-time employee in error and was paid as full time for several years costing £29,000.

Stephen Moir, president of the Public Sector People Managers’ Association, told Personnel Today that HR departments must be seen to act quickly in such cases.

“For HR to retain a shred of credibility, it has to respond to such issues, with line managers, in a rapid fashion,” he said.

Other personnel management abuses included staff taking sick leave to work elsewhere, and employees misusing flexible working systems. In one case, a senior manager misused his government procurement card to the tune of £78,000.

Moir stressed that HR professionals should work with other departments to ensure a holistic approach is taken to fraud and theft issues.

“Embedding such a framework has to be complemented by the organisational ‘will’ to take early action to tackle any identified issues, including reporting criminal activity to the police,” he said.

The report agreed, warning: “Staff who get away with this type of fraud may be tempted to attempt much more serious frauds.”

In the following clip, Catherine Johns from the law firm Pinsent Masons explains the steps HR managers can take to help protect the business against acts of fraud by staff.



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