The seven steps include how to create strategies to avoid fraud; how to look out for fraud; and what to do if you become a victim.
1) Establish the nature and scale
Determine the financial cost of the fraud and the types of frauds affecting the business. This will provide evidence-based criteria for interventions to address fraud.
2) Develop a good strategy
Include aims, objectives, counter-fraud actions, expected outputs and outcomes and the monitoring and evaluation framework of the counter-fraud work.
3) Establish an implementation structure
This will require centralised counter-fraud remit and authority, professional counter-fraud skills and investment in counter-fraud work, which is proportionate to the financial cost of the fraud.
4) Design and implement fraud-prevention measures
This will involve development of an anti-fraud culture alongside creating a strong deterrence effect and designing weaknesses out of processes and systems.
5) Design and implement fraud-detection measures
Detection will require whistleblowing arrangements, setting expectations about reporting concerns and data analysis to reveal anomalies.
6) Design and implement investigative processes
When undertaking investigations it is important to ensure they are legally compliant, that appropriate criminal, civil and regulatory sanctions are sought and action is taking to recover losses.
7) Monitor outcomes
Demonstrating return on investment can require tracking and monitoring of the outcomes specified in an organisation’s counter-fraud strategy.
Jim Gee, head of forensic and counter-fraud services at Crowe Clark Whitehill which published the report, praised the food sector at working harder to protect itself against the risk and cost of fraud, but urged the trade to do more.
He said: “There is an increasing understanding that fraud is not just about food contamination, but about losses to producers and retailers and an extra cost for consumers.
“By better understanding the nature and scale of fraud, food companies can better protect themselves, reduce the cost and risk and increase profitability.”