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The Auditor General tabled the Fraud Risk Management — Better Practice Guide in Parliament on 22 June 2022. This was further to the Fraud Prevention in Local Government performance audit report which was tabled in Parliament on 15 August 2019.

Fraud risk management comes under regulation 5 of the Local Government Financial Management Regulations — ‘CEO’s duties as to financial management’. Failure to effectively apply the requirements of regulation 5 can result in significant financial loss, inefficiency, financial misreporting or fraud.

Better practice also requires CEOs to bring this alert to the attention of their audit committee, along with any recommended actions for endorsement and monitoring by the committee.

All local governments should build on their current policies and practices to make workplaces more fraud resistant/resilient through preventative and detection processes, in addition to improving their reporting avenues to strengthen their ability to respond to fraud. 

The better practice guide aims to help Western Australian public sector entities to manage their fraud and corruption risks. It outlines why fraud and corruption risk management is important and provides practical guidance on the process of developing a fraud and corruption risk management program.

The guide provides several tools that local governments can use to manage their fraud and corruption risks.

Useful tools for local governments outlined in the report include:

• Fraud control system benchmarking tool — to benchmark their current fraud control program against the requirements and guidance of the better practice guide.
• External threat assessment tool — to assess external threats against their organisation.
• Tools to support fraud risk management process.

All local governments need to ensure they have policies and procedures and a fraud risk management program to address the better practice principles provided by the Fraud Risk Management — Better Practice Guide and Appendix 2: Better practice principles - Office of the Auditor General report.

Further information and support for local governments is available on the Department of Local Government, Sport and Cultural Industries website.