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Welcome to Direct Investment Funding Limited
Welcome to Direct Investment Funding Limited
Call Support 24/7 Standby Team
Email Support info@directinvestmentfunding.com
Location 100 Pall Mall, London, SW1Y 5NQ
Home
About Us
OUR SERVICES
Loans
Letter of Credit
Bank Guarantee
Syndicated Loans
Project Funding
FINANCE MANAGEMENT
Intruder protection
ATM Management
Fire Protection
Telesurveillance – Telecontrol
VAULT TRANSPORTATION
Security
Contact Us
Fraud Protection
Home > Fraud Protection
I. PREFACE
Direct Investment Finance Limited (DIFL) in other to combat any form of corruption, collusion, coercion, fraud, money laundering obstruction and terrorist financing within DIFL work group as update in DIFL’s Anti-Fraud Policy dated 21 August 2020. Direct Investment Finance Limited (DIFL) has a duty to its stakeholders to take all responsible steps to prevent fraud occurring, whether perpetrated by staff, contractors and suppliers, Borrower/Promoters other organisations or members of the public.
The Direct Investment Finance Limited (DIFL) will maintain robust control mechanisms to both prevent and detect fraud. All staff member regardless of position or qualification have a responsibility for maintaining documented control systems and must be seen to be setting an example by complying fully with procedures and controls. The effectiveness of controls will be subject to cyclical review by the Internal Auditors.
The DITL conducts investigations stems from:
(i) London Supreme Court of Justice;
(ii) Article 12 of the DIFL Statute;
(iv) DIFL members of the Board of Governors’ Decision of 21 August 2020 concerning DIFL’s operations in the United Kingdom.
Created by the British Ombudsman, the DIFL is an authorised financial service provider in Europe and Arabian countries functioning under the laws of England and Wales AND Spain. As such, we operate in accordance with the British legal framework and DIFL Statute, Article 12 of which implies that: “In its financing activities, the DIFL shall employed
its funds in the interests of the Group.”
DIFL shall ensure that loans are used according to the agreed purpose. In this context, DIFL shall endeavor to make sure that its operations are in line with the DIFL Code of conduct to combat corruption and fraudulent practices.
Consequently, DIFL will ensure that all prohibited conduct does not occur, and where it does occur, it will be handled adequately and in a timely manner. To this point, procedures for investigation shall be carried out.
In regards to this DIFL will align it’s policies with foreign practice:
(i) The Organisation for Economic Co-operation and Development’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
(ii) United Nation
(iii) the COE Criminal Law Convention.
(iv) the FATF.
(iv) the (IFIs) Anti-Corruption Task Force.
All members of staff have a responsibility to protect the assets and reputation of the company and are expected to be alert to the potential for fraud. Line managers should brief staff on the common types of fraud perpetrated in their areas of responsibility. Confidential mechanisms have been established to allow staff to report suspected frauds to management. All reported suspicions will initially be investigated by the Fraud Investigation Group. The members of such a group may include:
The Members of the Board of Directors
The Audit Committee
Legal Department
Secretary
Further investigation can be carried by a notarized body through the Supreme Court of Justice.
Procedure for Fraud Prevention, Detection and Investigation
1.1. Introduction
The Direct Investment Finance Limited(DIFL) procedure for fraud prevention, detection and investigation is set out below.
The objectives of the procedure are to:
Encourage staff to be aware of fraud;
Bring suspected fraud to notice;
Provide a framework response plan for investigating and reporting fraud; and
Ensure both alleged and proven fraud are dealt with in a consistent and timely manner.
The Direct Investment Finance Limited(DIFL) has a unique role to play in the community and any instances of fraud or corruption may be damaging to public confidence and support. Losses due to fraud, theft or corrupt practices can have a direct effect on jobs and the level and quality of service provision. Vigilance is essential since all staff are responsible for ensuring that the best possible service is provided to DIFL customers, borrowers, promoters and that value for money is secured from public funds.
Successful fraud prevention involves creating an environment which inhibits fraud. Taking immediate and vigorous action if fraud is detected is not only necessary to prevent future losses, but also helps deter frauds. An employee who is alert to the possibility of fraud and who acts accordingly on a day-today basis is a powerful deterrent against fraud.
1.2. Fraud Prevention
Fraud can be defined as ‘any act of wildful dishonesty to gain individual or collective advantage’. It is taken to include theft, misuse of property, corruption, the alteration of financial or other records or any unauthorised act which results directly or indirectly in financial gain to the perpetrator or a third party. Fraud can he perpetrated against an employee, borrower/promoter, suppliers, Government Agencies or Departments, or the public. Employee should be aware that gifts, including hospitality, offered by contractors, suppliers and service providers may place employees in a vulnerable position.
1.3. Management Responsibility and Risk Management
The prime responsibility for preventing fraud lies with management through:
a. identifying risks to which systems and procedures are exposed;
b. designing, implementing, documenting and operating of internal controls;
c. establishing an environment that promotes compliance with internal controls;
d. promoting fraud awareness amongst staff; and
e. fostering an ‘anti-fraud’ culture.
However, while management committees are responsible for assessing and controlling the level of risk within their areas of authority, it is the responsibility of all staff to be aware of fraud and to take the necessary steps to minimize the risk to the Company.
Managing the risk of fraud is the same in principle as managing any other business risk. It is best approached systematically both at organisational and operational level. Managers should identify risk areas, assess the scale of risk, allocate responsibility for managing specific risks and implement and test controls to minimize the risks.
Management also have a responsibility to familiarize themselves with common fraud techniques in areas for which they have control. Managers should also ensure that staff in their areas of operation are familiar with common types of fraud.
1.4. Internal Controls
In the quest to combat fraud, coercion, corruption, obstruction, collusion, financing of terrorism and money laundering as state below:
Internal controls are the key element in preventing fraud. They include both financial and non-financial controls, for example annual leave records, and those that are in place to safeguard the misuse of the company’s assets, including computer systems. The financial regulations are one example of these controls. The Company’s financial and other non-financial procedures are the definitive guide and are available to all staff. It is the responsibility of management to
ensure that controls in their area of responsibility have been documented and communicated. In order to set a good example, managers should be seen to be complying with all controls. The emphasis should be on creating a culture of honesty and fraud detection, not increasing the volume of detailed operational and supervisory checks and controls, unnecessarily.
1.5. Management Checks
The prevention and detection of fraud and impropriety is only possible where strong internal controls are present and constantly applied. Routine checks and monitoring by management to ensure that procedures are being followed are, therefore, essential. The benefits of implementing a culture of strong management controls:
A deterrent effect when it is known that management is actively involved in ensuring that procedures are followed, and
The results of the checks will allow management to identify any operational areas where controls are not being uniformly applied and investigate whether systems have been exploited. Management should periodically monitor compliance with controls and may also ask the Internal Auditors to test compliance. It should be emphasized that the prime function of internal audit is to evaluate the effectiveness of the overall framework of internal control, with management ensuring implementation and monitoring of the framework.
Common excuses for non-compliance with controls are that they are no longer applicable, insufficient time is available or they are not appropriate. It is important that such comments are reported to management so that the need for the controls can be re-evaluated.
1.6. Staff/Training
Staff provide the best protection against fraud and corruption. It is important, therefore, that the Company’s policy on fraud prevention and investigation is fully communicated to all staff. The lack of clear guidance and ignorance of procedures will often be the first excuse used by offenders. The recruitment of suitable staff is the Company’s first defense in preventing fraud. Best practice recruitment policies such as detailed application forms including a statement on criminal records, communication with referees and past employers and verification of educational and professional qualifications will assist in this approach.
Staff awareness of policy and procedures is fundamental to the effective operation of systems. The Company will comply with best practice, including:
i. publication of Company policy on fraud, corruption and impropriety including easy access to it for all staff;
ii. instruction in and discussion of control and probity issues as part of staff induction;
iii. formal staff training on operational procedures;
iv. desktop instructions for specific tasks; and
v. regular staff notices regarding changes to Financial Regulations and financial procedures.
1.7. Fraud Detection
The primary responsibility for detecting fraud lies with management through the implementation, documentation and operation of effective systems of internal control. The Company’s Internal Auditors through their evaluation of the control framework also have a role to play in preventing and detecting fraud. All staff have a responsibility to be
aware of the potential for fraud and take the necessary steps to minimize the risk to the Company. Properly and consistently applied procedures for reporting and investigating fraud play an important part in preventing further fraud. The Company expects that reported suspicions will be investigated. The Company’s fraud response plan set out in the next
section must be implemented where fraud is suspected.
FRAUD RESPONSE PLAN
2.1. Introduction
Management and staff are likely to have little experience in dealing with fraud and when suspected cases arise, may be unsure of the appropriate action to take. The objectives of this response plan are:
• to provide a documented framework to which the Company can refer in the event that fraud is suspected or reported; and
• to ensure that in the event of fraud, timely and effective action is taken to prevent further losses, identify fraudsters, safeguard evidence, minimise publicity, reduce adverse effects on the business and to learn lessons.
Fraud investigation checklists for line managers and the Fraud Investigation Group are outlined.
2.2. Reporting Fraud
All actual or suspected incidents of fraud should be reported without delay to the Fraud Investigation Group or other member of the Fraud Investigation Group. The members are:
Company Secretary General
Company Board of Directors
Member of the Audit Committee
Chief Compliance Officer
When staff report suspected fraud it is important that their suspicions are treated seriously and that all details provided by the reporting employee are recorded accurately and in a timely manner. They should be repeated to the reporting employee to confirm understanding. It is essential that staff are put at ease, since the decision to report the suspected fraud may be traumatic for the individual concerned. Staff (or others) reporting fraud should be assured that
all information will be dealt with in the strictest confidence and that their anonymity will be preserved if requested, unless that is incompatible with a full and fair investigation.
Regardless of the direction any future internal or Police investigation may take, the anonymity of any ‘whistleblower’ must be guaranteed during the initial investigation.
Having recorded the details of the individual case, the Management Committee should, within 24 hours, hold a meeting of the Fraud Investigation Group to decide on the initial response.
All allegations by DIFL staff members, DIFL’s project related parties, other counterparts and partners, or members of the public (including civil society) of suspected Prohibited Conduct should under this policy be reported to the Fraud Investigations Division at the DIFL which will acknowledge receipt of the allegation. A report can be made:
• by letter;
• by email to investigations@directinvestmentfunding.com;
• through the on-line form available on the DIFL website;
• by telephone or
• by fax (+1 800-501-9809)
(D) Independent Complaints Mechanism.
In addition to allegations of Prohibited Conduct, any person or group who believes there may have been a case of maladministration within the DIFL Group can lodge a complaint with the DIFL Secretary General under the DIFL Complaints Mechanism.
This section sets out the procedures for investigations of Prohibited Conduct, which are handled by the Inspectorate General through its Fraud Investigations Division in compliance with and without prejudice concerning investigations conducted by the Supreme Court of Justice, as interpreted by the Court of Justice in its judgment of and the Board of Governors concerning DIFL’s cooperation with the Supreme Court of Justice. Allegations concerning money laundering and financing of terrorism are investigated by the Fraud Investigations Division in close cooperation with the Office of the Chief Compliance Officer.
(E) Protection of Staff Members and External Complainants.
In order to conduct an investigation, the Fraud Investigations Division and the Supreme Court of Justice shall have full access to all relevant personnel, information, documents and data, including electronic data, within the DIFL, in accordance with the applicable procedures.
The Fraud Investigations Division and the Supreme Court of Justice shall have the right to examine and copy the relevant books and records of the relevant Project related parties or DIFL other counterparts and partners, as appropriate.
DIFL may sign a Memorandum of Understanding with law enforcement agencies or other similar organisations in order to facilitate the exchange of information on cases of mutual interest concerning suspected Prohibited Conduct, subject to the respect of applicable data protection provisions.
Likewise, DIFL may apply to become parties civile in judicial proceedings related to its investigations when it is considered to be in DIFL’s interest to do so, notably to maximize the information and evidence available to DIFL concerning suspected.
All allegations of Prohibited Conduct will be treated by DIFL as strictly confidential, and may be made anonymously.
As regards reports made by an DIFL Staff Member, the Staff Code of Conduct and the DIFL Whistleblowing Policy provide that DIFL will ensure confidential treatment for members of staff who make bona fide reports of suspected misconduct, and that such members of staff will enjoy the assistance and protection of DIFL. The Head of the Fraud Investigations Division, Direct Investment Finance Limited.
Mal administration means poor or failed administration. This occurs when the DIFL Group fails to act in accordance with the applicable legislation and/or established policies, standards and procedures, fails to respect the principles of good administration or violates human rights. Some examples of failure to respect the principles of good administration, as set by the British Ombudsman, are: administrative irregularities, unfairness, discrimination, abuse of power, failure to reply, refusal of information, unnecessary delay. Mal administration may also relate to the environmental or social
impacts of the DIFL Group activities and to project cycle related policies and other applicable policies of the DIFL.
2.3. Initial Enquiry
On receiving the details of the suspected fraud, the Fraud Investigation Group should undertake as limited review as necessary to establish whether further action needs to be taken. This may be an investigation, led by Internal Audit. The decision by the group to initiate a special investigation shall constitute authority to internal audit to use time provided in the internal audit plan for special investigations, or contingency time, or to switch internal audit resources from planned audits.
If this initial investigation suggests that suspicions are confirmed, the group will decide which body is best placed to undertake further investigative work and will inform the Principal, the Chairman of the Audit Committee, the Supreme Court of Justice, auditors, the funding body and the Police as appropriate. The circumstances in which the Compliance Department must inform the funding body of actual or suspected fraud are set out in the funding body’s audit code of practice. The Principal is responsible for informing the funding body of any such incidents.
2.4. Prevention of Further Loss
Where the initial investigation provides reasonable grounds for suspecting a member or members of staff of fraud, the Fraud Investigation Group will need to decide how to prevent further loss. Fraudulent or corrupt activity is regarded as a breach of contract and where there are reasonable grounds for suspicion then suspension, with or without pay, of the suspects is likely, pending the outcome of enquiries. The rights of staff on suspension must be acknowledged, for example their right to union representation and to be informed of the reason for their suspension.
It may be necessary to plan the timing of suspension to prevent the suspects from destroying or removing evidence that may be needed to support disciplinary or criminal action. Suspect(s) should be supervised at all times before leaving the Company’s premises. They should be allowed to collect personal property under supervision, but should not be able to remove any property belonging to the Company. Any security passes and keys to premises, offices and equipment should
be returned.
Advice should be obtained on the best means of denying access to the Company while suspects remain suspended (for example by changing locks and informing security staff not to admit the individuals to any part of the premises). Similarly, access permissions to the Company’s computer systems and communication materials should be withdrawn without delay.
Internal audit should consider whether it is necessary to investigate systems other than that which has given rise to suspicion, through which the suspect may have had opportunities to misappropriate the Company’s assets.
At this stage, the Company should decide if external parties including the funding body and the Police are to be involved. Delays in contacting the Police may prejudice future enquiries and alerting them immediately is important since they will be able to advise the Company on how best to proceed and the most effective methods to gather evidence.
2.5. Conducting a Fraud Enquiry
Once it is agreed that there is sufficient evidence to justify a fuller investigation, the Fraud Investigation Group should meet with the Police, where appropriate, to decide who is best placed to undertake the further investigation. Should it be decided that an internal investigation is appropriate, either in tandem with a Police investigation, or on its own, it is important that it is undertaken by individuals with experience in fraud investigations. This is most likely to be the Internal Auditors, supported as necessary by Company staff who may have the specialist knowledge required.
Where fraud and corruption are suspected, contact by the Members of the Board of Directors and the Chief Compliance Officer with the local fraud squad should be considered in order to agree an appropriate course of action.
For internal investigations, the Fraud Investigation Group should agree the following:
• detailed remit and scope for the investigation; for example, is it to confirm that there is sufficient evidence to support the allegations, to gather evidence for the Police, or does the Company wish to quantify the total potential loss?
• who should undertake the investigation
• reporting procedures and deadlines
• a programme of regular meetings.
There is a clear requirement to record all details fully, accurately and in a manner that is accessible. The Police should be able to advise on an appropriate recording format. Developing a simple form to log all events and contacts made will provide a quick summary, ease the recording process and provide documented support for any future enquiries or possible prosecution.
2.6. Recovery of Losses
It is important that any losses incurred by the Company or by Borrower are fully and accurately recorded and that costs are correctly apportioned. In addition to the direct cost of losses attributable to fraud, all costs associated with enquiries should be recorded. These will be required under loss reporting procedures and may also be required by the courts if the decision to prosecute is taken and in determining any assessment of costs or compensation and insurance
recoveries.
Where the loss is substantial, legal advice should be obtained without delay about the need to freeze the suspect’s assets through the court, pending conclusion of the investigation. Legal advice should also be obtained about prospects for recovering losses through the supreme court, where the perpetrator refuses repayment.
2.7. Staffing Issues
A member of the Justice Department is on the Fraud Investigation Group as further investigations may have employee rights and disciplinary repercussions. Justice Department have a role to play in ensuring confidentiality and protecting individuals who report fraud, and any operational and policy developments should include input from Justice Department.
Of crucial importance in any fraud investigation is the need to conduct enquiries within the parameters of relevant laws and regulations. Employees have statutory rights and, if infringed, the likely success of disciplinary action or prosecution is diminished. It is vital therefore that any interviews with members of staff who are alleged to have acted fraudulently are undertaken strictly in accordance with established procedures.
For significant cases, no interviews should progress without first seeking advice from Justice Department on the relevant procedures and rules to be followed. In particular, those involved in interviewing should have knowledge of current employment legislation and where appropriate seek advice on criminal legislation.
2.8. Reporting During the Investigation
The Fraud Investigation Group should provide a confidential report to the Supreme Court, the Audit Committee, the Chief Compliance Officer and the external audit partner at least monthly, unless the report recipients request a lesser frequency. The scope of the report should include:
• quantification of losses
• progress with recovery action
• progress with disciplinary action
• progress with criminal action
• estimate of resources required to conclude the investigation
• actions taken to prevent and detect similar incidents
Any variation from the approved fraud response plan, together with reasons for the variation, should be reported promptly to the Supreme Court and the Audit Committee.
2.9. Concluding an Investigation
At the end of a case, irrespective of the outcome, it is important that the progress of the investigation is reviewed to see what lessons can be learned and to assess the effectiveness of the action taken. Such reviews will help identify any weaknesses in internal control that initially led to the fraud and should highlight any deficiencies in these systems for reporting and investigating, enable more effective future enquiries and precipitate changes to internal procedures designed to prevent re-occurrence. On completion of a special investigation, a written report should be submitted to the
Audit Committee for consideration and discussion containing:
This report will normally be prepared by the Fraud Investigation Group or Internal Audit.
Checklist for Line Managers
The following is a checklist of points for consideration following the reporting of an alleged fraud to management:
• Do not rush in – consider all options and plan the approach.
• Establish the facts without alerting anyone.
• Maintain confidentiality.
• Make an immediate note of everything reported. Confirm accuracy of the notes with whoever is reporting the details to ensure clear understanding.
• Take steps to minimise any immediate further losses.
• Secure any evidence.
• Inform Director of Finance or member of the Fraud Investigation Group. Checklist for the Fraud Investigation Group
The following is a checklist of points for consideration following the reporting of an alleged fraud by line management to a member of the Fraud Investigation Group:
• Convene a meeting of the Group to consider the allegation.
• Conduct an initial investigation to establish the substance of the allegation.
• Consider legal implications.
• If substantiated, inform the Principal etc.
• Agree if further investigation is required and who will undertake it.
• Agree a remit, and establish scope and reporting deadlines for the investigation.
• Ensure the investigating team has adequate resources, including secure storage.
• Prepare for interviews thoroughly.
• Ensure existing staff disciplinary procedures are followed.
• Secure any evidence.
• Assume the worst-case scenario in terms of losses and staff involved.
• If not already requested to undertake the investigation, inform the Police and the funding body as appropriate.
• Hold regular progress meetings at which progress and agreed action are documented.
• Identify all internal and external sources of information and evidence.
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Head Office
100 Pall Mall, London, SW1Y 5NQ.
+44.207-123-0000
+44.207-123-0000
info@directinvestmentfunding.com
Spain Branch
Paseo de la Castellana 135, 28904 Madrid.
+34 613 213 113
+34 613 213 113
info@directinvestmentfunding.com
Please let us know if any of you have found anything negative about DIRECT INVESTMENT FUNDING LIMITED.
Your help will be deeply appreciated.
You have reached the cached page for directinvestmentfunding.com/fraud-protection/
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You searched for: direct investment funding limited FRAUD WARNING We have highlighted matching words that appear in the page below.
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Skip to content
Welcome to Direct Investment Funding Limited
Welcome to Direct Investment Funding Limited
Call Support 24/7 Standby Team
Email Support info@directinvestmentfunding.com
Location 100 Pall Mall, London, SW1Y 5NQ
Home
About Us
OUR SERVICES
Loans
Letter of Credit
Bank Guarantee
Syndicated Loans
Project Funding
FINANCE MANAGEMENT
Intruder protection
ATM Management
Fire Protection
Telesurveillance – Telecontrol
VAULT TRANSPORTATION
Security
Contact Us
Fraud Protection
Home > Fraud Protection
I. PREFACE
Direct Investment Finance Limited (DIFL) in other to combat any form of corruption, collusion, coercion, fraud, money laundering obstruction and terrorist financing within DIFL work group as update in DIFL’s Anti-Fraud Policy dated 21 August 2020. Direct Investment Finance Limited (DIFL) has a duty to its stakeholders to take all responsible steps to prevent fraud occurring, whether perpetrated by staff, contractors and suppliers, Borrower/Promoters other organisations or members of the public.
The Direct Investment Finance Limited (DIFL) will maintain robust control mechanisms to both prevent and detect fraud. All staff member regardless of position or qualification have a responsibility for maintaining documented control systems and must be seen to be setting an example by complying fully with procedures and controls. The effectiveness of controls will be subject to cyclical review by the Internal Auditors.
The DITL conducts investigations stems from:
(i) London Supreme Court of Justice;
(ii) Article 12 of the DIFL Statute;
(iv) DIFL members of the Board of Governors’ Decision of 21 August 2020 concerning DIFL’s operations in the United Kingdom.
Created by the British Ombudsman, the DIFL is an authorised financial service provider in Europe and Arabian countries functioning under the laws of England and Wales AND Spain. As such, we operate in accordance with the British legal framework and DIFL Statute, Article 12 of which implies that: “In its financing activities, the DIFL shall employed
its funds in the interests of the Group.”
DIFL shall ensure that loans are used according to the agreed purpose. In this context, DIFL shall endeavor to make sure that its operations are in line with the DIFL Code of conduct to combat corruption and fraudulent practices.
Consequently, DIFL will ensure that all prohibited conduct does not occur, and where it does occur, it will be handled adequately and in a timely manner. To this point, procedures for investigation shall be carried out.
In regards to this DIFL will align it’s policies with foreign practice:
(i) The Organisation for Economic Co-operation and Development’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
(ii) United Nation
(iii) the COE Criminal Law Convention.
(iv) the FATF.
(iv) the (IFIs) Anti-Corruption Task Force.
All members of staff have a responsibility to protect the assets and reputation of the company and are expected to be alert to the potential for fraud. Line managers should brief staff on the common types of fraud perpetrated in their areas of responsibility. Confidential mechanisms have been established to allow staff to report suspected frauds to management. All reported suspicions will initially be investigated by the Fraud Investigation Group. The members of such a group may include:
The Members of the Board of Directors
The Audit Committee
Legal Department
Secretary
Further investigation can be carried by a notarized body through the Supreme Court of Justice.
Procedure for Fraud Prevention, Detection and Investigation
1.1. Introduction
The Direct Investment Finance Limited(DIFL) procedure for fraud prevention, detection and investigation is set out below.
The objectives of the procedure are to:
Encourage staff to be aware of fraud;
Bring suspected fraud to notice;
Provide a framework response plan for investigating and reporting fraud; and
Ensure both alleged and proven fraud are dealt with in a consistent and timely manner.
The Direct Investment Finance Limited(DIFL) has a unique role to play in the community and any instances of fraud or corruption may be damaging to public confidence and support. Losses due to fraud, theft or corrupt practices can have a direct effect on jobs and the level and quality of service provision. Vigilance is essential since all staff are responsible for ensuring that the best possible service is provided to DIFL customers, borrowers, promoters and that value for money is secured from public funds.
Successful fraud prevention involves creating an environment which inhibits fraud. Taking immediate and vigorous action if fraud is detected is not only necessary to prevent future losses, but also helps deter frauds. An employee who is alert to the possibility of fraud and who acts accordingly on a day-today basis is a powerful deterrent against fraud.
1.2. Fraud Prevention
Fraud can be defined as ‘any act of wildful dishonesty to gain individual or collective advantage’. It is taken to include theft, misuse of property, corruption, the alteration of financial or other records or any unauthorised act which results directly or indirectly in financial gain to the perpetrator or a third party. Fraud can he perpetrated against an employee, borrower/promoter, suppliers, Government Agencies or Departments, or the public. Employee should be aware that gifts, including hospitality, offered by contractors, suppliers and service providers may place employees in a vulnerable position.
1.3. Management Responsibility and Risk Management
The prime responsibility for preventing fraud lies with management through:
a. identifying risks to which systems and procedures are exposed;
b. designing, implementing, documenting and operating of internal controls;
c. establishing an environment that promotes compliance with internal controls;
d. promoting fraud awareness amongst staff; and
e. fostering an ‘anti-fraud’ culture.
However, while management committees are responsible for assessing and controlling the level of risk within their areas of authority, it is the responsibility of all staff to be aware of fraud and to take the necessary steps to minimize the risk to the Company.
Managing the risk of fraud is the same in principle as managing any other business risk. It is best approached systematically both at organisational and operational level. Managers should identify risk areas, assess the scale of risk, allocate responsibility for managing specific risks and implement and test controls to minimize the risks.
Management also have a responsibility to familiarize themselves with common fraud techniques in areas for which they have control. Managers should also ensure that staff in their areas of operation are familiar with common types of fraud.
1.4. Internal Controls
In the quest to combat fraud, coercion, corruption, obstruction, collusion, financing of terrorism and money laundering as state below:
Internal controls are the key element in preventing fraud. They include both financial and non-financial controls, for example annual leave records, and those that are in place to safeguard the misuse of the company’s assets, including computer systems. The financial regulations are one example of these controls. The Company’s financial and other non-financial procedures are the definitive guide and are available to all staff. It is the responsibility of management to
ensure that controls in their area of responsibility have been documented and communicated. In order to set a good example, managers should be seen to be complying with all controls. The emphasis should be on creating a culture of honesty and fraud detection, not increasing the volume of detailed operational and supervisory checks and controls, unnecessarily.
1.5. Management Checks
The prevention and detection of fraud and impropriety is only possible where strong internal controls are present and constantly applied. Routine checks and monitoring by management to ensure that procedures are being followed are, therefore, essential. The benefits of implementing a culture of strong management controls:
A deterrent effect when it is known that management is actively involved in ensuring that procedures are followed, and
The results of the checks will allow management to identify any operational areas where controls are not being uniformly applied and investigate whether systems have been exploited. Management should periodically monitor compliance with controls and may also ask the Internal Auditors to test compliance. It should be emphasized that the prime function of internal audit is to evaluate the effectiveness of the overall framework of internal control, with management ensuring implementation and monitoring of the framework.
Common excuses for non-compliance with controls are that they are no longer applicable, insufficient time is available or they are not appropriate. It is important that such comments are reported to management so that the need for the controls can be re-evaluated.
1.6. Staff/Training
Staff provide the best protection against fraud and corruption. It is important, therefore, that the Company’s policy on fraud prevention and investigation is fully communicated to all staff. The lack of clear guidance and ignorance of procedures will often be the first excuse used by offenders. The recruitment of suitable staff is the Company’s first defense in preventing fraud. Best practice recruitment policies such as detailed application forms including a statement on criminal records, communication with referees and past employers and verification of educational and professional qualifications will assist in this approach.
Staff awareness of policy and procedures is fundamental to the effective operation of systems. The Company will comply with best practice, including:
i. publication of Company policy on fraud, corruption and impropriety including easy access to it for all staff;
ii. instruction in and discussion of control and probity issues as part of staff induction;
iii. formal staff training on operational procedures;
iv. desktop instructions for specific tasks; and
v. regular staff notices regarding changes to Financial Regulations and financial procedures.
1.7. Fraud Detection
The primary responsibility for detecting fraud lies with management through the implementation, documentation and operation of effective systems of internal control. The Company’s Internal Auditors through their evaluation of the control framework also have a role to play in preventing and detecting fraud. All staff have a responsibility to be
aware of the potential for fraud and take the necessary steps to minimize the risk to the Company. Properly and consistently applied procedures for reporting and investigating fraud play an important part in preventing further fraud. The Company expects that reported suspicions will be investigated. The Company’s fraud response plan set out in the next
section must be implemented where fraud is suspected.
FRAUD RESPONSE PLAN
2.1. Introduction
Management and staff are likely to have little experience in dealing with fraud and when suspected cases arise, may be unsure of the appropriate action to take. The objectives of this response plan are:
• to provide a documented framework to which the Company can refer in the event that fraud is suspected or reported; and
• to ensure that in the event of fraud, timely and effective action is taken to prevent further losses, identify fraudsters, safeguard evidence, minimise publicity, reduce adverse effects on the business and to learn lessons.
Fraud investigation checklists for line managers and the Fraud Investigation Group are outlined.
2.2. Reporting Fraud
All actual or suspected incidents of fraud should be reported without delay to the Fraud Investigation Group or other member of the Fraud Investigation Group. The members are:
Company Secretary General
Company Board of Directors
Member of the Audit Committee
Chief Compliance Officer
When staff report suspected fraud it is important that their suspicions are treated seriously and that all details provided by the reporting employee are recorded accurately and in a timely manner. They should be repeated to the reporting employee to confirm understanding. It is essential that staff are put at ease, since the decision to report the suspected fraud may be traumatic for the individual concerned. Staff (or others) reporting fraud should be assured that
all information will be dealt with in the strictest confidence and that their anonymity will be preserved if requested, unless that is incompatible with a full and fair investigation.
Regardless of the direction any future internal or Police investigation may take, the anonymity of any ‘whistleblower’ must be guaranteed during the initial investigation.
Having recorded the details of the individual case, the Management Committee should, within 24 hours, hold a meeting of the Fraud Investigation Group to decide on the initial response.
All allegations by DIFL staff members, DIFL’s project related parties, other counterparts and partners, or members of the public (including civil society) of suspected Prohibited Conduct should under this policy be reported to the Fraud Investigations Division at the DIFL which will acknowledge receipt of the allegation. A report can be made:
• by letter;
• by email to investigations@directinvestmentfunding.com;
• through the on-line form available on the DIFL website;
• by telephone or
• by fax (+1 800-501-9809)
(D) Independent Complaints Mechanism.
In addition to allegations of Prohibited Conduct, any person or group who believes there may have been a case of maladministration within the DIFL Group can lodge a complaint with the DIFL Secretary General under the DIFL Complaints Mechanism.
This section sets out the procedures for investigations of Prohibited Conduct, which are handled by the Inspectorate General through its Fraud Investigations Division in compliance with and without prejudice concerning investigations conducted by the Supreme Court of Justice, as interpreted by the Court of Justice in its judgment of and the Board of Governors concerning DIFL’s cooperation with the Supreme Court of Justice. Allegations concerning money laundering and financing of terrorism are investigated by the Fraud Investigations Division in close cooperation with the Office of the Chief Compliance Officer.
(E) Protection of Staff Members and External Complainants.
In order to conduct an investigation, the Fraud Investigations Division and the Supreme Court of Justice shall have full access to all relevant personnel, information, documents and data, including electronic data, within the DIFL, in accordance with the applicable procedures.
The Fraud Investigations Division and the Supreme Court of Justice shall have the right to examine and copy the relevant books and records of the relevant Project related parties or DIFL other counterparts and partners, as appropriate.
DIFL may sign a Memorandum of Understanding with law enforcement agencies or other similar organisations in order to facilitate the exchange of information on cases of mutual interest concerning suspected Prohibited Conduct, subject to the respect of applicable data protection provisions.
Likewise, DIFL may apply to become parties civile in judicial proceedings related to its investigations when it is considered to be in DIFL’s interest to do so, notably to maximize the information and evidence available to DIFL concerning suspected.
All allegations of Prohibited Conduct will be treated by DIFL as strictly confidential, and may be made anonymously.
As regards reports made by an DIFL Staff Member, the Staff Code of Conduct and the DIFL Whistleblowing Policy provide that DIFL will ensure confidential treatment for members of staff who make bona fide reports of suspected misconduct, and that such members of staff will enjoy the assistance and protection of DIFL. The Head of the Fraud Investigations Division, Direct Investment Finance Limited.
Mal administration means poor or failed administration. This occurs when the DIFL Group fails to act in accordance with the applicable legislation and/or established policies, standards and procedures, fails to respect the principles of good administration or violates human rights. Some examples of failure to respect the principles of good administration, as set by the British Ombudsman, are: administrative irregularities, unfairness, discrimination, abuse of power, failure to reply, refusal of information, unnecessary delay. Mal administration may also relate to the environmental or social
impacts of the DIFL Group activities and to project cycle related policies and other applicable policies of the DIFL.
2.3. Initial Enquiry
On receiving the details of the suspected fraud, the Fraud Investigation Group should undertake as limited review as necessary to establish whether further action needs to be taken. This may be an investigation, led by Internal Audit. The decision by the group to initiate a special investigation shall constitute authority to internal audit to use time provided in the internal audit plan for special investigations, or contingency time, or to switch internal audit resources from planned audits.
If this initial investigation suggests that suspicions are confirmed, the group will decide which body is best placed to undertake further investigative work and will inform the Principal, the Chairman of the Audit Committee, the Supreme Court of Justice, auditors, the funding body and the Police as appropriate. The circumstances in which the Compliance Department must inform the funding body of actual or suspected fraud are set out in the funding body’s audit code of practice. The Principal is responsible for informing the funding body of any such incidents.
2.4. Prevention of Further Loss
Where the initial investigation provides reasonable grounds for suspecting a member or members of staff of fraud, the Fraud Investigation Group will need to decide how to prevent further loss. Fraudulent or corrupt activity is regarded as a breach of contract and where there are reasonable grounds for suspicion then suspension, with or without pay, of the suspects is likely, pending the outcome of enquiries. The rights of staff on suspension must be acknowledged, for example their right to union representation and to be informed of the reason for their suspension.
It may be necessary to plan the timing of suspension to prevent the suspects from destroying or removing evidence that may be needed to support disciplinary or criminal action. Suspect(s) should be supervised at all times before leaving the Company’s premises. They should be allowed to collect personal property under supervision, but should not be able to remove any property belonging to the Company. Any security passes and keys to premises, offices and equipment should
be returned.
Advice should be obtained on the best means of denying access to the Company while suspects remain suspended (for example by changing locks and informing security staff not to admit the individuals to any part of the premises). Similarly, access permissions to the Company’s computer systems and communication materials should be withdrawn without delay.
Internal audit should consider whether it is necessary to investigate systems other than that which has given rise to suspicion, through which the suspect may have had opportunities to misappropriate the Company’s assets.
At this stage, the Company should decide if external parties including the funding body and the Police are to be involved. Delays in contacting the Police may prejudice future enquiries and alerting them immediately is important since they will be able to advise the Company on how best to proceed and the most effective methods to gather evidence.
2.5. Conducting a Fraud Enquiry
Once it is agreed that there is sufficient evidence to justify a fuller investigation, the Fraud Investigation Group should meet with the Police, where appropriate, to decide who is best placed to undertake the further investigation. Should it be decided that an internal investigation is appropriate, either in tandem with a Police investigation, or on its own, it is important that it is undertaken by individuals with experience in fraud investigations. This is most likely to be the Internal Auditors, supported as necessary by Company staff who may have the specialist knowledge required.
Where fraud and corruption are suspected, contact by the Members of the Board of Directors and the Chief Compliance Officer with the local fraud squad should be considered in order to agree an appropriate course of action.
For internal investigations, the Fraud Investigation Group should agree the following:
• detailed remit and scope for the investigation; for example, is it to confirm that there is sufficient evidence to support the allegations, to gather evidence for the Police, or does the Company wish to quantify the total potential loss?
• who should undertake the investigation
• reporting procedures and deadlines
• a programme of regular meetings.
There is a clear requirement to record all details fully, accurately and in a manner that is accessible. The Police should be able to advise on an appropriate recording format. Developing a simple form to log all events and contacts made will provide a quick summary, ease the recording process and provide documented support for any future enquiries or possible prosecution.
2.6. Recovery of Losses
It is important that any losses incurred by the Company or by Borrower are fully and accurately recorded and that costs are correctly apportioned. In addition to the direct cost of losses attributable to fraud, all costs associated with enquiries should be recorded. These will be required under loss reporting procedures and may also be required by the courts if the decision to prosecute is taken and in determining any assessment of costs or compensation and insurance
recoveries.
Where the loss is substantial, legal advice should be obtained without delay about the need to freeze the suspect’s assets through the court, pending conclusion of the investigation. Legal advice should also be obtained about prospects for recovering losses through the supreme court, where the perpetrator refuses repayment.
2.7. Staffing Issues
A member of the Justice Department is on the Fraud Investigation Group as further investigations may have employee rights and disciplinary repercussions. Justice Department have a role to play in ensuring confidentiality and protecting individuals who report fraud, and any operational and policy developments should include input from Justice Department.
Of crucial importance in any fraud investigation is the need to conduct enquiries within the parameters of relevant laws and regulations. Employees have statutory rights and, if infringed, the likely success of disciplinary action or prosecution is diminished. It is vital therefore that any interviews with members of staff who are alleged to have acted fraudulently are undertaken strictly in accordance with established procedures.
For significant cases, no interviews should progress without first seeking advice from Justice Department on the relevant procedures and rules to be followed. In particular, those involved in interviewing should have knowledge of current employment legislation and where appropriate seek advice on criminal legislation.
2.8. Reporting During the Investigation
The Fraud Investigation Group should provide a confidential report to the Supreme Court, the Audit Committee, the Chief Compliance Officer and the external audit partner at least monthly, unless the report recipients request a lesser frequency. The scope of the report should include:
• quantification of losses
• progress with recovery action
• progress with disciplinary action
• progress with criminal action
• estimate of resources required to conclude the investigation
• actions taken to prevent and detect similar incidents
Any variation from the approved fraud response plan, together with reasons for the variation, should be reported promptly to the Supreme Court and the Audit Committee.
2.9. Concluding an Investigation
At the end of a case, irrespective of the outcome, it is important that the progress of the investigation is reviewed to see what lessons can be learned and to assess the effectiveness of the action taken. Such reviews will help identify any weaknesses in internal control that initially led to the fraud and should highlight any deficiencies in these systems for reporting and investigating, enable more effective future enquiries and precipitate changes to internal procedures designed to prevent re-occurrence. On completion of a special investigation, a written report should be submitted to the
Audit Committee for consideration and discussion containing:
This report will normally be prepared by the Fraud Investigation Group or Internal Audit.
Checklist for Line Managers
The following is a checklist of points for consideration following the reporting of an alleged fraud to management:
• Do not rush in – consider all options and plan the approach.
• Establish the facts without alerting anyone.
• Maintain confidentiality.
• Make an immediate note of everything reported. Confirm accuracy of the notes with whoever is reporting the details to ensure clear understanding.
• Take steps to minimise any immediate further losses.
• Secure any evidence.
• Inform Director of Finance or member of the Fraud Investigation Group. Checklist for the Fraud Investigation Group
The following is a checklist of points for consideration following the reporting of an alleged fraud by line management to a member of the Fraud Investigation Group:
• Convene a meeting of the Group to consider the allegation.
• Conduct an initial investigation to establish the substance of the allegation.
• Consider legal implications.
• If substantiated, inform the Principal etc.
• Agree if further investigation is required and who will undertake it.
• Agree a remit, and establish scope and reporting deadlines for the investigation.
• Ensure the investigating team has adequate resources, including secure storage.
• Prepare for interviews thoroughly.
• Ensure existing staff disciplinary procedures are followed.
• Secure any evidence.
• Assume the worst-case scenario in terms of losses and staff involved.
• If not already requested to undertake the investigation, inform the Police and the funding body as appropriate.
• Hold regular progress meetings at which progress and agreed action are documented.
• Identify all internal and external sources of information and evidence.
Direct Finance Loan
Project Funding
Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors
Issuance of BGs
Banks guarantees are written obligations of the issuing bank to pay a sum to a beneficiary on behalf of their customer in the event that the customer himself does not pay the beneficiary.
Issuance of LCs
Standby Letters of Credit (or “LC's”) are written commitments of the issuing bank to pay a sum to a beneficiary on behalf of their customer in the event that the customer himself does not pay the beneficiary.
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