The City of Bulawayo (BCC) is joining the global community in commemorating International Fraud Awareness Week (IFAW) from November 13 to 17, 2023.
This annual initiative, spearheaded by the Association of Certified Fraud Examiners (ACFE), aims to raise awareness about the prevalence and impact of fraud and promote effective anti-fraud practices.
According to ACFE estimates, organisations worldwide lose an average of 5% of their annual revenue to fraud. In the case of the City of Bulawayo, this translates to a staggering +/- US$13,203,220.80 based on its 2024 total budgeted revenue.
The BCC emphasises that every employee, regardless of position, plays a crucial role in preventing fraud. By implementing robust anti-fraud controls and encouraging a culture of vigilance, organizations can significantly reduce their financial losses and safeguard their integrity.
The ACFE’s Report to the Nations identifies six key anti-fraud controls that have demonstrated effectiveness in minimising fraud losses.
“Every employee, regardless of position, can help prevent fraud. Organisations should consider putting anti-fraud controls in place that are proven to reduce the cost of fraud. According to the Report to the Nations, the six anti-fraud controls that showed the greatest association with lower fraud losses were an established, company-wide code of conduct, an internal audit department, management certification of financial statements, external audit of internal controls over financial reporting, management review and hotlines.”
The BCC also highlights the importance of recognizing behavioural red flags that may indicate potential fraudulence. While these indicators should not be taken as definitive proof of wrongdoing, they can serve as valuable clues to warrant further investigation.
“However, it is important to note that sometimes these indicators also apply to honest people, so their presence alone does not mean that someone is committing fraud. Based on ACFE research, here are the six most common behavioural red flags of fraud: living beyond means which is characterised by spending big. It is evident if an employee’s salary does not line up with their lifestyle,” BCC noted.
“Another indicator is financial difficulties. Financial problems are often cited as a motivation by those who commit occupational fraud. Examples include high student loan debt, car loans, mortgages, taxes or high credit card debt, having a close relationship with vendors or customers, control issues or unwillingness to share duties, irritability, suspiciousness or defensiveness where potential fraudsters may act unusually paranoid or harsh with colleagues to project suspicion onto others or to discourage questions.”
