Annual Report 2004-05

Internal Audit and Risk Management Arrangements

Ethics Awareness and Fraud Control

Defence has a well-developed program of ethics and fraud awareness. In 2004-05, over 290 ethics and fraud awareness presentations were given to approximately 13,000 Defence personnel across Australia. In addition, approximately 5,000 Defence personnel undertook awareness training via the Defence Online Learning Campus.

Ethics Awareness

The program also included the provision of material such as videos, newsletters and a dedicated intranet site for information and advice. During 2004-05, a new video was launched: Against the Odds. It is a reality-style video based on an actual case. The video looked at the fraud from a number of perspectives, including the adequacy of management controls, the consequences of the fraud for the individual concerned and the gambling addiction that motivated the fraud in the first instance.

Fraud Control

During 2004-05, in line with the Commonwealth Fraud Control Guidelines, Defence undertook a new fraud risk assessment. This assessment will be used as the basis for developing a new Defence Fraud Control Plan (No. 6), which is scheduled for completion by December 2005.

During 2004-05, 445 fraud investigations were registered within Defence and 366investigations were completed (a number of those completed being registered in the previous years). Approximately 20 per cent of completed investigations resulted in criminal, disciplinary and/or administrative action. Of these, approximately 60 per cent related to action under the Defence Force Discipline Act 1982.

The determined fraud loss for completed cases in 2004-05 was some $1.0m and, during the year, monies awarded and recovered amounted to around $0.05m. Over the last ten fiscal years, detected fraud has averaged an estimated $1.8m per year, within a range of $1.0m to$3.1m per annum.