Professional Documents
Culture Documents
Many managers and business owners are unaware of the fraud risks inherent in their
operations and fail to adequately monitor these risks. This often results in a significant
amount of fraud going undetected and unreported.
Theft and fraud control should form an integral part of your clubs risk management strategy.
All clubs must show that they have appropriate theft and fraud prevention systems in place
by:
Adopting a Theft and Fraud Prevention Policy;
Identifying risk areas within club operations; and
Implementing fraud prevention strategies to deter or minimise the opportunities for
theft and fraud.
This standard will assist clubs to develop and adopt policies, procedures and controls to
prevent theft and fraud. These policies, procedures and controls should be incorporated into
all aspects of the clubs governance, management and operations, as well as being
reviewed and reported on a regular basis to ensure they are working effectively.
Templates
A Theft and Fraud Prevention Policy template is provided at ATTACHMENT A.
A Theft and Fraud Control checklist to assist clubs to identify risk areas is provided at
ATTACHMENT B. This checklist should be completed annually and reported to the club
Committee and GRNSW.
Clubs must also provide GRNSW with a copy of their Theft and Fraud Control checklist
biennially (once every two years).
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OPERATING STANDARDS FOR NSW GREYHOUND RACING CLUBS
Fraud is a broader and more indirect act, although it may have a similar result as theft in the
end. Fraud involves a person, by any deception or dishonestly, obtaining the property of
another with the intent of permanently depriving that person or organisation of the property.
Because fraud is a hidden cost, it can be very hard for business owners and managers to
identify it and stop the losses occurring. Instances of fraud can occur in all areas of a club
regardless of its size. Areas of fraud risk include (but are not limited to):
Finance and administration - for example, diversion of payments, false invoicing,
falsified accounting records;
Assets - for example, theft of cash (from points of sale or registers/safes), stock or
equipment; and
Corruption and misconduct - for example, kickbacks from suppliers in exchange for
continued business.
The Theft and Fraud Control Checklist provided at ATTACHMENT B will help you to identify
risk areas and to determine whether current procedures and controls within your club are
sufficient, or whether they need to be improved or tightened up.
You can generally identify the most obvious risk areas such as those associated with club
monies (i.e. cash handling or reimbursement of expenses incurred for the club) and supplies
or stores (e.g. liquor). Other areas where people may practice fraud may include race
nominations, manipulation of prize monies or deception in relation to entitlements from the
Scheme of Distribution.
Theft or fraud can occur at any level of the club, including the Committee. While theft may
often be an opportunistic act, fraud is more likely to be an activity that may involve collusion
between a number of people and may be an ongoing activity.
It is important to recognise that no theft or fraud is possible without opportunity. The key to
good risk management control is to:
Identify the opportunities for theft and fraud;
Determine the level of risk; and
Introduce procedures and controls that remove or reduce the opportunity for theft and
fraud.
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OPERATING STANDARDS FOR NSW GREYHOUND RACING CLUBS
The Committee must ensure that the club's Theft and Fraud Prevention Policy is
communicated to club management, employees and volunteers, as well as to other users of
the club's facilities.
Clubs should have procedures in place that require any expenditure materially in excess of
budget, or not covered by the budget at all, to be approved by the Committee.
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OPERATING STANDARDS FOR NSW GREYHOUND RACING CLUBS
Financial Controls
Clubs need to be able to demonstrate that they have put into place proper controls to ensure
that all financial transactions are properly authorised, documented and recorded. Controls
should be based on prudent practice rather than reliance on trust of the individual.
Authorisation of Transactions
Clubs must have a list of those people authorised to approve various types of transactions
within budget. The Committee should approve and minute such authorisation and specify
any limits to the authority. They should cover:
Purchase orders;
Cheque requisitions;
Cheque signatories (two to sign); and
Petty cash.
All cheques should be subject to double signatory requirements, which must be provided to
the club's bank and kept up-to-date when Committees change. Pre-signing of blank cheques
by one of the signatories should not be permitted.
You must take particular care with electronic payments. While convenient and efficient,
single password access arrangements will not provide adequate security. Many financial
institutions now have provision for double passwords, which can be allocated to different
people.
Prompt and accurate recording of transactions provides the basis for timely management
reporting and acts as an early check of the adequacy on the 'paper trail'. Any irregularities in
authorisations should be noted at the time transactions are recorded and immediately
followed up by the club Treasurer.
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OPERATING STANDARDS FOR NSW GREYHOUND RACING CLUBS
Whether using an accounting software package or a manual cash book for bookkeeping
purposes, transactions should be recorded at least on a weekly basis for all clubs, except
Non-TAB clubs which should ensure they are entered at
Requirement least monthly
Examples to allow reconciliation
of Verification
with monthly bank statements.
First aid requirements to be Documented assessment of first aid requirements:
assessed and a system is in place
Where computerised records are maintained, Type and number
restrict of first aid
computer kits. wherever possible
access
to ensure that the first aid system
(e.g. through the use of passwords). Accounting
Number of first aid officers. settings should prevent
software security
is appropriate to the site
amendment
operations.
of entries other than through journal
Any entries.
special requirements.
Any legal requirements.
The Treasurer or person responsible for maintaining the records concerned should also
Re-stocking checklist.
keep paper records secure.
Need for portable kits.
Trained
Cash and first aiders
Cheque should be
Handling There shall be a list of first aid officers and contact details
Procedures
available on club premises at all displayed near the first aid kit.
Cash handling
times, represents
the number of firstaaiders
major area of risk for clubs, particularly where many small
First aid officers should have a current certificate.
transactions occur,
needs to take e.g. gate
account takings, bar trading.
of the
There should be a register of first aid certificates and
number of the visitors.
records of first aid training.
You must have procedures in place which provide a basis for reconciliation and audit, such
as:There must be a system set up to Identification of personnel exposed:
ensure employees are not Procedures and work instructions in place for handling
Consecutively
exposed numbered admission
to blood borne tickets;
sharps.
pathogens.
Balancing-off of cash registers on a daily basis
Provision (with standard
of protective clothing.recording of any
irregularities); Sharps containers.
Available
Pre-numbered receipting and dating of anyexposure management
non-trading program.
cash receipts (e.g.
membership dues, sponsorship cheques received); and
Issue of pre-numbered invoices/payment slips.
While inward cheques do not present the same level of risk as cash receipts, payment of
cheques to a third party account does happen. Cheques may also 'bounce'. Club procedures
should include:
Pre-numbered receipting of all cheque payments received; and
Requesting and recording identification from any payers about whom the club does
not hold personal contact details.
Clubs should consider the use of debit or credit card facilities, as well as electronic payment
facilities such as BPay and Electronic Funds Transfer (EFT). However, these should only be
used if the system provides sufficient documentation to identify the payer and purpose of
payment to allow proper recording and allocation of receipts.
Note: Receipting facilities will depend on the nature of the accounting system used by the
club and may be either of a carbon copy type in book form or computer-generated.
Computerised receipt stationery should be pre-numbered by the printer and the receipt
number generated by the computer must be synchronised to that printed number when
issued. Where computerised receipt stationery is not pre-numbered by the printer, the
internal controls and procedures must prevent the issue of unauthorised receipts.
Where receipts are in book form, the books should be numbered in sequence to facilitate
identification in subsequent reconciliation and audit. If receipt books purchased from a
newsagent are used, unique receipt numbers should be created (e.g. by adding a unique
letter before the printed receipt numbers, which is recorded as part of the receipt number),
self-carbonising, loose-leaf custom printed, pre-numbered receipts, which incorporate the
simultaneous recording of the cash book journal (i.e. commonly referred to as a
multi-recording system), are acceptable if the form of the receipt and the procedures
employed are consistent with the financial management standards.
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OPERATING STANDARDS FOR NSW GREYHOUND RACING CLUBS
Banking
Clubs must maintain a separate bank account, through which all transactions (other than
petty cash - see below) should pass. This means that:
All receipts must be banked. Cash takings of any sort should not be used to pay
out-of-pocket expenses;
All expenses (other than petty cash) must be paid by cheque or electronic transfer;
Banking should be done on a regular basis, consistent with the level of takings and
safekeeping facilities at the club;
Banking slips should clearly identify cheque numbers or receipt references for monies
banked; and
The club's cash book (whether computer based or manual) should be reconciled
against its bank statements immediately after receipt of the bank statement (internet
banking can provide early access to bank statements). This will also facilitate timely
management reporting to the Committee and GRNSW.
The petty cash system should be based on an imprest system. The principle behind an
imprest system is that a petty cash float of a fixed amount (e.g. $100) is established by the
Treasurer or accountant initially drawing a cheque in favour of petty cash, which is handed to
the person responsible for maintaining the petty cash float and record. The proceeds from
the cheque are then used to meet small cash expenses, such as postage or stationery
purchases. When it is necessary to replenish petty cash, a petty cash claim is submitted to
the Treasurer containing a summary of how the money was spent (with supporting
documentation attached, i.e. receipts). The Treasurer then draws a cheque for this amount,
which reinstates the float to its former balance. Petty cash should always be replenished to
the original amount before financial year-end
The advantage of this system is that although the original float will always appear in the
accounts at that amount (in this case, $100), you will always know the type of expenses
involved at the time each subsequent cheque is drawn (details recorded on butt of the
cheque).
One person should be made responsible for petty cash management. This includes
maintaining a petty cash book and paying petty cash claims against proper authorised
documentation (petty cash voucher and receipt). It also involves reconciling the petty cash
book and cash on hand whenever the float is replenished or responsibility passes to another
person. The responsible person should also provide a breakdown of petty cash expenses
whenever replenishment is sought.
Other petty cash controls should include limiting the size of payments which can be made
from petty cash and ensuring payments must be approved by at least one responsible
officer. Also, club management should carry out spot reconciliations to verify there are no
shortages or unauthorised 'borrowing' of petty cash.
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OPERATING STANDARDS FOR NSW GREYHOUND RACING CLUBS
You should record other club assets in an asset register (see Standard 15 - Club Assets)
and check assets regularly to ensure they are in place. Any 'loans' of equipment or other
temporary absences (e.g. for repairs) should be authorised by a responsible officer and
recorded.
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OPERATING STANDARDS FOR NSW GREYHOUND RACING CLUBS
The procedures should clearly identify the person responsible for leading the investigation,
any internal investigation resources and what external resources are available. Contact
information should be listed (e.g. external auditor, investigator). Additionally, you should
consider what steps you need to take to preserve evidence for any investigation without
alerting the person suspected, as well as how to deal with suspects during the investigation
period.
Finally, you need to know how to ensure confidentiality of information to avoid defamation of
innocent parties, and at what stage and how to involve police (this will depend on the nature
of the suspected offence).
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ATTACHMENT A
Definitions
Fraud is defined as:
The intentional distortion of financial statements or other records by persons internal
or external to the club which is carried out to conceal the misappropriation of assets
or otherwise for gain; or
Obtaining a benefit by deceit or other dishonest conduct, to which the recipient is not
entitled.
Theft is generally understood to mean taking something that rightfully 'belongs' to another
person or organisation - for example, the theft of liquor from bar stocks.
Fraudulent or corrupt acts may include:
Financial issues where individuals or suppliers have fraudulently obtained money from the
club.
Equipment issues where the clubs equipment is used for inappropriate personal use.
A basic guide for determining fraud could include the following questions:
Was the conduct deceptive?
Was the conduct unlawful?
Was the conduct premeditated?
Did the conduct result in money, benefits or other advantages including information
being received to which the recipient was not entitled?
Principles
The <insert club name> is committed to the highest possible standards of openness, probity
and accountability in all of its affairs. It is determined to maintain a culture of honesty and
opposition to theft, fraud and corruption.
The club will not tolerate fraud, theft or dishonesty.
The club will thoroughly investigate all reported incidents of theft and fraud with the
upmost confidentiality.
The club will take firm and vigorous action against any individual or groups who have
committed theft and fraud against it. This may involve disciplinary action, and civil/or
criminal legal proceedings. Disciplinary proceedings may result in the dismissal of an
employee.
There will be no exceptions to this Policy.
Management responsibilities:
Identifying and assessing theft and fraud risks;
Implementing theft and fraud control measures;
Identifying and reporting internal and external fraud; and
Promoting an ethical culture within the club.
Employee/volunteer/contractor responsibilities:
All employees should behave ethically;
Assist in the identification of risk exposure to corrupt or fraudulent activities; and
Report to management any suspected theft, fraud or corruption.
In these circumstances it may be easier to ignore the concern rather than report what may
be a suspicion. Employee and volunteer safeguards are set out below and have been
established to encourage employees to raise cases of suspected theft and fraud within the
club.
In the event of a suspected theft or fraud, employees and volunteers should approach the
Theft and Fraud Control Coordinator or the President of the club.
Do not
Respond emotionally or take any hasty action, immediately confront the suspect, damage
documents or potential evidence, or limit the scope of your concerns to a specific issue.
Safeguards to Employees
The purpose of the Protected Disclosures Act (NSW) is to protect whistleblowers. The object
of the Act is to encourage and facilitate the disclosure, in the public interest, of corrupt
conduct, maladministration and serious and substantial waste in the public sector by:
enhancing and augmenting established procedures for making disclosures concerning such
matters; protecting persons from reprisals that might otherwise be inflicted on them because
of those disclosures; and, providing for those disclosures to be properly investigated and
dealt with.
Harassment or Victimisation
The club recognises that the decision to report a concern can be a difficult one to make due
to the fear of reprisal from those responsible for the malpractice. The club will not tolerate
harassment or victimisation and will take action to protect those who raise a concern in good
faith.
Confidentially
The club will do its best to protect an individuals identity when he or she raises a concern
and does not want their name disclosed. It must be appreciated, however, that the
investigation process may reveal the source of the information and a statement by the
individual may be required as part of the evidence.
Anonymous Allegations
This policy encourages individuals to put their names to allegations.
Concerns expressed anonymously are much less powerful, however they will be considered
at the discretion of the club. In exercising this discretion, the factors to be taken into account
would include:
The seriousness of the issue raised;
The credibility of the concern; and
The likelihood of confirming the allegation from the attributable sources.
Untrue Allegations
If an allegation is made in good faith, but not confirmed by the investigation, no action will be
taken against the originator. If, however, individuals make malicious or vexatious allegations,
action may be considered against the individual making the allegation.
Within 10 working days of the concern being received, the Theft and Fraud Control
Coordinator will write to the complainant:
Acknowledging that the concern has been received; and
Indicating how they intend to deal with the matter.
Where the loss is substantial, legal advice will be obtained regarding the appropriate action.
Identifying and measuring risk is a key issue in theft and fraud control. The Theft and Fraud
Control Coordinator will conduct a yearly risk assessment to identify, asses, respond,
monitor and review theft and fraud risks within the club.
Communication
All relevant employees, volunteers and contractors must receive a copy of this Policy.
Any questions or concerns should be directed to the Theft and Fraud Control Coordinator.
In cases of suspected theft and fraud involving the Theft and Fraud Control Coordinator,
employees can approach the club President or a member of the Committee.
Review
The Theft and Fraud Control Coordinator will review this Policy annually.
Any change in the Policy will be presented to the Committee for approval.
Adoption
This Policy was adopted by resolution of the <insert club name> Committee on <insert
date>.
ATTACHMENT B
Theft and Fraud Control Checklist
To minimise theft and fraud within your club you should consider putting a number of checks
in place to make sure you have a good control over all club operations, particularly your
finances.
The implementation of fraud prevention strategies should help to deter or minimise the
opportunities for theft and fraud within your club.
This checklist contains some practical questions to assist you to conduct a high-level risk
assessment of areas where theft and fraud is commonly targeted.
The checklist should be completed and provided to the club Committee annually.
Clubs with robust theft and fraud controls in place would answer "yes" to most of the
following questions.
Yes No
Credit Cards and EFTPOS
Do employees check that the card is signed?
Do employees check the card expiry date?
Do employees hold the card whilst the sale is being processed?
Do employees check the signature on the card with the signature on the receipt?
Is the refund limit for each EFTPOS terminal set at an appropriate limit?
Is EFTPOS password or PIN changed regularly and kept confidential?
Cash Receipts
Are cash sales controlled by cash registers or pre-numbered cash receipts
books/forms? For example, consecutively numbered admission tickets.
Are the number and regularity of No Sales transactions on cash registers
monitored?
Are there a minimum number of employees operating with an open cash register?
Are the employees adequately supervised?
Are employees adequately trained in reconciliation procedures?
Are large amounts of cash kept on hand kept to a minimum and
frequently cleared?
Is the knowledge of the safe combination limited to only those that require it?
Are safes locked when not in use?
Are safes located out of public view?
Is a log book maintained, recording all transactions to and from safes?
Do employees regularly deposit cash receipts into safes or bank?
Are the nature and extent of cash shortages reviewed?
Are instances of cash discrepancies investigated and recorded?
Are bank deposits regularly checked with cash register totals?
Are takings banked soon after race meetings?
Salaries, Wages and Overtime Payments
Is there adequate review and control of employee timesheets?
Are overtime claims properly authorised?
Are travelling expenses submitted with original receipts attached?
Are overtime claims checked against timesheets?
Are attendance records maintained and available for checking by the club
Secretary/Manager?
Is the payment of employees checked and verified by a second person?
Purchases and Accounts Payable
Are delivery dockets signed by the recipient and adequately stored?
Are quarterly and random audits of petty cash purchases performed?
Is there segregation of duties between purchasing, receipting and paying
functions?
Is there a policy to identify potential conflicts of interest between employees and
suppliers/contractors?
Is there a policy to declare gifts that may have been provided by suppliers as an
inducement to contract their services?
Is there a list of people who are authorised to approve various types of
transactions?
Is expenditure authorised by the club Secretary/Manager in accordance with
approved limits/expenditure guidelines?
Is expenditure supported by appropriate documentation, i.e. original invoice, order
number details, original delivery docket, rather than photocopies or facsimiles?
Are controls in place to ensure that accounts have not been previously paid?
Is there a policy to ensure cheques are not written payable to cash?
Are invoices checked to ensure accurate supply of quantity and quality of goods
ordered?
Are all expenses paid by cheque or electronic transfer?
Petty Cash/Cash
Are all disbursements from petty cash funds supported by receipts?
Is there a predetermined maximum dollar limit on the amounts of individual petty
cash disbursements?
Are petty cash funds on an imprest basis and:
Kept in a safe place?
Controlled by one person?
Periodically counted by someone other than the custodian?
Is there a predetermined list of items that can/cannot be purchased with petty
cash?
Is there adequate security of cash holdings including limited access to the safe or
regular banking?
Stock, Materials and Equipment
Are there regular stock-takes of assets and other stock e.g. liquor and food
items particularly attractive items?
Are there measures in place to prevent viruses, or other wilful damage, being
introduced by a disgruntled employee or competitor?
Are confidential data files and listings held under password protected security?
Are confidential data files backed up and held off-site in a secure location?
If a signature plate is used, does the club Secretary/Manager have sole control?
Are there two cheque signatories?
Are there double passwords for electronic payments made by the club?
Basic Checks
Does the club use budgets and cash projections which are compared to actual
results, and investigate if there are any major discrepancies?
Are the clubs bank statements regularly reconciled with the clubs cash records?
Does the club Secretary/Manager carry out spot checks and reconciliations for
different parts of the clubs operations?