| Status |
Optional (see Notes section below) |
|---|---|
| Source |
https://www.counterfraud.gov.au/library/framework-2024 Commonwealth Fraud Prevention Centre www.counterfraud.gov.au/ |
| Legislation / Policy | |
| Additional information |
A clause of this type would be included to manage potential fraud and corruption risks associated with performance of the Contract. It should only be used where the cost of the Fraud and Corruption Control Plan is commensurate with the scope and scale of the procurement or to manage an identified risk.
Generally, where this clause is used, inclusion of complementary clauses detailing a range of related requirements may be required.
Related clauses may include:
- making good any Customer losses;
- consent for access to personal information to enable investigations; and
- a framework to establish appropriate investigation procedures into suspected incidents (i.e. the Supplier the Customer or independent party).
This basic Fraud and Corruption Control Plan clause will allow the Customer to require a Fraud and Corruption Control Plan to be developed by the Supplier.
Where a risk assessment has identified that the Contract is high risk - where fraud and corruption is likely and the value is significant, the Option 2 clause should be used.
If the Commonwealth Fraud and Corruption Control Framework 2024 cannot be made available to the Supplier, the Option 2 wording should also be used.
For high risk or high value contracts where a Fraud and Corruption Control Plan clause is required, this clause provides more detail and certainty around what needs to be included in the Fraud and Corruption Control Plan and how the process will be managed throughout the term of the Contract.
Fraud and Corruption Control Plan
- Within one month of the Contract Start Date, the Supplier must prepare a Fraud and Corruption Control Plan that is consistent with the Commonwealth Fraud and Corruption Control Framework 2024 and provide a copy of the Fraud and Corruption Control Plan to the Customer.
- The Supplier must review and update the Fraud and Corruption Control Plan at least every six months over the term of the Contract, or whenever there is a significant change in the structure or activities of the Supplier or in the event a fraud or corruption incident occurs. The Supplier must provide the Customer with details of any review and a copy of any update to the Fraud and Corruption Control Plan.
Fraud and Corruption Control Plan
- Within one month of the Contract Start Date, the Supplier must prepare a Fraud and Corruption Control Plan that is consistent with the Commonwealth Fraud and Corruption Control Framework 2024 and otherwise meets the requirements of this clause.
- The Fraud and Corruption Control Plan must:
- cover the entire Contract, including any part of the Contract being performed by any subcontractor or other person or under any other arrangement established by the Supplier relating to the Contract; and
- contain appropriate fraud and corruption prevention, detection, investigation, reporting and audit processes and procedures.
- At a minimum the Fraud and Corruption Control Plan must:
- include a summary of fraud and corruption risks and vulnerabilities associated with the Contract;
- propose treatment strategies and controls to manage each identified fraud and corruption risk and vulnerability;
- provide information about how the Fraud and Corruption Control Plan has been, or will be, implemented within the Supplier, its subcontractors and its supply chain;
- propose strategies to ensure the Supplier meets its obligations set out in the Fraud and Corruption Control Plan;
- include mechanisms and timeframes for collecting, analysing and reporting fraud and corruption incidents to the Customer;
- provide details of how the Supplier will ensure the Fraud and Corruption Control Plan is working and remains in place for the duration of the Contract;
- include protocols for detecting and handling fraud and corruption incidents;
- include mechanisms on how the Supplier will ensure that its officers, employees, agents and/or subcontractors are made aware of what constitutes fraud and corruption, fraud and corruption risks and arrangements for handling fraud and corruption incidents relating to the Contract; and outline key roles and responsibilities for fraud and corruption control within the Supplier’s organisation.
- The Supplier must review and update the Fraud and Corruption Control Plan at least every six months over the term of the Contract, or whenever there is a significant change in the structure or activities of the Supplier; or in the event a fraud or corruption incident occurs. The Supplier must provide the Customer with details of any review and a copy of any update to the Fraud and Corruption Control Plan.
While use of this clause is optional, it may be appropriate for some contracts to include a clause of this type, where the cost of the Fraud and Corruption Control Plan is commensurate with the scope and scale of the procurement.
Under section 10 of the Public Governance, Performance and Accountability Rule 2014, accountable authorities are required to take all reasonable measures to prevent, detect and respond to fraud and corruption relating to their entity. The Commonwealth Fraud and Corruption Policy further specifies that obligations of accountable authorities for managing fraud and corruption extend to the conduct of third parties related to the entity. These third parties include individuals (such as contractors and subcontractors) businesses and other third party organisations (such as a service provider) who deliver a program, support, goods or services for, or on behalf of an entity.
Contractors and the staff of contracted service providers (including subcontractors) are also regarded as staff of an entity under the National Anti-Corruption Commission Act 2022. This means that the National Anti-Corruption Commission’s (NACC’s) jurisdiction extends to investigating potential serious or systemic corrupt conduct of service providers, and agency heads are under an obligation to refer such conduct to the NACC. More information can be found on the NACC’s website.
Standardisation of contractual text results in efficiencies for both Parties to a Contract. Before deciding whether a particular clause is appropriate, procurement officials should carefully consider the context of their procurement. Capitalised terms (unless otherwise defined) are based on the definitions in the CCS Glossary. Definitions of any relevant defined terms may need to be added.
Changes to wording of this clause may be appropriate for certain types of procurements. This may include further clauses highlighting requirements on dealing with a particular fraud and corruption risk (e.g. identity fraud), or providing a right for the Customer to require amendments to the Supplier’s draft Fraud and Corruption Control Plan before it is finalised.
There may also be procurements where it is not appropriate for the Customer to commit to particular methods of reporting – for example, where the Contract involves sensitive international, commercial or security considerations and/or where the Customer needs to have the ability to take certain actions quickly in its absolute discretion.
Otherwise, where this clause is included, the clause wording should be used without change.
Terms that are capitalised may need to be changed to align with the Contract terminology.
