Government Announce a new failure to prevent fraud offence…

Calling all Contractors and House Builders working in the Construction Industry – Have you got the necessary governance reports in place to deal with the Governement’s new “failure to prevent fraud offence” to hold organisations to account if they profit from fraud committed by their employees. More information can be found here in this Government Factsheet:


The fact sheet outlines what, and for whom, the new law affects. Whilst there are some existing powers to fine and prosecute organisations and their employees for fraud, the new offence will strengthen these, closing loopholes that have allowed organisations to avoid prosecution in the past.

What does this mean? The offence applies to all sectors. However, to ensure burdens on business are proportionate, only large organisations are in scope – defined (using the standard Companies Act 2006 definition) as organisations meeting two out of three of the following criteria: more than 250 employees, more than £36 million turnover and more than £18 million in total assets. Organisations will be able to avoid prosecution if they have reasonable procedures in place to prevent fraud.

What might constitute “reasonable procedures?” The government will publish guidance providing organisations with more information about reasonable procedures before the new offence comes into force. An aspect of these procudures will most likley include reporting to provide proof that they have good process and data governance procedures in place.

So the question is do you have the necessary automated reporting processes in place to demonstrate that your core business processes are indeed “reasonable”?

SPS have developed similar reports for clients where they come under the American SOX Compliance (Sarbanes-Oxley Act) whereby auditing based reports are used to demonstrate SOX Compliance in core business processes eg: Procure to Pay – Order to Invoice to Payment processes.

Contact us here at SPS if you want to find out more about buinsess process compliance reporting and see how we can help you to demonstrate your procedures are “reasonable”.


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