EU Anti-Fraud Strategy: OLAF Strengths and Weaknesses

Introduction

For some time, fraud and corruption in public service have been significant concerns. This has compelled many organizations to establish strategies aimed at detecting and minimizing the occurrence of fraudulent activities within their jurisdictions. This paper discusses the strategic management concepts embedded in the risk-based policing strategy, along with the principles and importance of enhancing organizational performance. Complementary factors and organizational culture are components that both facilitate and work against strategic fraud and corruption. The paper identifies alternative and successful strategies dependent on the willingness of groups and individuals to accept change — a willingness that is itself conditioned by those seeking reform and by an understanding of the organization's culture. The following study identifies the strengths and weaknesses of the European Anti-Fraud Office (OLAF) as a strategy used by the European Union in countering fraudulent activities among its member states.

For purposes of balancing risk probability against anticipated losses and the measures taken in response, the strategy calculates the levels of economic benefit linked to interventions and weighs them against the costs of those interventions. The concept also controls risk through directed intervention and consideration of inappropriate, displaced, and transferred risks. Composite elements include transfer to alternate public and private organizations and to the public through insurance companies, among others (Morgan & Boardman, 2012). The integral work of the working party includes identifying a broad scope of cost-effective controls, informing best-practice guides, and promoting anti-fraud cultures by making recommendations that represent significant deterrent effects.

Preventative Measures and Internal Controls

One of the strengths of OLAF is that it allows for preventative measures. Prevention is one of the most critical elements of the anti-fraud strategy used by the EU. Corruption and fraud are categorized as difficult undertakings with an extensive likelihood of detection, and there is therefore a reduced scope for their occurrence. Achieving this requires the exercise of effective controls within systems. The EU constitution outlines Contract and Financial Procedures and Rules through Delegation of Powers to provide a framework for extensive controls (Brooks, Aleem & Button, 2013). The enhancement of individual departmental and corporate instructions is an extension of procedure guides that emphasize the controls required and the relevance of separating information and duties in security measures.

The policy instils thorough monitoring systems. The major responsibility for ensuring sustainable sound systems includes the involvement of departmental managers, who call on the assistance of departmental finance officers. Internal audits provide opinions on systems considered to carry higher potential risks. External audits have the responsibility of reviewing the adequacy of arrangements realized through audited bodies, and in doing so help prevent corruption and fraud.

Codes of Conduct and Employee Obligations

OLAF insists on adherence to codes of professional obligations and conduct. Employees as well as members are subject to codes of conduct along with various elements of professional obligation. Failure to abide by these codes leads to disciplinary action. The strategy manages gifts and tokens that are legitimately accepted and issued to departments from the Head of Human Resources and other senior members such as the Chief Executive (Sousa, Hindess & Larmour, 2012). Subordinates are given guidance on approaches to be taken when considering items such as gifts and the maintenance of departmental registers. Chief Executives are expected to keep registers of the personal interests declared by elected members. This applies to all EU member countries.

Employees should inform their manager in writing of any relevant personal interests. The manager then notifies the relevant chief officers for formal registration. When an interest relates to contracting, there is a need to declare to the manager all personal interests — whether of the employee, their family, or their friends — regarding potential contractors that may conflict with organizational interests. This component includes valuing, in contracting for a partner, those other organizations of which the firm is a member (Morgan & Boardman, 2012).

Members should also take into consideration the views of others, such as political groups, while seeking to reach individual conclusions on issues before acting. Members are expected to promote equality by avoiding unlawful discrimination against all persons and by treating people with respect regardless of race, disability, age, sexual orientation, religion, or gender. Individuals are expected to demonstrate respect for the integrity and impartiality of statutory officers and other employees throughout their conduct.

Conclusion

Preventative measures against corruption and fraud are realized at recruitment stages while seeking to establish and develop previous records for potential employees based on their integrity and propriety. Staff recruitment should be conducted according to a code of practice that insists on fair recruitment and selection. This requires written references obtained through questionnaires. Supporting letters should call on references to provide frank and full disclosure on all relevant matters. The recruitment of posts that involve working with vulnerable adults or children, as well as those in areas deemed appropriate for such procedures, should include screening assessments and criminal record checks (Kovacich, 2007). Taken together, these measures reinforce the anti-fraud culture that OLAF seeks to promote across EU institutions and member states.