White collar crime thrives, but law is closing in on them

THIEVES ripping off Gympie Regional Council will be busted.

The council said at least one fraudster had targeted the council over the past few years.

The revelation follows the release of a damning report that shows most of the state's local governments are embezzlement targets.

A recent Auditor-General survey shows 66 of the state's 77 councils had at least one case of dishonesty between 2009 and 2014.

The report also found 43 councils could be ripped off because they had no way of detecting, preventing or responding to fraud.

A GRC spokeswoman confirmed the council was among the victims.

In the case of alleged fraud involved a former high-ranking employee, the former staffer entered no plea to seven charges when he faced a court earlier this year.

"As with any council, we have a range of internal controls, policies, procedures, delegations and oversight mechanisms aimed at among other things, preventing fraud," the council spokeswoman said.

Forensic accountant Forde Nicolaides said the Auditor-General's report was not surprising.

"The findings ... are generally consistent with observations we have made from forensic work performed for other Australia-wide public sector organisations," the Deloitte Forensic partner said.

"The financial and reputational risks associated with fraud and corruption are particularly high in the public sector given the size of organisations, the sensitivity surrounding public money and the media exposure that the sector receives."

Crime expert Lance Rundle said councils could be easy targets for fraudsters.

"People commit fraud against an organisation because they seek out the most financial gain at another's expense," the CQUniversity business-law lecturer said.

"If they get away with the first instance of fraud the practice may continue as it becomes a learned behaviour of greed.

"However, it should not be hard for any organisation to reduce potential fraud because risk management assessment should identify the potential risks of fraud and identify strategies to be implemented to reduce outcome of fraud."

Local Government Association of Queensland spokesman Craig Johnstone rejected the Auditor-General's criticisms.

"The councils are prepared to handle fraud," he said.

"There's a lot of work gone into encouraging integrity in councils and we think it is working."

The AG's office would not name the councils in its report because of the potential to prejudice ongoing investigations and matters before the courts.


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