What is the real cost of fraud

What is the real cost of fraud?

By Anna Campbell

The sidelines of children’s sports games are a veritable goldmine of gossip and intrigue. I have had many interesting conversations while “watching” my children partake in their various activities. At Friday night hockey last week, I was discussing the research grant process with a University of Otago scientist, as we are both in the depths of writing research applications. A few years ago, I might have moaned about the process but, having spent my whole career in the competitive funding world, I have now learned to see the delight and humour in the wonderful changes of research agendas.

To this end, on the hockey sideline, I was proudly showing off some of my more flowery metaphors created for my latest application. I fully expected my audience of one to bow to my superior creative genius but when he pulled out his own metaphors, my attempts were shown to be meagre and unworthy. So good were his metaphors all I could do was howl in outrage at being so thoroughly out-created. I have since spent the weekend pondering what my research by-line come-back will be. I have not come up with anything worthy, but in my defence I will say that anyone involved in cancer research is able to pull a few more emotional strings than those of us in agricultural research.

Enough of my competitive hockey sideline story. What I am really trying to illustrate in this column is the fine line between process and progress and how too much of the former can upset the latter. Processes, such as grant applications and the significant amount of time spent on reporting on milestones, are a part of my world. I understand that we have to be careful with Government money and that we need to be accountable for what we said we would do and what we actually do. I do however watch in horror as the alleged fraud case unfolds within the Dunedin City Council and I wonder what the real cost of this fraud will be.

The alleged fraud unravelling within the council is awful for all involved. People who set up these frauds are very clever and well integrated in organisations/companies. They really are “just one of us”-albeit gone a bit wrong- and as such, I suspect many of these types of crimes are never detected. The real cost of this fraud is not $1.5 million. The real cost will be the cost of time and resources spent agonising over current systems and developing better systems; time and resources which could have been spent on projects which grow Dunedin. 

The challenge for the DCC is to develop new systems which combat fraud but don’t in the process cripple them as an organisation in terms of decision making and progress. Unfortunately what is happening in more and more organisations is that decision-making bottle-necks develop. A few people are charged with making decisions but large numbers of people have to be consulted along the way and copied into numerous emails before that decision can be made. The pace of everything is slowed down and more jobs are created just to deal with a myriad of emails and systems which are supposed to be designed to make things run smoother. 

In the research grant writing world, we are taught ad infinitum the difference between “outputs” and “outcomes”. I shall use a traffic example to illustrate: when you put in a new set of traffic lights, that is the output, the outcome would be that the traffic moves more smoothly through that intersection. What happens when organisations get so wrapped up in process is that lots of reports are written and processes implemented (lots of outputs) but the focus on outcomes, which is what is really important, is entirely lost- lots of traffic lights but no smooth running traffic.

Alleged fraud as we are seeing unravelling within the council is hard to read about, but the Dunedin public, the media and the council, must not become overly reactionary. Yes justice must be done, new policies must be written, systems will need fine tuning, even simplifying, but please, not at the cost of decision making and progress.    

Accountability is a must, but initiatives which grow our city and create employment and vibrancy are what we are really striving for. Let’s not lose focus on what is important.