New Zealand Law Society - Serious Fraud Office PIF review reveals challenges

Serious Fraud Office PIF review reveals challenges

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The Serious Fraud Office's lack of a policy function, its single-purpose focus on serious fraud and its small size means it is often overlooked or is not well-equipped to participate in strategic discussions or work programmes in the justice sector.

This is one of the findings of the Performance Improvement Framework Review for the Serious Fraud Office Te Tari Hara Tāware, released in March 2020. PIF reviews are led by independent reviewers, to give a fresh perspective on a state sector organisation and the performance challenges it faces.

The report says the SFO currently operates very much at the fringe of the New Zealand public and private sectors.

"It is a small Auckland-based, operational agency with single purpose, all-encompassing legislation, largely facing the private sector. The SFO is not well connected into the wider public sector and has only limited private sector touchpoints."

The review says despite the efforts of the Director and other Senior Leadership Team members, the SFO is hampered by the lack of a ‘Wellington mode’ to its operations. This situation, coupled with the lack of any mutual interdependencies with other core public sector agencies, means it is easy for the SFO to be forgotten or overlooked.

"Its recent work leading the AntiCorruption Working Group has raised the SFO’s profile in Wellington to a certain extent, however the limited, finite funding attached to the programme has undermined engagement by other agencies and reduced the quantum of work able to be progressed," the report says.

System challenges

The reviewers say if the SFO is to play a greater role in serious fraud and anti-corruption in New Zealand, it needs to overcome three system challenges:

(1) "Coming in from outer space": The SFO needs to establish strong and embedded relationships with other public sector justice agencies. It needs to be a regular and skilled contributor to wider justice sector issues, able to participate in both policy and operational discussions relating to combatting financial crime and corruption.

(2) Securing support for a wider leadership role: The reviewers have a pessimistic view of New Zealand's overall ability to retain its reputation as a high trust, corruption-free society. "Our apparent complacency and ambivalence towards the risk of corruption and fraud in both the public and private sectors not only creates increased financial risk to individual businesses but also risk to our international reputation and economy." The task of establishing effective anti-corruption practices is very big, and the reviewers say it is essential that there is wider support for the SFO as the operational lead and to ensure it is adequately resourced to raise the level of activity and drive the work programme.

(3) "Define the SFO ecosystem": "The SFO faces and delivers services for the public sector and the private sector. It relies on and engages with multiple professional parties across the financial, legal and risk management sectors. However, it does so on a relatively ad hoc or transactional basis and with little wider impact." The reviewers say the SFO's challenge is to move beyond its current relatively ‘distanced’ approach and define the ecosystem that can assist it to have a wider impact in prevention and detection of serious fraud and corruption.