What is a detection system?
A detection system (also known as a detection program or approach) detects events that are different from those considered standard, normal or expected. Importantly, it does not have to use technology but can be manual or process driven approach.
Irregularities detected through a detection system help authorities identify where to look more closely, potentially uncovering poor practice, inadequate controls and deliberate and concealed behaviours.
A detection system is most effective where functions and activities vulnerable to integrity risks have been identified either from an integrity risk assessment or in response to an identified integrity breach.
An effective detection system can:
- analyse multiple internal and external data and information sources
- produce information in a format that allows for a quick response or investigation
- be repeated to check for changes and patterns.
A detection system also helps authorities respond to and minimise the impact of an integrity breach quickly, and redesign internal controls.
What can a detection system do?
Common detection activities include post-transactional reviews, analysis of management accounting reports, and data mining and analytics.
Detection systems and activities typically look to uncover:
- false, altered, inadequate or missing documentation
- false authorisations
- undeclared conflicts of interest
- missed process steps
- duplicate information such as account numbers and invoices
- unauthorised access to systems or accounts
- non-existent officers and suppliers.
A detection system can complement an authority’s other approaches to detection such as reporting pathways (including public interest disclosures and complaints management), human resources processes (including exit interviews), and strong internal oversight structures and management supervision.
What benefits does a detection system deliver?
Besides identifying inadequate controls, poor practices and possible integrity breaches, a detection system can:
- help reduce financial and asset loss or reputational damage
- create a shared understanding of risk among key staff
- encourage staff to follow proper process and be accountable
- deter individuals from engaging in misconduct and corruption
- improve visibility of internal controls, with the opportunity to identify and correct gaps before an incident occurs
- inform continuous improvement of internal controls, for example processes and practices
- improve responsiveness by automating previously manual processes
- aggregate data for improved efficiency
- improve predictive analytics to identify potential future errors and irregularities based on past errors and irregularities
- provide greater insight into, and accuracy, of reporting.
Where can a detection system be of benefit?
A detection system can be beneficial when used to proactively identify errors or irregularities in areas that may be vulnerable to integrity risks.
Examples of functions and activities include:
- financial management including procurement and contracts
- asset and facilities management
- information technology and systems
- information management
- human resources management including payroll
- regulation and licencing
- grants and sponsorships.
Integrity risks that can arise in these functions and activities include:
- conflicts of interest
- misuse of public resources
- misuse of position or authority
- inappropriate management or accessing of information.
