GovS 013: Counter-Fraud Compliance as a Core Governance Priority

Fraud against the public sector is not merely a financial-control issue. It affects the delivery of essential services, reduces the resources available to citizens, damages trust in public institutions and can expose boards, accounting officers and senior leaders to significant scrutiny.

Government Functional Standard GovS 013: Counter Fraud establishes the expectations for managing fraud, bribery and corruption risk in government organisations. It applies directly to government departments and their arm’s-length bodies, whilst other public-sector organisations, including local and devolved bodies, may use it as a model of good practice.

Counter fraud should no longer operate as a predominantly reactive investigation function. It must become an integrated system of governance, risk management, prevention, detection, response and assurance.

What does GovS 013 require?

GovS 013 sets minimum expectations across the full counter-fraud lifecycle. Its underlying principles require organisations to define clear responsibilities, maintain appropriate skills and awareness, establish controls, respond to changing threats and align counter-fraud activity with recognised professional standards and public-service ethics.

The Standard expects organisations to address areas including:

governance and management
board and executive accountability
counter-fraud strategy and annual action planning
fraud, bribery and corruption risk assessment
policies, reporting routes and response plans
loss measurement and reporting
proactive detection and access to trained investigators
awareness, training, gifts and hospitality arrangements
assurance over the effectiveness of the organisation’s response

These are not intended to exist as isolated documents. The Standard expressly states that the governance of fraud, bribery and corruption risk should form an integrated part of the organisation’s wider governance arrangements. A public body may have an anti-fraud policy, whistleblowing procedure and investigation protocol, yet still lack an effective counter-fraud operating model. Compliance depends on whether the arrangements work collectively, are informed by risk and can be evidenced.

Board-level accountability and governance meeting

Accountability starts at the top

GovS 013 places clear responsibility on senior leadership. The accounting officer retains ultimate responsibility for the management of fraud, bribery and corruption risk. Organisations must also have an accountable individual at board level who supports the accounting officer and provides effective leadership over the organisation’s counter-fraud arrangements.

This accountable board member should ensure that:

gaps against the Standard are identified and reported
the board understands the principal fraud, bribery and corruption risks
sufficient resources and capability are available
performance is scrutinised and responsibilities clearly allocated
counter-fraud considerations influence organisational decisions

A senior counter-fraud lead should then be responsible for the day-to-day management of the function and accountable to the designated board member, creating a direct line from operational counter-fraud activity to executive and board oversight.

In practice, boards should be able to answer:

What are the most significant fraud risks facing the organisation?
Which services, programmes, payments and supply chains are most exposed?
How effective are the controls intended to manage those risks?
What losses have occurred, including detected and estimated losses?
What intelligence and analytics are being used to identify hidden fraud?
Are remediation actions being delivered?

Where the answers are unclear, fragmented or based largely on assurances that policies exist, the organisation may not be able to demonstrate effective compliance.

From minimum standard to continuous improvement

GovS 013 should not be treated as a one-time compliance exercise. The Public Sector Fraud Authority has developed a Continuous Improvement Assessment Framework to assess organisational maturity against the Standard. Its assurance model examines performance across 12 areas and uses the ratings “In development”, “Good”, “Better” and “Best”. To achieve minimum compliance, an organisation must meet the relevant criteria across the “Good” category.

1 of 15

organisations achieved minimum “Good” rating across all 12 sections in 2023–24 assurance

areas assessed under the Continuous Improvement Assessment Framework

2–5 yrs

recommended horizon for a GovS 013-aligned counter-fraud strategy

Of the 15 organisations reviewed in the 2023–24 assurance programme, only one achieved a minimum rating of “Good” across all 12 sections. Fraud-risk assessment, the use of internal fraud and error data, proactive measurement and access to appropriately qualified counter-bribery and corruption investigators were among the areas identified for further development.

These findings suggest that many organisations have established elements of a counter-fraud framework but have not yet connected them into a mature, evidence-led system. The challenge is rarely the absence of activity: it is more often the absence of consistency, prioritisation, ownership and measurable assurance.

Fraud-risk assessment must drive the strategy

An effective fraud-risk assessment is the foundation of GovS 013 compliance. The organisation should understand how fraud, bribery and corruption could occur across its objectives, services, programmes and operating model. The assessment should be based on credible threat information and should identify both inherent and residual risk.

Relevant areas may include:

procurement and contract management
grants, subsidies, payroll and recruitment
social benefits and public payments
licensing, regulatory services and revenue collection
conflicts of interest and insider threats
cyber-enabled fraud and data misuse
third-party and supply-chain fraud
emergency expenditure and major transformation programmes

The assessment should not simply list recognised fraud types. It should identify where each risk could arise, who might perpetrate it, what controls exist, how those controls are tested and who owns the residual exposure. GovS 013 requires the organisation’s strategy to be informed by its risk assessment and updated as the internal and external environment changes.

Prevention should begin before money is committed

Public bodies have traditionally placed significant emphasis on investigating fraud after it has occurred. Investigation remains essential, but the greatest value is often achieved when fraud is prevented before a payment, contract or benefit is approved. This means integrating fraud expertise into policy development, business-case approval, new programme design, procurement exercises, contract mobilisation, digital transformation and emergency response planning.

Counter-fraud specialists should be involved early enough to influence design rather than being asked to respond after losses have occurred. Preventive controls may include identity and eligibility verification, segregation of duties, declarations of interest, payment validation, supplier due diligence, contract transparency, data matching and enhanced scrutiny of high-risk transactions.

Data analytics and proactive fraud detection

Detection must be proactive

GovS 013 expects organisations to undertake proactive detection activity, deliberately looking for indicators of fraud, bribery and corruption using intelligence, data and targeted review, rather than relying solely on whistleblowing reports, management referrals or audit findings.

Examples include:

duplicate-payment testing and supplier/employee address matching
analysis of unusual changes to bank details
conflicts-of-interest analysis and high-risk procurement pattern reviews
network analysis of suppliers, directors and employees
trend analysis across claims or applications
comparison of organisational data with external datasets

The Government Counter Fraud Functional Strategy identifies data analytics as fundamental to the stewardship of public money, ranging from basic duplicate-payment checks to the use of artificial intelligence to identify more sophisticated patterns. Public bodies should be able to demonstrate not only that they receive allegations, but that they actively seek out hidden fraud and use the results to improve controls.

Capability and professional standards matter

The credibility of a counter-fraud framework depends on the people delivering it. Organisations need access to appropriately skilled personnel across fraud-risk assessment, prevention, intelligence, data analytics, investigation, bribery and corruption, sanctions and redress, loss measurement, learning and development, and quality assurance.

Using untrained staff to conduct sensitive investigations or complex risk assessments can create additional legal, evidential, employment and reputational risks. Professional capability should therefore form part of workforce planning: organisations should understand what skills are required, what capability is available internally and where specialist external support is necessary.

The relationship with suppliers and delivery partners

Public bodies frequently deliver services through complex networks of contractors, grant recipients, arm’s-length bodies, delivery partners and subcontractors. GovS 013 cannot be implemented effectively without considering this wider ecosystem. Contracts and partnership arrangements should establish clear expectations covering fraud-risk management, reporting, access to information, audit rights, investigation cooperation, conflicts of interest, data sharing and remediation.

A public body should not assume that transferring service delivery also transfers accountability for protecting public money.

What should public bodies do now?

Organisations should conduct an honest assessment of their current maturity against GovS 013. Priority actions should include:

1Confirming the accountable board member and senior counter-fraud lead
2Completing or refreshing an enterprise fraud, bribery and corruption risk assessment
3Aligning the counter-fraud strategy to the organisation’s principal risks
4Producing a prioritised annual action plan
5Establishing consistent reporting to the board and audit committee
6Assessing the quality and coverage of proactive detection activity
7Reviewing investigation capability and professional standards
8Strengthening arrangements with suppliers and delivery partners
9Measuring losses, prevented losses and control improvements
10Independently testing whether the framework operates effectively

The objective should not be to produce more documentation. It should be to build a coherent and defensible operating model.

Verix Advisory team working with public sector clients

How Verix Advisory can help

Verix Advisory supports public bodies to understand, implement and demonstrate compliance with GovS 013. Our services span the full counter-fraud lifecycle:

GovS 013 maturity and gap assessments

We assess current arrangements against each area of the Standard and identify where the organisation is operating at an “In development”, “Good”, “Better” or “Best” level. The output provides a clear, prioritised improvement roadmap.

Enterprise fraud-risk assessments

We identify the organisation’s material fraud, bribery and corruption risks and connect them to services, programmes, data, controls and accountable owners.

Counter-fraud strategies and action plans

We develop practical multi-year strategies and annual delivery plans aligned to the organisation’s operating environment, risk exposure and strategic priorities.

Governance and operating-model design

We help define board accountability, functional leadership, reporting lines, decision rights, escalation routes and assurance arrangements.

Control testing and proactive detection

We assess whether controls are designed appropriately, test whether they operate effectively and develop targeted detection activity using data and intelligence.

Investigation and professional capability reviews

We evaluate investigation governance, case standards, quality assurance, skills, capacity and access to trained specialists.

Board and executive training

We deliver tailored briefings for accounting officers, boards, audit committees, senior managers and operational leaders.

Independent assurance

We provide objective assurance over whether the organisation’s framework is embedded, proportionate and capable of withstanding regulatory, audit and public scrutiny.

From compliance to confidence

GovS 013 is more than a technical standard for counter-fraud specialists. It is a framework for protecting public money, strengthening organisational integrity and demonstrating that public bodies understand and manage the risks associated with fraud, bribery and corruption.

Public bodies that treat the Standard as a governance priority can improve prevention, identify losses earlier, strengthen accountability and build greater confidence among citizens, employees, suppliers and oversight bodies. Those that rely on fragmented policies, reactive investigations or unsupported assurances may struggle to demonstrate that their arrangements are effective.

Verix Advisory helps public bodies move beyond formal compliance and build counter-fraud frameworks that are risk-led, operationally effective and independently assured.

This article provides general information and does not constitute legal advice.

GovS 013: Why Counter-Fraud Compliance Must Become a Core Governance Priority for Public Bodies