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U.K. Fraud Office Gets Mixed Review Following Inspection

Roberta Holland | December 3, 2014

Britain’s anti-fraud agency last week received a mixed report card on fixing “deep-rooted” issues first brought to light in a 2012 review.

Her Majesty’s Crown Prosecution Service Inspectorate (HMCPSI) said the Serious Fraud Office has made some progress in correcting shortcomings, but has a ways to go if it wants to effectively take on complex fraud cases.

“Whilst there is a clear improving trend overall much still needs to be done to achieve the intended results,” the report, released Friday, said.

The report noted that the SFO has faced “very substantial challenges arising out of historical problems which pre-date the arrival of the current director.” It also said some of the recommendations involved elements of culture change within the organization, which don’t lend themselves to a quick fix.

Of the eight recommendations made in 2012, the SFO made “substantial progress” in three categories – a review of the process of how it accepts cases and whether acceptance criteria is still needed to ensure the right cases are accepted; the standardization and streamlining of the casework management processes, including records management, templates, and quality assurance; and designing and documenting a transparent process to decide when to pursue civil recovery and how it will negotiate or agree to consent orders.

In four categories, the inspectorate gave the SFO credit for “limited progress” – the review and update of its intelligence function to ensure it effectively captures, collates, and analyzes intelligence it receives; improvements to its method of assessing the skills, specialism, and staffing level required for individual cases so investigative and prosecutorial teams are properly staffed; improvements to the quality of investigations by boosting staff training in basic investigative techniques and providing more resources at the investigation stage; and the review and update of its disclosure guidance, the design and mandate of updated schedule templates, and the training of all casework staff on those points.

The inspectorate’s eighth recommendation, on finalizing and implementing planned intensive training programs for casework staff, was deemed no longer applicable because the SFO scrapped the previous training plan and replaced it with another strategy.

But the report said it was not surprising the SFO made substantial improvements in only three categories, given the deep-rooted nature of many of the issues. Her Majesty’s Chief Inspector Michael Fuller said he was pleased with the steps the SFO has taken since the initial inspection in 2012, the same year David Green took over the reins of the beleaguered agency.

Fuller-michael-1214“There has been genuine commitment from managers and staff alike to review and update processes and structures and to improve every aspect of case handling, from intelligence gathering and analysis, to casework management and disclosure handling,” Fuller said in the introduction to the report.

Fuller acknowledged the lengthy gap between when the on-site inspection was made a full year ago and the release of the report this past Friday, attributing the delay to the fact that the report marks the first follow-up review of the SFO. He added that he was confident more work was done by the SFO following the inspection. Fuller noted his office now has the added authority to routinely inspect the SFO rather than on an invitation-only basis.

“To the credit of the SFO managers, there has been no attempt to ‘plaster over the cracks,’” Fuller said. “Remedial action has been well planned, but an unfortunate consequence of this approach is that the work takes time to have a clear, demonstrable, impact on outcomes.”

Fuller said it is too soon after the previous inspection to expect the SFO to fully deliver on all the improvements, but the agency is moving in the right direction. “When the improvement in business processes begins to feed through demonstrably into outcomes, I would expect the organization to become proficient in investigating and prosecuting the most serious and complex fraud and corruption cases,” Fuller said.

The report acknowledged some of the high-profile miscues suffered by the SFO in recent months, which included the implosion of its highly publicized case against Victor Dahdaleh at trial and a £4.5M settlement to the Tchenguiz brothers for mishandling their investigation. The report also noted that many “legacy” issues that have hampered the SFO are abating, and the inspectorate will expect to see “clear and sustained business impact” from further improvements by 2015.

Green-david-0914In an article in Reuters this week, Green was quoted as saying he was pleased the inspectorate recognized the steps the agency has taken. “The SFO is in a very different and better place than it was in 2012,” Green said, according to Reuters.