DAOD 7025-0, Fraud Prevention and Management

Table of Contents

1. Introduction
2. Definition
3. Policy Direction
4. Consequences
5. Authorities
6. References

1. Introduction

Date of Issue: 2008-08-15

Date of Last Modification: 2025-11-26

Date of Last Review: 2025-11-26

Application: This DAOD is a directive that applies to employees of the Department of National Defence (DND employees) and an order that applies to officers and non-commissioned members of the Canadian Armed Forces (CAF members).

Approval Authority: Assistant Deputy Minister (Review Services) (ADM(RS))

Enquiries: Executive Director of Integrity and Inquiries (EDII)

2. Definition

fraud (fraude)

An intentional act by one or more individuals among employees, management, those charged with governance (internal) or third parties (external) involving the use of deception to obtain an unjust or illegal advantage. The three primary categories of internal fraud are corruption, asset misappropriation and financial statement fraud. (Fraud Risk Management Framework at the Office of the Auditor General of Canada, Office of the Auditor General of Canada)

3. Policy Direction

Context

3.1 Fraud risks affect all organizations and can lead to the loss of public money, lower employee morale and reduced public confidence. While the Deputy Minister (DM) is responsible under the Financial Administration Act to address the exposure to fraud, the DND and the CAF have a legal responsibility to manage DND programs and CAF activities in a manner consistent with public expectations for resource management.

3.2 The Canadian Forces Provost Marshal (CFPM) is responsible for criminal investigations with respect to fraud in the DND and the CAF. Other federal, provincial or municipal police forces may also be involved as appropriate.

Policy Statement

3.3 The DND and the CAF must take the following steps in suspected cases of fraud:

1. diligently pursue suspected fraud at all levels;
2. report suspected fraud to authorities; and
3. adopt and periodically review measures to prevent, detect and respond to suspected fraud.

Requirements

3.4 The DND and the CAF must develop and maintain:

1. a comprehensive fraud risk management programme (FRMP) with:
   1. fraud risk governance;
   2. processes and procedures for periodic fraud risk assessments that detect fraud risks, identify anti-fraud controls and mitigate residual fraud risks;
   3. the design and operation of combined preventive and detective fraud controls that are commensurate with fraud risks;
   4. protocols for the reporting and investigation of fraud allegations;
   5. monitoring and evaluation of the effectiveness of the FRMP and the ability to make continuous improvements as necessary; and
   6. the communication of fraud risk management activities through appropriate communication products, such as internal newsletters and bulletins, training and other ongoing fraud awareness sessions;
2. orders and directives outlining the responsibilities of DND employees and CAF members who:
   1. suspect or witness fraud; or
   2. receive reports from subordinates or others concerning fraud;
3. a mechanism for DND employees and CAF members to report suspected fraud without fear of reprisal or harassment (see DAOD 7024-0, Disclosure of Wrongdoings in the Workplace and the Public Servants Disclosure Protection Act (for DND employees) or the Canadian Armed Forces Disclosure Process (for CAF members));
4. an effective and coordinated criminal investigation regime with respect to fraud; and
5. a special examinations and inquiries capability to conduct independent administrative reviews of suspected fraud (see DAOD 7026-1, Management of Administrative Investigations).

4. Consequences

General

4.1 Should clarification of the policy statement, requirements or authorities set out in this DAOD be required, DND employees and CAF members may seek direction through their channel of communication or chain of command, as appropriate. The anticipated results set out in the policy statement may not be achieved by the DND and the CAF if the requirements specified in this DAOD are not properly implemented. Not achieving the anticipated results could affect the ability of the DND and the CAF to ensure that the CAF is prepared to undertake missions for the protection of Canada and Canadians and the maintenance of international peace and stability.

5. Authorities

Authority Table

5.1 The following table identifies the authorities associated with this DAOD:

6. References

Acts, Regulations, Central Agency Policies and Policy DAOD

• Criminal Code
• Federal Accountability Act
• Financial Administration Act
• National Defence Act
• Public Servants Disclosure Protection Act
• QR&O article 4.02, General Responsibilities of Officers
• QR&O article 5.01, General Responsibilities of Non-commissioned Member
• Directive on Public Money and Receivables, Treasury Board
• Policy on Financial Management, Treasury Board
• Policy on Internal Audit, Treasury Board
• Guide on Managing Fraud Risks at the Office of the Auditor General of Canada, Office of the Auditor General Canada
• DAOD 1000-10, Policy Framework for Corporate Administration Management

Other References

• DAOD 7021-0, Conflict of Interest and Post-Employment
• DAOD 7024-0, Disclosure of Wrongdoings in the Workplace
• DAOD 7026-1, Management of Administrative Investigations
• Internal Disclosures of Wrongdoing (Whistleblowing) and Reprisal, ADM(RS), intranet site
• Canadian Armed Forces (CAF) Disclosure Process, 2013-04-08