Report serious fraud and corruption

Reputational impacts

Fraud can affect any public sector organisation and how it is managed makes a significant difference. Public sector organisations that take a proactive approach to managing their fraud risks may be less vulnerable to reputational harm. Agencies can use their response to build confidence with other public sector organisations, industries, customers, the public and politicians. If fraud is perceived to have been ignored, mismanaged or been preventable, it can lead to reputational harm that affects not just the organisation involved, but also trust and confidence in the wider public sector.

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What impacts can look like

Erosion of trust in government

Significant fraud against a public sector organisation can undermine public confidence in government institutions and the integrity of the public sector. People may not trust the Government with their personal information, or may lack confidence in the Government’s ability to deliver programmes or policies, and may even view Government as a soft target for further exploitation.

Erosion of trust in industry

Fraud can result in not only loss to the Government but can have further impacts on industry. Legitimate businesses can be tarnished by association in an industry where fraud has occurred against a government programme. 

Erosion of trust in information security

Where fraud leads to data breaches or misuse of personal information, it can lead to reduced trust, and a reluctance by the public to provide the Government with personal information.

Decrease in employee morale and performance

Knowledge of fraud occurring against or within the public sector can reduce employee morale and performance. This decreases productivity and can compromise organisational culture. It can also lead to a culture of non-compliance where some level of fraud is perceived as acceptable.

Damage to international reputation

Fraud and corruption can affect how New Zealand is perceived globally. Widespread fraud may influence decisions about international trade, investment and cooperation, especially if fraud is seen as being systemic or poorly managed. 

Key questions to consider

Understanding the broader reputational impacts of fraud means asking the right questions.

  • If your programme was defrauded, what could be the reputational impacts?
  • Could fraud result in a loss of reputation or erosion of trust in your programme and organisation? 
  • Could fraud against your programme lead to an erosion of trust in the Government as a whole?
  • What would be the effect of an erosion of trust?
  • Could there be reputational impacts to industry or your international reputation?
  • What would be the impact on employee morale and productivity? 

Other impacts

Download the full guide

Explore the full resource to identify the impacts of fraud, read about real-world examples, and consider key questions to help assess and prepare for potential risks to your programme or operations. Not every impact will apply to every organisation or initiative, but being aware of them can help your organisation strengthen its fraud prevention efforts and protect those who rely on its services.

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