The Audit Commission’s National Fraud Initiative has become firmly established as the United Kingdom’s premier public sector fraud detection process. In the exercise just completed it identified 111 millions pounds fraudulently claimed from 1300 public bodies. This compares to 83 million pounds identified in the last exercise in 2002/03.The Commission uses advanced data matching techniques to tackle a broad range of fraud risks faced by the public sector such as council tenants with a council property in each of two authorities or a public sector employee on long term sickness leave from one organisation while working for another. When matches are detected they are referred to the local council or other public body potentially being defrauded and their investigators then pursue the case. The matching process does not compromise data privacy requirements. The fees charged by the Commission range from 450 to 1,900 pounds and matches now cover 100 per cent of local government expenditure.
Housing benefits was top of the fraud league with 396 successful prosecutions. The data match found that 327 NHS employees and 2,690 local government employees were carrying out housing benefit fraud. The match also found that 5,000 disabled parking badges were being used after the death of the badge holder.
As well as identifying fraudsters the process also reveals new areas of risk as they emerge. This allows participating bodies to review the detected frauds and put controls in place to prevent further abuse. The emphasis in housing investigations switched from tenancy fraud to abuse of the right to buy process with over 80 cases already reported and some councils have started legal proceedings to recover discounts or properties.
Data matching has been piloted in Scotland and the pilots revealed 15 million pounds of overpayments. An expanded range of matches is planned for 2006/07 and a separate national report will be published by Audit Scotland.