Audit Scotland has reported a substantial increase in the value of fraud and payment errors detected through a biennial data matching exercise under the country’s National Fraud Initiative (NFI).
It has published a report on the NFI, stating that fraud and error matches worth an estimated £21.5 million were identified in 2022-23, up from £14.9 million in 2020-21.
But it added that it is not clear whether the underlying levels of fraud have increased.
Key messages of the report are that the NFI is vitally important to public sector financial management and that for most participating organisations the governance and follow-up arrangements have been sound. But fewer public bodies were found to have fully satisfactory arrangements for participating in the NFI and some could improve how they follow up data matches.
Its recommendations include that organisations should ensure an appropriate level of resources is available to deliver the follow-up activities, and they should use the NFI self-appraisal checklist in their planning for the 2024-25 exercise. They should also put in place arrangements for monitoring follow-up activity, and where it is necessary seek to understand reasons for low or nil outcomes.
Vitally important
John Cornett, executive director of audit services, said: “The detection and prevention of fraud using the National Fraud Initiative remains vitally important to financial management across the public sector.
“To make the most of the NFI, public bodies need to ensure they have appropriate levels of resources in place to effectively follow up on matches.”
The main data march areas for the most recent exercise were payroll, creditor payments, council tax, pensions, housing benefit, housing tenancy and waiting lists, blue badges and adult concessionary bus travel.
