Audit Scotland – The National Fraud Initiative
By Russell A J Frith, Director of Audit Strategy, Audit Scotland
Audit Scotland helps the Auditor General and the Accounts Commission to make sure organisations that spend public money in Scotland use it properly, efficiently and effectively.
This is done by carrying out financial and performance audits – that is, detailed and systematic reviews – of various aspects of how public bodies work.
Every two years, a large-scale counter fraud exercise is undertaken in Scotland known as the National Fraud Initiative (NFI). It is performed by Audit Scotland assisted by the Audit Commission, our sister organisation in England. The NFI uses computerised techniques to compare information about individuals held by different public bodies and on different financial systems. The results help to identify circumstances (matches) that might suggest the existence of fraud or error.
The NFI helps public bodies to investigate these matches and, if fraud or error has taken place, to stop payments and attempt to recover the amounts involved. The NFI also helps appointed local auditors to assess the arrangements that the bodies have put in place to prevent and detect fraud, including how they approach the NFI exercise itself.
During the last Scottish NFI exercise which took place in 2006-2007, £13 million worth of fraud and errors were identified in public sector bodies. Examples of fraud or error detected in the national health service included employees linked with several payroll and disclosure irregularities; an employee who was claiming sick leave but found to be in employment at another public body; an employee of a nurse bank (i.e. a group of flexible nurses, contracted to work on an as-and-when-required basis) who had been dismissed from a previous nursing post but had not disclosed that dismissal when applying to join the nursing bank. Health employees were also linked with more than 110 cases of Housing Benefit overpayment or fraud.
For the future it is expected that the 2008-2009 NFI exercise which is currently underway will uncover further fraud and errors in the public sector. The Scottish Government Criminal Justice Directorate has provided for new explicit legal powers for data matching in Scotland in a Bill published in March 2009. If passed by the Scottish Parliament, these powers will further enhance the NFI by allowing Audit Scotland to match data with data from public bodies in other countries in the United Kingdom (England, Wales and Northern Ireland).
