Two key areas of success were detection and recovery of housing benefits overpayments, and payments of pensions to deceased persons. In relation to housing benefits, authorities identified savings of £1.038 million - an increase of 45% from the previous NFI exercise.

Pension data matching showed overpayments were down from £135,000 in the previous year to £98,000. Reported cases of pensions paid after death showed a significant reduction since the previous NFI report. Only 21 cases were reported - a reduction of 40 cases from the previous exercise.

The report stresses that while the 2004/2005 NFI exercise produced some very successful results a small number of authorities are not reporting savings at present. As a result of the 2004/2005 NFI exercise three authorities identified savings of more than £0.25million and one authority reported savings of over £0.5million.

The Wales Audit Office and the Audit Commission have created new data matching modules to extend the next NFI exercise and help the  public sector in Wales target fraud and overpayment. The modules were tested in pilot sites around the UK for 2004/2005 and will be available in Wales for 2006/2007.  They cover:

• parking and transport,
• Insurance claims,
• payments to private residential care homes and continuing care,
• creditor payments, and
• market trader and taxi driver licences.

More organisations will be participating in NFI 2006/2007, which will mean extra data to help identify fraud and overpayment.

The Auditor General, Jeremy Colman said today:

Fraud is a serious problem, not only does it reduce the help available to those who need it most it undermines confidence in public services. The National Fraud Initiative helps to reduce overpayments and allow public money to provide support where it is genuinely needed. Organisations taking part also benefit from stronger arrangements to combat fraud and corruption. In the future, I hope that all eligible public sector bodies will become NFI participants.

Notes to Editor

• The Audit Commission originally developed the National Fraud Initiative (NFI). It looks at matching data across public sector bodies and between different systems to identify potentially fraudulent and erroneous payments.

• The NFI exercise began in 1996 and is now run biennially. To date it has been used to identify fraud and error totalling over £300 million for the UK; £7.5 million in relation to Wales.

• The Auditor General for Wales (AGW) assumed responsibility for the National Fraud Initiative in Wales in 2005.

• Over 1,300 organisation in the UK participated in the latest NFI exercise (68 in Wales) The organisations taking part in the 2004/2005 NFI exercise included local authorities, police authorities, fire authorities, NHS bodies and probation boards.

• The National Fraud Initiative (NFI) requires authorities to submit information in respect of their financial systems. This information relates to housing benefits, rent, rebates, pension payments, payroll, payments to asylum seekers,  council tenancies, students awards, records of deaths etc. The data supplied is input into a central database designed to match data items to identify potential fraudulent or inappropriate activity.

• The Wales Audit Office is independent of government and is responsible for the annual audit of some £19 billion of annual public expenditure.

• The Wales Audit Office was created on 1 April 2005 following the passing of the Public Audit (Wales) Act 2004, which expanded the functions of the Auditor General for Wales and enabled the transfer of staff from the Audit Commission in Wales and National Audit Office in Wales to his employment.

Ends

For more information please contact Laura Towler Communications and Media Officer on 029 20 26 2675 or email laura.towler@wao.gov.uk