A national scheme designed to detect fraud in the public sector has saved millions of pounds of public money according to a report released today by the Auditor General for Wales. The 2006/2007 National Fraud Initiative (NFI) exercise has been the most successful to date since its inception in 1996. For the period 2006/2007 the total value of fraud and overpayments reported increased by 73 per cent, from £2.6 million as reported in 2004/2005 to £4.5 million in 2006/2007.
The 2006/2007 NFI exercise marked the first time recipients of the council tax single person discount were cross-checked with the electoral register. A pilot exercise, involving Cardiff Council, successfully identified savings of over £2.5 million to the public purse.
The NFI works by comparing data from different public bodies to find suspicious cases. The value of fraud detected by the NFI has increased due to the increasing sophistication of the methods the NFI uses and the willingness of individual bodies to investigate the cases.
In some areas, such as housing benefit, the evidence suggests the value of fraud and overpayments identified by the NFI has reduced, and this suggests that previous exercises of NFI have been successful in eliminating many of the long running, and hence high value frauds.
Developments have also been made to the security of the National Fraud Initiative producing significant benefits in 2006/2007. The introduction of a new secure web-based tool to record results has removed the risk associated with the physical transfer of datasets.
Seventy Welsh public sector bodies participated in the 2006/2007 exercise with participants including local authorities, police authorities, fire authorities, NHS Trusts, local health boards, probation boards and the National Assembly for Wales.
Whilst this report produced some significant findings, there are a number of public services where there is scope for applying data matching further to detect and prevent fraud. The Wales Audit Office has indicated its commitment to the development of the NFI and other data matching exercises.
The Auditor General, Jeremy Colman said today:
"The results show what can be achieved when public sector bodies work together to combat fraud. Fraud is a serious issue; it reduces the money available for public services and confidence in the bodies that provide them. The NFI has been vital in identifying and combating fraud, its long term value for the public sector has become immeasurable."
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