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£50M FRAUD UNCOVERED IN LARGEST-EVER DATA MATCHING EXERCISE

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The Audit Commission has uncovered£50m in fraud and overpayment through its major two-yearly data-matching exercis...
The Audit Commission has uncovered£50m in fraud and overpayment through its major two-yearly data-matching exercise, the National Fraud Initiative.

Match Winner , the latest report from the NFI, shows that matching council records with other data has exposed£50m in fraud and overpayment - a 20% increase on fraud uncovered two years ago. The richest sources of fraud were housing benefit, where£24m was detected and occupational pensions, also accounting for£24m.

The NFI has been run by District Audit for the Audit Commission since 1996. But the latest report includes for the first time data from some NHS payrolls, private sector pension funds and council rent records. This exposed new areas of fraud that would otherwise have gone undetected, including:

* the largest individual benefit fraud uncovered by NFI of£83,000, claimed by an NHS employee

* fraudulent tenancies resulting in councils recovering properties and giving them to families in genuine need.

Around 600 organisations took part in the data-matching exercise, including councils, police and fire authorities, pension agencies, the NHS and central government bodies. Following this year's successful pilots, the next exercise will include all NHS payroll data and a greater number of pension funds, both the private and public sector. Also, early collaboration with Audit Scotland and the Northern Ireland Audit Office will be extended.

There are plans also to pilot a number of new areas, such as Home Office asylum seeker data which should help uncover landlord fraud in the area of housing benefits and accommodation for asylum seekers.

Many authorities have good systems in place to report their data to the NFI, and to act swiftly on the reports they receive back. However, some public bodies could lessen the duration of fraud and bring criminals to justice earlier, by prioritising their NFI activity.

Andrew Foster, Controller of the Audit Commission said:

'The net is tightening around those who attempt to defraud the public purse. By sharing information, public bodies are helping shine a spotlight on areas that have gone un-investigated in the past. The National Fraud Initiative is an example of joined-up working bringing positive results not just for individual agencies, but for the entire public sector. On top of the losses uncovered, this will deter would-be fraudsters who have progressively fewer places to hide. The Audit Commission is committed to expanding this useful national exercise, bringing more public and private organisations into the fold.'

Notes

1. The Audit Commission's National Fraud Initiative (NFI) has become the UK's premier public sector fraud detection and deterrence exercise through collaboration with Audit Scotland and the Northern Ireland Audit Office. The NFI uses advanced data-matching techniques, and successive exercises since 1996 have seen the introduction of many new areas of data and widespread participation throughout local and central government. More than 600 bodies took part in NFI_2000, contributing data from over 1,500 systems as diverse as those relating to housing benefits, payroll, pensions, asylum seekers and housing rents.

2. The NFI forms part of the statutory external audit process at councils, police and fire authorities in England and Wales. Audited bodies and other participating organisations supply data for cross matching between systems to identify instances where a fraud may be occurring, for example, someone claiming housing benefit and receiving a salary or pension which precludes any entitlement to benefit. These matches are returned to local authorities, health bodies and other public sector organisations for investigation. The results of these investigations have meant that since 1996 more than£110m of fraud and overpayments have been detected, including£46m in NFI_2000.

3. The use of data for NFI purposes is governed by strict protocols that have been developed after consultation with the Information Commissioner to ensure compliance with data protection and human rights legislation. The Audit Commission's Code of Data Matching Practice first issued in 1997 continues to be revised and a new version should be in place for the next exercise beginning in October 2002.

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