National Fraud Initiative 2008-09

Mr Kieran Donnelly, Comptroller and Auditor General (C&AG), today issued a report on the first application of his new powers1 in relation to the National Fraud Initiative (NFI).

Background

In circumstances where public services are facing unprecedented budgetary pressures, it is imperative that public bodies use every means at their disposal to prevent and detect misuse of public funds. The NFI, which is undertaken every two years, is a highly effective tool which helps public bodies identify fraudulent and duplicate transactions using sophisticated computer based data matching techniques. The data matching exercise compares sets of data, such as the payroll or benefits records of a body, against other records held by the same, or another body to see how far they match. Where a match is found, it indicates that there may be an inconsistency that requires further investigation.
Seventy-four public bodies in Northern Ireland took part in the 2008-09 NFI exercise, including government bodies, agencies, non-departmental public bodies, councils and health sector bodies. So far, over £11 million of fraud, error and overpayments have been identified, and it is projected that total savings from the 2008-09 exercise may exceed £16 million. The C&AG paid tribute to all public servants involved in this exercise who, through their determined efforts, have sent a very clear message that their organisations will not be a soft touch for fraudsters and that fraud will not be tolerated.

Main Findings:

The report’s key findings are:

  • by September 2010, housing benefit overpayments of £2.2 million and 2,240 cases of suspected fraud had been identified. It is projected that overpayments will rise by a further £1.5 million;
  • almost £8.4 million in savings, involving non-payment, fraud and error, have so far been identified in domestic rates, and it is projected that this figure will rise by a further £3.2 million;
  • 5,142 blue badges, issued to those with severe mobility problems and which give entitlement to a range of parking concessions, were registered to people who were deceased;
  • suspected fraud, error and overpayment of £729,000 was found in relation to pension payments; and £209,000 was overpaid to suppliers.

Lessons for the Next NFI Exercise

The NFI 2008-09 exercise provides strong evidence of the benefits of using data matching for the prevention and detection of fraud and should help persuade bodies in both the public and private sectors of the strong arguments for participating in NFI.
As with the introduction of all new initiatives there are some lessons that can be learnt and bodies will already be aware of how they could better prepare for, and implement, future NFI exercises. The report identifies opportunities for gaining greater benefit from the next NFI exercise for 2010-2011, which is already underway:

  • NFI should be embedded into the core business practices and counter fraud strategies of bodies;
  • careful consideration should be given to the level of resources needed to follow up data matches;
  • data matches should be prioritised and followed up promptly and rigorously; and bodies should consider whether they can improve the quality of their records.


The C&AG said that “although the roll out of NFI in Northern Ireland has been very successful, I believe that there is considerable scope to further exploit the potential of data matching. It is important that public sector bodies embrace this new tool, making it a key component of their counter fraud strategy, and embed it into their core business. I am keen to explore with bodies how, working together, we can further develop and widen our involvement in NFI. I therefore welcome all approaches by both public and private sector bodies highlighting potential data sets that will help expose and reduce public sector fraud.”

1 The Serious Crime Act 2007 inserted provisions dealing with data matching exercises into the Audit and Accountability (Northern Ireland) Order 2003.