Scotland’s councils have worked with other public bodies to identify £15m worth of fraud and errors in a national detection exercise.
Under the 2004/05 National Fraud Initiative (NFI), councils compared information about benefit applicants, public sector employees and pensioners, and students with the Scottish Public Pensions Agency and the Student Awards Agency for Scotland to find fraud and errors.
As a result they found around £6m of fraud and error that the bodies can now seek to recover and about £9m they will save by preventing ongoing and future pension payments.
Audit Scotland’s director of audit strategy Russell Frith said: “The first year of the National Fraud Initiative has been successful, with all Scottish councils taking part and the bodies involved finding overpayments and savings of more than £15m. With more than 50 people possibly facing prosecution and a number of public sector employees disciplined or dismissed, we hope that the exercise will also act to deter future fraud.
“Even where bodies did not find significant fraud or errors, they should be able to take assurances about their systems for preventing and detecting them.”
Audit Scotland led the introduction of the National Fraud Initiative in Scotland as part of a UK-wide project co-ordinated by the Audit Commission in England. Not all cases involved actual fraud; the NFI also enables public bodies to detect overpayments made in error or through honest misunderstandings.
Following pilot schemes in 2000/01 and 2002/03, the latest exercise focussed on occupational pensions and housing and council tax benefits.
The bodies involved found 270 cases where pensions were being paid to people who had died. They also found 564 cases of public sector employees and pensioners either fraudulently claiming housing benefits or receiving them in error, and 215 cases of housing benefit overpayments to students.
As a result there have been 53 prosecutions or cases that have been referred to the Procurator Fiscal and 32 employees have been dismissed or disciplined or have resigned.
Audit Scotland is working with the Audit Commission to widen the scope of the NFI during 2006/07. Public bodies will provide information again in October this year as part of their 2006/07 audits and will have fresh information to investigate in early 2007.