Counter-fraud

Counter-fraud

Here you will find information about the range of counter-fraud work that Audit Scotland is involved in as well as signposts to other organisations with an interest in this area.

As public finances continue to tighten and the number of people working in the public sector reduces, there is a risk that controls set up in public bodies to combat fraudulent activity, corruption and error are compromised. This can result in the loss of public money and affect our public services. Read more about Audit Scotland's work and the partners we work with in Angela Canning's blog.

Raising a concern about fraud or corruption

If you believe that there is fraudulent activity going on in a Scottish public body, you can find out how to tell us and share your information with us here, or you may wish to report your concerns directly to the police.

Covid-19 - Emerging fraud risks

The Covid-19 pandemic has brought significant challenges across the Scottish public sector as bodies seek to deliver services for individuals, communities and businesses in an extremely difficult time.

 Download the document on emerging fraud risks - PDF 546KB

Covid-19 - Emerging fraud risks

Procurement in the public sector - how red flags can help us to stop and consider fraud

Audit Scotland and Police Scotland have developed a document that highlights some red flags in procurement activity and the controls that can help to prevent fraud. Read more in Angela Canning's blog.

 Download the document on red flags in procurement - PDF 2.6MB

Red flags in procurement

National Fraud Initiative

The National Fraud Initiative (NFI) in Scotland is a counter-fraud exercise led by Audit Scotland, and overseen by the Cabinet Office for the UK as a whole. It uses computerised techniques to compare information about individuals held by different public bodies, and on different financial systems that might suggest the existence of fraud or error. It means that public bodies can take action if any fraud or error has taken place, and it allows auditors to assess fraud prevention arrangements that those bodies have.

National Fraud Initiative: Non-domestic rates - Small Business Bonus Scheme pilot

A recent pilot used data matching techniques to match non-domestic rates Small Business Bonus Scheme (SBBS) relief data between Scottish councils. This was the second pilot exercise looking at SBBS relief. This pilot extends a previous pilot carried out in 2019/20 which looked at SBBS relief in seven councils.

The 2019/20 exercise identified 480 matches which resulted in £412,974 in incorrect SBBS awards being identified. This latest pilot exercise identified 17,578 matches which resulted in £2.15 million in incorrect SBBS relief being identified in 207 SBBS awards. Councils will now try to recover SBBS relief which was incorrectly awarded.

Given the success of this pilot, consideration is now being given as to how this data match can be repeated on a regular basis as part of the full NFI exercise.

 Download the pilot report - PDF 304Kb

 

National Fraud Initiative: National Entitlement Cards pilot

A recent pilot used data matching techniques to help identify National Entitlement Cards (NECs) which are still in circulation for adults over 18 years of age who have died. This work focused on the use of NECs for free bus travel.

The pilot was undertaken as part of the development of the NFI. NEC data is not currently included as part of the NFI.

Audit Scotland worked with Fife Council, the National Entitlement Card Programme Office (NECPO) and Transport Scotland on this pilot.

Fife Council provided a total of 112,044 NEC records for matching against deceased person records. This resulted in 1,737 matches being cancelled as it was established that the customers had died. Thirteen matches showed cause for concern as the NECs appeared to have been used after the death of the cardholder. Two of these cards were used for journeys to the value of almost £2,300 for one, and £240 for the other. The value of the journeys for the other 11 cards varied from £3.10 to £69.00. Investigations are continuing into the individuals who used these cards.

Consideration is being given to expanding this data matching in our future NFI work.

 Download the pilot report - PDF 196Kb

 

National Fraud Initiative: Non-domestic rates pilot

A recent pilot used data matching techniques to help identify businesses inappropriately claiming Small Business Bonus Scheme (SBBS) relief across a sample of seven council areas. The pilot was undertaken as part of the development of the NFI. Non-domestic rates data is not currently included as part of the NFI.

The seven participating councils provided 81,827 ratepayer records which were matched across councils and with data from Companies House in order to identify SBBS fraud. The pilot identified £412,974 in incorrect awards being identified. The extrapolated value of outcomes for all Scottish councils is £1.9 million. Some system weaknesses were also identified, and recommendations have been issued for improvements where appropriate.

Consideration is being given to expanding this data matching work.

 Download the pilot report - PDF 248Kb

 

The National Fraud Initiative in Scotland 2022

The overall level of identified public sector fraud and error in Scotland has fallen slightly, according to the results of a national counter-fraud exercise.

This report was published in August 2022

More information: interactive data

This interactive report brings together various exhibits related to the NFI outcomes. The information is provided by sector and broken down by participating body. You can use it to search the data, and to see visualisations.

 

 

Information on the 2022/23 National Fraud Initiative exercise

Instructions for participants 2022/23Published July 2022

The 2022/23 instructions include important guidance and instructions for participating bodies including data requirements, data specifications and the 2022/23 timetable. It will be regularly updated throughout the exercise.

 Instructions for participants - PDF 298Kb

Participants in the National Fraud Initiative 2022/23 Published July 2022

This details the Scottish bodies participating in the 2022/23 exercise in Scotland.

 2022/23 participants in Scotland - PDF 180Kb

Privacy noticeUpdated September 2022

This broader description forms part of the privacy notice for individuals whose information is submitted to Audit Scotland for the purpose of the National Fraud Initiative in Scotland.

 Privacy notice - PDF 202Kb

Self-appraisal checklistPublished July 2022

This document contains a two-part checklist that we encourage all participating bodies to use to self-appraise their involvement in the NFI. Part A is designed to assist audit committee members and Part B is for officers involved in the NFI exercise.

Some suggestions for improving the efficiency and effectiveness of reviewing and investigating NFI matches are also included.

 National Fraud Initiative - Self-appraisal checklist  - PDF 210Kb

Code of data matching practice 2018Published September 2018

This Code of data matching practice was issued on 28 September 2018 under Section 26F of the Public Finance and Accountability (Scotland) Act 2000 (as amended).

Data specifications

The data set specifications for the National Fraud Initiative (NFI) 2022/23 national exercise and NFI council tax single person discount 2022/23 exercise have been set by the Cabinet Office and are as follows:

 Changes for 2022/23 exercise - PDF 65Kb

The NFI team in the Cabinet Office review data specifications before each exercise. Although changes have been kept to a minimum, some are necessary to improve the matching process and the quality of matches.

 Electoral Register data specification - PDF 282Kb

The Electoral Register data should be the 'full version' of the Electoral Register (not the commercially available 'edited version') and should be extracted and submitted after the Register is formally published.

 Trade creditors standing data specification - PDF 228Kb
 Trade creditors payment history data specification - PDF 225Kb

Trade creditors standing data should be a snapshot of trade creditors current at the date of extraction, exclude dormant or suspended creditors and cover the period given in the data specification.

 Council Tax data specification  - PDF 325Kb

The data should only be current/live accounts and relate to all council tax accounts, whether or not there is a discount or exemption (i.e. it should cover every domestic property where council tax applies).

 Personal budgets and social care payments data specification - PDF 636Kb

Data should relate to personal budget payments paid as direct payments (for the mandatory exercise) to those applicants over 18 years of age only.

 Transport passes and permits data specification - PDF 196Kb

This specification includes details of the data required for Blue Badges.

 Pensions data specification - PDF 286Kb

Data should be uploaded in 3 separate files. Please note any pensions currently in payment should be included in the 'current pensioners' file.

 Private supported care home residents data specification  - PDF 225Kb

All data should relate to current care home residents at the date of extract who are receiving all, or part, of their funding from the local authority.

 Payroll data specification - PDF248Kb

Payroll data should be provided in accordance with this data specification.

 Council Tax Reduction Scheme data specification- PDF 247Kb

Data should be provided in accordance with the Council Tax Reduction scheme data specification.

 Licenses data specification - PDF 236Kb

This specification includes licenses for taxi drivers.

 NHS Patient Exemptions (Scotland only pilot) data specification - PDF 217Kb

This data specification is in respect of a pilot for NHS Scotland.

 Housing waiting list data specification - PDF 445Kb

Housing waiting list data should be provided in accordance with this data specification.

 

 Housing tenants data specification - PDF 338Kb

The housing data that should be uploaded includes current named tenants.

 

 Non domestic rates (Scotland only pilot) data specification - PDF 87Kb

This data specification is in respect of a pilot for Scottish local authorities in respect to non-domestic rates relief.

Covid-19

Two additional data set specifications have been introduced for Covid-19 post assurance matching. These specifications relate to grants paid out through the Small Business Grant Fund (SBGF) and the Retail, Hospitality and Leisure Grant Fund (RHLGF). The data should be extracted from relevant systems as at 31 December 2020 and submitted to the NFI secure system by 29 January 2021. Both specifications are needed as data is required from both the non-domestic rates system and the grants system/database.

 Covid-19 Business grants data specification - PDF 92Kb

Data should relate to business support paid under the Small Business Grant Fund (SBGF) and the Retail, Hospitality and Leisure Grant Fund (RHLGF).

 Business rates data specification - PDF 87Kb

Business rates data should be provided in accordance with this data specification.

National Fraud Initiative contact details

The NFI in Scotland is overseen by Audit Scotland. Our phone number for all NFI enquiries is: 0131 625 1500.

Information about the UK NFI exercise can be found on the Cabinet Office’s website at www.gov.uk/government/collections/national-fraud-initiative.

Bodies participating in NFI in Scotland should note that they can update their contact details via the 2016/17 NFI secure website or by sending an email to nfiqueries@cabinetoffice.gov.uk.


Other work we do

Safeguarding public money

Safeguarding public money: are you getting it right?

The Accounts Commission has produced this report as part of its 'How councils work' series for councillors. It includes checklists to help them make sure their councils’ money is being safeguarded.

 Download the report on safeguarding public money - PDF 2.1Mb

Fraud and irregularity report

Fraud and irregularity report 2021/22
 

A summary of the cases of fraud and other irregularities at public bodies reported by external auditors for the financial year 2021/22.

 Download fraud and irregularity report - PDF 2.1Mb

NFI presentations

Presentations
 

We regularly give presentations about the National Fraud Initiative and our work. The presentation below was made to CIPFA.

 Download NFI presentation - PPT 1.3Mb

Dundee City Council report

Dundee City Council: Report on significant fraud

Our report on the 2016/17 audit of Dundee City Council found that a £1 million fraud perpetrated at Dundee City Council from 2009-2016 was the result of failures in fundamental controls within the council’s financial systems.

Auditor's role in fraud and money laundering

Auditors' responsibilities relating to fraud

This International Standard on Auditing, published by the Financial Reporting Council in July 2017, deals with auditors’ responsibilities relating to fraud in an audit of financial statements.

 Auditors' responsibilities relating to fraud - PDF 326Kb

Code of audit practice

Code of audit practice

Our Code of audit practice sets the framework for public audit in Scotland, and outlines the responsibilities of external auditors appointed by the Auditor General for Scotland and the Accounts Commission. This includes auditors' responsibilities regarding fraud.

Working with NHS Scotland Counter Fraud Services

We work with NHS Scotland Counter Fraud Services (CFS) in the deterrence, prevention and detection of fraud and other irregularities in NHS Scotland and other public bodies where CFS provides counter-fraud services. The memorandum of understanding below outlines how we work together.

 NHS Scotland Counter Fraud Services - Memorandum of understanding - PDF 113Kb

NHS Scotland Counter Fraud Services

Resources

Protecting public resources in Scotland
 

Produced by the Scottish Government in 2015, this sets out a strategic approach to fighting fraud and error across the public sector in Scotland.

 Protecting public resources in Scotland - PDF 268Kb

Cabinet Office Behavioural Insights Team paper on fraud, error and debt

The Behavioural Insights Team uses behavioural science to make public services more cost-effective and easier to use.Their paper on fraud, error and debt sets out some of the most effective actions which public bodies can take to reduce fraud, error and debt.

Other bodies

Cross-Sector Counter Fraud Forum

The objectives of this forum are to share counter-fraud intelligence and promote opportunities for joint working across all sectors in Scotland. It also looks at how counter-fraud best practice can be disseminated to public sector organisations in Scotland.

The Counter Fraud Maturity Model provides guidance on how mature your counter-fraud controls are.

NHS Scotland Counter Fraud Services

NHS Scotland Counter Fraud Services deals with the prevention, detection and investigation of fraud, embezzlement, theft, corruption and other irregularities against NHS Scotland.

Police Scotland
 

The Police Scotland website includes information about different types of fraud, advice on how to avoid becoming a victim and contact details for reporting a fraud to the police.