Audit Scotland
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.
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
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: 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 2018/19
Scotland's public finances have been boosted after a data sharing exercise identified over £15 million of potential fraud and errors across the public sector. But auditors have warned that the Covid-19 pandemic has brought additional fraud risks.
This report was published in July 2020.
Our interactive Tableau visualisations illustrate some of the data from our report.
National Fraud Initiative outcomes 2016/17
The 2016/17 Scottish NFI outcomes are derived from the 2016/17 NFI exercise and late outcomes from the 2014/15 NFI exercise. Detailed data from the 2016/17 exercise can be downloaded below.
Information on the 2020/21 National Fraud Initiative exercise
Instructions for participants 2020/21
The 2020/21 instructions include important guidance and instructions for participating bodies including data requirements, data specifications and the 2020/21 timetable. It will be regularly updated throughout the exercise.
Participants in the National Fraud Initiative 2020/21
This details the Scottish bodies participating in the 2020/21 exercise in Scotland.
Privacy notice
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.
Self-appraisal checklist
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 235Kb
Code of data matching practice 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) 2020/21 national exercise and NFI council tax single person discount 2020/21 exercise have been set by the Cabinet Office and are as follows:
Changes for 2020/21 exercise - PDF 203Kb
Electoral Register data specification - PDF 282Kb
Trade creditors standing data specification - PDF 228Kb
Trade creditors payment history data specification - PDF 225Kb
Council Tax data specification - PDF 325Kb
Personal budgets and social care payments data specification - PDF 636Kb
Transport passes and permits data specification - PDF 293Kb
Pensions data specification - PDF 286Kb
Private supported care home residents data specification - PDF 225Kb
Payroll data specification - PDF248Kb
Council Tax Reduction Scheme data specification- PDF 247Kb
Licenses data specification - PDF 236Kb
NHS Patient Exemptions (Scotland only pilot) data specification - PDF 217Kb
Housing waiting list data specification - PDF 445Kb
Housing tenants data specification - PDF 338Kb
Non domestic rates (Scotland only pilot) data specification - PDF 87Kb
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
Business rates data specification - PDF 87Kb
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: 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 2020/21
This report sets out a range of fraud risks emerging since the start of the Covid‑19 pandemic. It also shares information about cases where internal control weaknesses in public bodies have led to fraud and irregularity.
Presentations
We regularly give presentations about the National Fraud Initiative and our work. The presentation below was made to CIPFA.
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.
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.
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
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.
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.