£6.5m fraud and overpayments identified by National Fraud Initiative in Wales

£6.5 million in fraud and overpayments have been identified in Wales, by a national fraud initiative.

The Auditor General’s report revealed that more than £49.4m of fraud and overpayments have been found in Wales since the National Fraud Initiative (NFI) – a biennial exercise – began in 1996.

The 2020-21 NFI exercise helped Welsh public bodies identify £6.5million of fraud and overpayments, and in so doing protected financial resources needed to deliver vital public services. 

The NFI in Wales also helped organisations in other parts of the UK identify 153 cases of fraud and error amounting to £183,045.

“Identifying £6.5 million in this latest NFI exercise is an important contribution to public service funding across Wales. It is more important than ever that organisations have sound governance and controls in place to help protect vital services from the risk of fraud. 

“The success of the NFI depends on the proactivity and effectiveness of participant bodies in investigating the data matches, and it is disappointing that some Welsh bodies did not adequately engage in NFI 2020-21. 

“However, I recognise that the public bodies faced considerable pressures due to the Covid-19 pandemic. We recommend that all bodies use our checklist to self-appraise their involvement in the NFI before and during the 2022-23 NFI exercise,” said Auditor General Adrian Crompton.

£1.5m reduction

The value of Welsh outcomes in NFI 2020-21 reduced by £1.5 million from the previous NFI exercise. 

This decrease is because the number of fraudulent or erroneous claims for council tax single person’s discount and housing benefit identified through NFI fell. 

The reduction in outcomes in these areas was partly offset by an increase in the detection of ineligible applications for social housing and claims for Covid-19 business support grants. 

While overall outcomes have fallen, this is partly due to a timing issue. 

Many NFI participants started review of NFI matches later than normal due to work pressures arising from the Covid-19 pandemic. Late savings arising from the 2020-21 NFI exercise will therefore be reported as part of the NFI 2022-23 exercise.

Seven main areas generated almost 98% of the outcomes. These areas were: housing benefit, creditor payments, council tax discount, blue badges, Covid-19 business support grants, council tax reduction scheme and waiting lists.

Although most Welsh NFI participants display a strong commitment to counter fraud and to investigating NFI matches, the report highlights that some local authorities reviewed very few of the matches they received, and as a consequence did not do sufficient work to address potential frauds.