Civil Service fraud sky-high

Civil Service fraud has risen by more than 50% in two years, according to an internal Treasury fraud report obtained by Accountancy Age.

The number of cases of fraud carried out by civil servants jumped by nearly a third last year and has doubled since 1995. The figures have caused concern among some senior officials that attempts to crack down on fraud in government departments are failing.

Officials stole #2.1m in a variety of ingenious schemes documented in the Treasury’s Fraud Report 1996/97, which aims to alert managers to the extent of fraud in Whitehall departments.

The total shows a decline on the previous year when z2.8m was stolen.

This figure included one case of z1m, which arose after an Inland Revenue employee was accused of falsifying documents to help outsiders to evade tax bills. In the last year, three cases accounted for about #700,000.

Theft of departmental assets is the most popular crime, though false invoice frauds and travel and subsistence frauds follow close behind.

In one case an official set up three fraudulent benefit claims and then intercepted the giro cheques paid out to their local office. The officer, who held the posts of benefits supervisor, post opening supervisor and finance officer, siphoned off #243,000 over eight years before a cashier spotted that postbags were unsealed when they received them.

Another civil servant trawled computer records for names and addresses that could be used by organised fraud rings. The unnamed department lost z307,098 from false claims.

The Treasury attempted to play down the rise in cases of fraud, claiming that increased fraud awareness campaigns and improvements in fraud reporting procedures accounted for much of the rise.

Worryingly, 19 departments reported no cases of fraud had taken place.

The figures also excluded frauds perpetrated by contractors. One fraud expert said: ‘These figures only include reported crimes and cases of fraud are likely to be higher, especially if some departments say they haven’t got any fraud at all.’

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