Local authorities have made significant inroads to tackling fraud but must maintain the impetus to crack down on emerging areas targeted by fraudsters, according to the Audit Commission.
In its annual survey of local government fraud and corruption, the commission made four main recommendations to help councils crack down on public-sector fraudsters.
Among its recommendations, the commission urged councils to maintain local codes of conduct and registers of interest and hospitality for both officers and members.
It also called for authorities to produce anti-fraud strategies and put in place whistleblowing arrangements. Setting up a designated police contact was also recommended.
‘Councils have responded positively to the fraud challenge and have detected fraud totalling over #300m,’ said commission controller Andrew Foster. ‘However, the threat of fraud remains, and disturbing new trends are emerging. The challenge to prevent, detect and deter fraud remains a key priority for all in local government.
The amount of fraud increased by 16% from #76m in 1996/1997 to #89m in 1997/1998, according to the report. The number of fraud cases rose by 12% to a total of 233,000 detected cases. Almost all detected fraud – 99% of cases – involved housing and council-tax benefit fraud, which increased by 15% in value to #78m.
‘What rings alarm bells is the sudden increase in some areas which shows targeted organised fraud,’ said Paul Vevers, director of audit support.
New areas targeted by fraudsters include pensions schemes and payrolls.
The value of fraud in these areas rose fourfold in the past year to #1.1m.
‘The best antidote to corruption is a strong control mechanism and whistleblowing procedures. Councils can improve by using prevention alongside detection,’ Vevers said.
He also called for an organised response to tackling fraud with dedicated, cross-boundary units used to detect cases councils cannot pick up on.
The pilot London Organised Fraud Investigation Team, which was axed last week, could provide some useful lessons for similar units in future, Vevers said.
‘Protecting the Public Purse: Local Government Fraud Update 1998’ is available, price #10, from the Audit Commission on 0800 502030.
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