19 May 2006
Scottish councils and public bodies have identified fraud and errors totalling £15m, following an investigation carried out as part of the National Fraud Initiative, Audit Scotland has disclosed.
In a report published this week, the public sector watchdog said that, as a result, more than 50 people faced prosecution and 32 employees had been dismissed or disciplined, or had resigned.
The initiative was led by Audit Scotland as part of a UK-wide project co-ordinated by the Audit Commission. Under the NFI in Scotland for 2004/05, councils compared information on benefit applications, public sector employees and pensioners and students with the Scottish Public Pensions Agency and the Student Awards Agency for Scotland.
Following two-year pilot schemes, the latest exercise focused on occupational pensions, and housing and council tax benefits. The investigation found 270 cases where pensions were being paid to people who had died. There were also 564 cases of public sector employees and pensioners either fraudulently claiming housing benefits or receiving them in error, and 215 cases of housing benefit overpayments to students.
In one case, a local government finance officer retired early, but returned to work in a relatively senior capacity with another local authority. The officer failed to disclose the re-employment to the pension authority and was overpaid £31,000 over more than two years. The officer has now resigned and repaid the amount.
Councils, working with other public bodies, hope to recover about £6m of the total identified. Around £9m is expected to be saved by preventing ongoing and future pension payments being claimed in error or fraudulently.
Audit Scotland director of audit strategy Russell Frith said the first year of the NFI had been successful, with the bodies involved finding overpayments and savings of more than £15m. 'With more than 50 people possibly facing prosecution and a number of public sector employees disciplined or dismissed, we hope that the exercise will also act to deter future fraud,' he said.
Even where no significant fraud or errors were found, the bodies involved should be assured that their systems can prevent these from occurring, he added.
PFmay2006
