Public sector better at preventing fraud

26 May 11
Public sector organisations are better at protecting themselves from fraud than private sector bodies, according to a report published today.

By Lucy Phillips | 27 May 2011

Public sector organisations are better at protecting themselves from fraud than private sector bodies, according to a report published today.

On a 50-point scale of fraud resilience drawn up by the University of Portsmouth and PKF accountants, public sector bodies scored an average of 34.4 points compared with 30.6 for private companies. 

But there was wide variation between the 267 public sector organisations that took part in the research, with the NHS proving the most resilient to fraud with 44.4 points. Higher education institutes were least well protected, scoring just 28.9 points.

The report The Resilience to Fraud of the UK Public Sector also found that less than half of public sector bodies accurately estimated the cost of fraud.

Jim Gee, report co-author and chair of the Centre of Counter Fraud Studies at Portsmouth University, said: ‘Fraud can be hugely damaging to any organisation, but especially so to taxpayer-funded public bodies at a time when the government is making serious reductions in expenditure.

‘The scale of the problem is thought to run into tens of billions of pounds each year so there is a clear need to examine how well our public services protect themselves – and, by extension, us – against the unnecessary cost of fraud.’

He added: ‘The findings of the report are encouraging in a number of respects and go some way towards reassuring taxpayers that the public sector is doing a much better job in tackling fraud than many people give it credit for. But that doesn’t mean that the fraud teams within public bodies can sit on their hands.’

Earlier this month Communities Secretary Eric Pickles published a ten-point counterfraud blueprint for councils after the National Fraud Authority revealed £2bn was lost to local authorities in fraud each year.

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