Local authorities need to enhance their fraud detection procedures, according to the Audit Commission, despite a successful year in which detection rates of social security benefit fraud doubled.
Following the publication of its annual fraud survey last week, the commission said that councils must invest in computer-based techniques to increase the amount of benefit fraud they discover. It also argued that councils should set up audit committees to monitor internal fraud prevention controls – a scheme attacked as expensive and unnecessary by local authority groups.
Paul Vevers, the Commission’s operational director, said: ‘We think there needs to be a much sharper focus on the detection of fraud. The number of fraud cases detected in 1995-96 increased by 48% to 166,000, while the amount of fraud rose from u46.5m to u69.5m.
Vevers said he was pleased that fraud within local government still only accounted for just 1% of the total. But he conceded that the figure could be artificially low because councils found it hard to identify and prosecute cases of corruption. He stressed that new types of fraud were being detected all the time.
The Commission said opportunistic frauds perpetrated by individuals as well as organised frauds had come to light in trials of computer matching in London and Manchester. The software matches names of claimants to a range of other data to discover if fraud has occurred.
Vevers said that management controls and fraud prevention procedures needed constant evaluation. ‘Probity issues always fall down the agenda in education and housing committees. An audit committee would put probity back at the top of the agenda.’