Almost £3.7m of potential fraud and error identified, auditor finds

Almost £3.7 million of potential fraud and error has been identified or prevented in the last two years by a public sector data matching exercise.

Most of the amount related to pension fraud, error and overpayments, comptroller and auditor general Dorinnia Carville said in her report on the National Fraud Initiative (NFI) exercise in Northern Ireland.

The NFI is a computer-based data matching exercise run every two years.

Public bodies including government departments, agencies, non-departmental public bodies, councils and health sector bodies participate, with their respective data sets matched to help identify potentially fraudulent and erroneous transactions.

For the reporting period April 2022 to March 2024, more than £3.7 million of actual and estimated fraud and error was either detected or prevented through NFI data matching, a decrease from around £4.4 million in the previous exercise in 2020-22.

Of the total amount recovered or prevented, more than £3 million related to pension fraud, error and overpayments.

This represented a decrease from around £4 million in the previous reporting period.

The vast majority of pension outcomes stem from a small number of cases where the pensioner died relatively young and was in receipt of a significant pension.

The report found 46 cases where pensions remained in payment after the date of death of the pensioner.

In one instance, a pensioner died in September 2021 but the pension paying authority became aware of the death via NFI data matches only in February 2023.

Overpayment of pension in this case amounted to £14,108. The pension paying authority is pursuing recovery of the funds through contact with the dead pensioner’s personal representatives. To date the full amount is still outstanding.

In a separate case a pensioner died in September 2022 but the pension paying authority became aware of the death via NFI data matches only in February 2023.

Overpayment of pension amounted to £14,990. The pension paying authority recovered the funds in full in October 2023.

Ms Carville said: “While it is impossible to eradicate fraud entirely, all public bodies in Northern Ireland have a duty to help minimise its impact and to maximise the proper use of funding for public services.

“The NFI exercises have proven to be a valuable tool in achieving this, with over £48 million of public money in Northern Ireland recovered or protected to date.

“The NFI has also played a positive role in making public bodies more aware of fraud and encouraging them to put in place effective controls.

“This has been reflected in the lower amounts detected in some datasets since our previous report.

“There is the potential to further build on this progress through increased participation in the NFI project and the use of additional datasets.”

She added: “I would continue to encourage public sector organisations to join in this collective effort, so that we can deliver further savings and positive outcomes for organisations and taxpayers.”

Other findings in the report include:

– Outcomes relating to rates have increased significantly with more than £500,000 recovered or prevented in this reporting period compared with £57,000 in 2020-22. This is because of renewed focus on data matches now that staff are no longer occupied on high-priority Covid-19-related work.

– More than £90,000 in duplicate payments were recovered from suppliers.