Agenda Item No
The Vale of Glamorgan Council
Audit Committee: 25th February 2013
Report of the Head of Accountancy and Resource Management
National Fraud Initiative
Purpose of the Report
To inform members of the Audit Committee regarding the National
Fraud Initiative (NFI) 2012/13.
1. That the
report is noted, and further reports are presented to the Audit
Committee in order to provide updates on the progress of NFI
Reason for the Recommendation
1. To be informed of the progress of the
NFI as part of the data match exercise in 2012/2013.
The National Fraud Initiative is a biennial data match exercise
conducted by the Audit Commission. All local authorities have
a statutory obligation to participate in this exercise. The
Wales Audit Office monitor activity in Wales and they have reported
that the 2008/2009 exercise produced savings of £4.5 million and
the 2010/11 exercise produced savings of £6 million.
The purpose of the exercise is to match data sets provided by the
Council with the Council's own internal data and with data sets
provided by outside bodies such as other Councils across the UK,
the Department for Work and Pensions (DWP), Immigration and the
National Health Service in order to identify fraud and
Examples of the type of issues that matches can identify would
include; payroll or pensions being matched to a current Housing
Benefit claim to identify undeclared income or an undeclared person
at the property; DWP deceased records identify permit holder or
care home residents where permits or payments had not been
cancelled after the customer passed away; Multiple Insurance claims
to different Councils by the same person or families; Persons
employed in 2 full time roles at the same time; Incorrect National
Insurance Numbers on payroll or benefits systems.
Relevant Issues and Options
The Council has successfully provided the required data for the
latest exercise to the Audit Commission. The data was provided in
October 2012. This is in accordance with the schedule
Data sets provided to the Audit Commission are: Payroll; Trade
Creditors payment history and standing data; Housing; Housing
Benefits; Private supported care home residents; Transport passes
and permits - including residents parking, blue badges and
concessionary travel; Insurance claimants; Licences including
market traders, taxi drivers and personal licence to supply
The matched data became available via a secure web application on
29th January 2013. Matches on the secure web application are
prioritised based on the quality of the matched data and the
significance of the match. For instance, a match of national
insurance numbers is considered a top quality match, as is any
match involving immigration data. In addition, a filter has been
incorporated by the Audit Commission in order to identify those
matches that are recommended as the most likely to lead to a result
and also to enable matches with the highest monetary value and
therefore the greatest potential saving, to be prioritised.
A total of 4,177 matches were received. Of these, 2,309 related to
trade creditors and 177 are recommended matches. The purpose of
these matches is to identify potential duplicate creditors,
invoices and payments. An Auditor has been allocated to test these
The remaining 1,868 matches relate to Payroll, Housing Benefit,
Insurance claimants, Housing rents and licence holders, blue badge
holders and of these matches 313 remained once the recommended
filter had been applied.
10. Initial work on these
filtered matches has commenced and results will be reported to the
Audit Committee in due course.
11. It should be noted
that for this current exercise there were no residential care home,
residential parking permit or concessionary travel permit matches
received and blue badge matches were minimal, only 9 received and
all of these as a result of customers requesting a blue badge from
2 Local Authorities at the same time. The lack of matches in these
areas is due to the Council's introduction of 'tell us once'. When
a death is notified to Registrars permission is sought to share the
information with different agencies including Council Departments
and the Department for Work and Pensions. Permits can then be
cancelled in a timely manner and matches with the DWP deceased
records are avoided.
12. Matches include some
Housing Benefit claims where Income Support or Jobseekers Allowance
is in payment. Potentially fraudulent claims identified will be
investigated under joint working arrangements currently in place
with the DWP.
13. In October 2013,
Council Tax records will be matched to the Electoral Register in
order to identify cases where single person discount is being
Resource Implications (Financial and Employment)
14. A Key Contact within
Internal Audit co-ordinates NFI activity, ensuring that an
appropriate Officer is responsible for providing each set of
required data in the specified format and to a timetable set by the
Audit Commission. Officers are also required to be available to
review the matches when they are received.
Legal Implications (to Include Human Rights Implications)
15. The information from
the Council has been provided to the Auditor General as requested
under statutory powers. Relevant Human Rights and Data Protection
issues have all been considered fully prior to providing the
Crime and Disorder Implications
16. Participation in this
initiative will assist the Council in protecting the public money
it looks after.
17. The purpose of the
National Fraud Initiative is to identify fraud and error utilising
modern data matching techniques across a wide range of
participating organisations. The sanctioning of offenders,
including prosecution, may follow if appropriate in accordance with
the Council's Anti-Fraud & Bribery Policy.
18. Pursuing initiatives
to prevent, detect and deter crime is encompassed within the terms
of reference under which Internal Audit operates.
Equal Opportunities Implications (to include Welsh Language
19. None as a direct
consequence of this report.
20. The work of Internal
Audit is intended to assist in the achievement of all corporate and
Policy Framework and Budget
21. The proposals in this
report do not contravene the policy framework or budget.
Consultation (including Ward Member Consultation)
22. No further
consultation is proposed.
Relevant Scrutiny Committee
Helen Smith - Principal Auditor Tel: 01656
External Audit Manager - Grant Thornton UK
Alan Jenkins - Head of Accountancy &