The view from: Derek Elliott FCCA, head of the Audit Commission’s Governance and Counter Fraud Practice
Q. What is your progress in countering fraud?
A. Exciting – but worrying. A key aim of the Audit Commission is to raise awareness of risks of fraud and help improve the effectiveness of counter-fraud arrangements in local public bodies. We produced our first Protecting the Public Purse-Local Government report in the mid nineties. There have been many positive governance and cultural changes since then and the importance of fraud fighting as a profession is now recognised. Our recent report records some excellent results where councils have seized opportunities. But good practice is not universal and fraudsters are becoming more skilled in finding new ways of attacking organisations and citizens. Periods of intense pressure on services, combined with declining financial resources and staff cuts, can provide new opportunities for organised fraudsters if appropriate steps are not taken.
Q. What plans do you have to extend your operations?
A. We are introducing a new annual survey of fraud in local government. Information from this will help the bodies we audit improve the effectiveness of their counter-fraud arrangements and inform future work. The survey results will also help the new National Fraud Authority as they assess national fraud risks.. We have a highly successful data matching operation, the National Fraud Initiative, which is growing and helps focus counter-fraud activities in the public sector on high risk areas.
Q. Have you lost your faith in people’s honesty yet?
A. No. However, the numbers of individuals and organisations under financial pressure will continue to increase for the foreseeable future. All organisations must take the right steps to protect the purse of the public, as well as the public purse. That will help to ensure that there is still an ‘honest majority’.
Q. How does being an FCCA assist you?
A. It helps me keep up-to-date with the issues facing the private and public sector.
FAST FACTS
£2bn – value of social housing occupied by tenants obtaining them fraudulently
£100m – annual cost of fraud by residents falsely claiming council tax single person discount
Derek Elliott is a trustee and treasurer of the whistle blowing charity Public Concern at Work.
He has an MA in Fraud Management.
Unfortunately NFI figures on so-called ‘single person discounts’ cannot be trusted as they falsely believe that in law some such thing exists and that the electoral register shows that there is lack of entitlement. On the basis of this false belief, hundreds of thousands of abortive investigations have been carried out. The NFI pilots showed that over three thousand investigations had to take place before one case likely to go to court was found. I obtained a copy of the guidance provided by the NFI on how to interpret the output of its electoral register based comparison. It is legally garbage. In February 2009, as a result of complaints, the NFI for the first time obtained a legal briefing on council tax discounts. The solicitor who undertook it agreed that NFI publications were legally inaccurate. However, the NFI continues to publish legally inaccurate accounts and to issue legally inaccurate guidance to councils. Some of them appear to believe it.
At the same time, the NFI praises councils whose day to day administration of council tax discounts appears to be at odds with the law. They put incorrect information into the public domain and provide false information to residents.
This is a national scandal with one day some responsible journalist will tackle, instead of being seduced by the nonsense about ‘single person discounts’.
Council employees who ‘blew the whistle’ on the legally flawed information sent to them by the Audit Commission should get legal protection, and it is good to see that Mr Elliott is in a charity which supports whistle blowers.
So let’s hope that a few of them do get up the courage to blow the whistle on this particular piece of maladministration and error.