About the National Fraud Initiative
This section introduces the National Fraud Initiative.
The National Fraud Initiative is an innovative data matching exercise which has been highly successful in detecting fraud. Since 1996 it has helped to identify fraud and over-payments totalling in excess of £400 million.
It is essential that public bodies have adequate controls in place to prevent and detect fraud and error. Fraud in local government, the health service and other public bodies is a major concern of those bodies as well as of the Audit Commission and the auditors it appoints to those bodies.
The National Fraud Initiative, known as the NFI, is a data matching exercise that has operated since 1996. The NFI assists audited bodies to prevent and detect fraud and error, and also help auditors to assess the arrangements that audited bodies have put in place to deal with fraud.
Data matching in the NFI involves comparing sets of data, such as the payroll or benefits records of a body, against other records held by the same or another body to see how far they match. This allows potentially fraudulent claims and payments to be identified. Where no match is found, the data matching process will have no material impact on those concerned. Where a match is found, it indicates that there is an inconsistency that requires further investigation. In the NFI, participating bodies receive a report of matches that they should follow-up, and investigate where appropriate, to detect instances of fraud, over- or under-payments and other errors, to take remedial action and update their records accordingly.
From 2008 the Commission will conduct data matching exercises under its new statutory powers in the Audit Commission Act 1998. Previous exercises were conducted as part of the statutory audit prescribed by that Act.
More details on the Audit Commission’s data matching exercises, including national reports, other publications and guidance, may be found at www.auditcommission.gov.uk/nfi.
East Devon District Council’s Fair Processing Statement
This authority is required by law to protect the public funds it administers. It may share information provided to it with other bodies responsible for auditing or administering public funds, in order to prevent and detect fraud. The Audit Commission appoints the auditor to audit the accounts of this authority.
It is also responsible for carrying out data matching exercises. Data matching involves comparing computer records held by one body against other computer records held by the same or another body to see how far they match. This is usually personal information. Computerised data matching allows potentially fraudulent claims and payments to be identified. Where a match is found it indicates that there is an inconsistency that requires further investigation.
No assumption can be made as to whether there is fraud, error or other explanation until an investigation is carried out.
The Audit Commission currently requires us to participate in a data matching exercise to assist in the prevention and detection of fraud. We are required to provide particular sets of data to the Audit Commission for matching for each exercise, and these are set out in the Audit Commission’s guidance, which can be found at www.audit-commission.gov.uk/nfi.
The use of data by the Audit Commission in a data matching exercise is carried out with statutory authority under its powers in Part 2A of the Audit Commission Act 1998. It does not require the consent of the individuals concerned under the Data Protection Act 1998.
Data matching by the Audit Commission is subject to a Code of Practice. This may be found at www.audit-commission.gov.uk/nfi/codeofdmp.asp.
For further information on the Audit Commission’s legal powers and the reasons why it matches particular information, see www.auditcommission.gov.uk/nfi/fptext.asp. For further information on data matching at this authority contact [Tanith Cox, 2687].
