Cutting costs and cutting fraud

The percentage of public sector organisations suffering from fraud has risen to 60%, with ‘accounting fraud’ prevalent and a worrying rise in fraud perpetuated by employees, according to our survey of senior public sector representatives.

 

In November 2009, when we last carried out the survey, 52% of public sector organisations reported suffering economic crime in the previous year. This figure has now risen to 60%.  The main type of fraud we found being carried out - accounting fraud - is often seen as a victimless crime but ultimately the UK tax payer pays the price.   

Historically the public sector has focused on preventing and detecting crimes committed by external parties but organisations can’t afford to ignore the threat posed by internal fraudsters.  As the economic climate moves against the individual, with the spectre of redundancies, cost cutting and pay freezes, there is more incentive on individuals to act dishonestly.  

Having a robust fraud risk assessment in place and reviewing this regularly is crucial and is one area of prevention and detection discussed in the report, along with whistleblowing.