NAO Good Practice Guide - Tackling external fraud - HM Treasury

4 Good practice in tackling external fraud | Detecting and investigating external fraud and imposing sanctions
3.19 Departments also need to look at whether
the total number of investigations is commensurate
with the potential sums lost from fraud. The costs
of investigating cases can be resource intensive.
Assessing the financial return achieved on the
overall caseload, and different categories of case
will indicate the likely benefits of undertaking more
investigations or a different mix.
Figure 29
The Department for Work and Pensions has a dedicated
intelligence function to evaluate cases of potential fraud
and decide which to investigate
The Department for Work and
Pensions has a network of 10
Operational Intelligence Units
located across England, Scotland
and Wales. When referrals are
received for investigation the
Fraud Referral and Intervention
Management System (FRAIMS)
applies a rules engine that
determines routes for investigation
and provides a Gateway through
which cases can be channelled.
This clarifies whether cases should
be investigated via the Fraud
Investigation Service or Customer
Compliance route (see Figure 14).
For fraud investigation cases, the
Operational Intelligence Units then
gather and evaluate intelligence on
cases to assist fraud investigators,
including exchanging information
with other agencies where
appropriate.
Figure 30
HM Revenue & Customs uses criteria for deciding which
cases to refer for criminal investigation
HM Revenue & Customs has a published policy setting out the types of
behaviour it will usually consider for criminal investigation. These include
factors such as whether the fraud is an attack on the system, the type of
person carrying out the fraud and previous behaviour. The objective of the
criteria is to ensure that resources can be targeted where they have the
greatest effect on compliance. Whenever a case is referred for possible
criminal investigation HM Revenue & Customs evaluate it against these
criteria, as well as considering the strength of available evidence and
likelihood of a successful investigation.
3.20 Tracking the progress of fraud investigations
allows managers to assess the overall workload
(such as whether investigations are concentrated
on the main types of fraud set out in the
Department’s strategy); identify problem areas
such as where progress is slower than would be
expected; understand the cost implications of
investigations and the effects on planning future
resource usage or the consequences of increasing
or decreasing resource levels (Figure 31).
Figure 31
Information to help managers track fraud
investigations
Useful information can include:
l number of investigations carried out;
l value of fraud loss identified;
l duration of individual investigations;
l costs of individual investigations;
l methods of investigations used;
l outcome of investigations (prosecutions; fines etc).
3.21 Where departments investigate frauds they
will need to consider whether there are sufficient
staff with the right technical and investigative
knowledge and experience. The Counter Fraud
Professional Accreditation Board was set up in
00 as a professional body for counter fraud
specialists. It sets professional conduct guidelines
for its members who have successfully completed
the specialist counter fraud training and university
courses. Figure 32 sets out the development of
a professional and ethical approach to countering
fraud by the NHS Counter Fraud Service.