NAO Good Practice Guide - Tackling external fraud - HM Treasury

4 Good practice in tackling external fraud | Detecting and investigating external fraud and imposing sanctions
3.41 Joint working arrangements can be set up
to share information and data, discuss issues
of common interest and carry out research
(Figure 40). Such arrangements can be covered
by a Memorandum of Understanding with the
other organisations setting out for example the
arrangements for sharing data and carrying out
matching and profiling with their data. The sharing
of data may be facilitated through data warehouses
accessible to the organisations involved. The
data warehouse can include data from each
organisation and from external sources such as
national insurance numbers, driving licences,
passport holders and electoral rolls. In a pilot
project, HM Revenue & Customs is using specialist
computer software to analyse various internal
and external information to help identify potential
ghosts (people who work in the hidden economy
and pay no tax on their earning) and moonlighters
(people who pay tax on certain earnings but fail to
declare other sources of income).
3.42 Joint working may also include co-operation
on fraud investigations. This enables departments
to identify and investigate cases of common
interest, avoiding duplication of effort. The
Welfare Reform Act 007 enables local authorities
to investigate suspected frauds on benefits
administered by the Department for Work and
Pensions. The Department also cooperates with
local authorities to identify and jointly investigate
cases. There are a number of factors that need to
be considered for effective joint working in fraud
investigations (Figure 41).
Figure 41
Good practice in joint working to
investigate external frauds
Aim to establish with the other organisations involved
in joint fraud investigations:
• common criteria for selecting which cases
to investigate;
• the time scales for investigations;
• agreed procedures for dealing with cases by either
the civil route or criminal prosecution;
• the different powers of the departments to
investigate and the sanctions that can be used.