Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Accepted
Confirm plans to embed Initial Fraud Impact Assessments into departmental spending approval processes.
Conclusion
Government has often failed to implement basic counter-fraud measures into its new initiatives. Government’s COVID-19 response highlighted the importance of designing counter-fraud measures, including controls, reporting and recovery, into new initiatives at an early stage of the policy cycle. Government could have maintained several basic standards of public accountability, even at the height of the COVID-19 emergency: more transparency; better management of conflicts of interest; promptness in addressing known fraud risks; and timely financial reporting. Some lessons learnt have already been put into practice, for example, in the case of government’s energy schemes where customers received discounted bills from the suppliers rather than direct cash payments from government. Government’s introduction of the Initial Fraud Impact Assessments (IFIAs) is a welcome development that will help public bodies address known vulnerabilities sooner. HM Treasury intends to embed the IFIAs into its spending approval processes. It has trained 700 of its staff on matters relating to fraud. Tackling fraud and corruption against government 7 Recommendation 4: HM Treasury should: a) confirm, in its Treasury Minute response, how it plans to embed Initial Fraud Impact Assessments (IFIAs) within its formal departmental spending approval processes; and the consequences for public bodies if they do not meet its expectations. b) work with departments, as part of its existing work to share best practice with departments, to help them use IFIAs to inform Accounting Officer Assessments and to ensure that a summary of the IFIAs, where they flag significant risks, is included in the published summary Accounting Officer Assessments sent to the Committee.
Government Response Summary
The government agrees and is implementing. The PSFA offers support and training for embedding Initial Fraud Impact Assessments (IFIAs). HM Treasury will update Accounting Officer Assessment guidance to reference the PSFA and advise AOs-in-training to use IFIA outcomes and explicitly set out fraud risk in summaries.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented The Fraud Risk Standard requires departments to embed IFIAs into their counter fraud processes. The PSFA offers targeted support to departments and public bodies in conducting IFIAs. The PSFA also offers Continuous Professional Development. A new IFIA training product will launch in November 2023. The current guidance on Accounting Officer Assessments, published in May 2023, already states that accounting officers (AOs) should consider fraud risks as part of the Propriety and Value for Money components of the AO assessment process and that the government’s Counter Fraud Function should be consulted where necessary. HMT intends to revise this to reference the PFSA when the guidance is next updated. Following the letter of support that PSFA submitted to all AO’s to ensure they were aware of their requirements, HMT will also advise AOs-in-training that the outcomes of any IFIA should be used to inform these aspects of their AO assessments and fraud risk should be explicitly set out in the summary AOA.