Recommendation 10

Each FMA exercise covers a specific area of spend and estimates the level of fraud and error in that spending. Since 2014, the FMA programme comprised 62 assessments covering £224 billion of spending. The GCFF’s Oversight Board concluded that 32 of the assessments, representing more than half (57%) of assessed expenditure, produced outcomes that are not reliable.27 When challenged on the value of the counter-fraud function, PSFA told us that the UK is the only country in the world to have a standard on fraud risk assessment. The standard means that all risk assessments across government are comparable and it is clear to what quality they are conducted. The technical advances were 16 Qq 50–51, 61 17 Qq 54, 61, 72 18 Q 44 19 Q 61 20 C&AG’s Report, para 2.5 21 Q 72 22 C&AG’s Report, para 1.17 and Figure 3 23 Q 58; C&AG’s Report, Figure 3 24 C&AG’s Report, para 1.16 25 C&AG Report, Figures 1 and 6; Fraud and error in the benefit system: financial year 2022 to 2023 estimates 26 C&AG’s Report, para 1.12–1.15 27 C&AG’s Report, para 1.15–1.16 12 Tackling fraud and corruption against government made possible through counter-fraud practitioners working as a function.28 PSFA told us that the reason all assessments conducted since the start of the COVID-19 pandemic were deemed to be unreliable was the scale and complexity of the schemes, which in tandem with the inherent difficulties associated with fraud measurement, resulted in shortcomings against the fraud measurement standard. For example, the Department of Health and Social Care’s assessment of the level of fraud in its procurement of PPE was not based on a fully random sample and could not be extrapolated.29 We asked PSFA about the reliability of the MoD’s estimate that 4.8% of its annual procurement spend is fraudulent. PSFA explained that MoD, in the absence of a random sampling exercise, had to rely on benchmarks from academic research, and therefore its estimate does not come with a high level of confidence. The most