Source · Select Committees · Public Accounts Committee
Recommendation 34
34
The Department cannot currently demonstrate that its approach to fraud and error within child maintenance...
Conclusion
The Department cannot currently demonstrate that its approach to fraud and error within child maintenance is proportionate as it has not assessed the risk or level of actual fraud and customer error within child maintenance as would be required if it was public expenditure.77 The Department reassured us that, despite this, it does not treat tackling child maintenance fraud (where children often suffer as the end user) with any less enthusiasm than it does tackling fraud against the taxpayer. It told us that it “will look at what more we can do” to tackle child maintenance fraud.78 The Department has already consulted on some legislative changes to the way that child maintenance is calculated, including taking into account certain types of unearned income that it can pick-up readily from HMRC (so a ‘variation request’ from the receiving parent will not be required).79 It also told us that “data analytics is another source where we can potentially do more”, including making better use of intelligence sharing across government.80 Cost savings and transformation
Government Response
Not Addressed
HM Government
Not Addressed
4. PAC conclusion: The Department has not taken responsibility for detecting child maintenance fraud, instead shifting this responsibility onto its customers. 4. PAC recommendation: The Department should take responsibility for managing the overall level of fraud and error in statutory child maintenance payments. It should: • Assess the risk of fraud and error within child maintenance on an ongoing basis; • Strengthen its controls proportionately in response to issues identified in its assessment of the risk of fraud and error; Make better use of available data to strengthen existing controls, for example from departments outside of HMRC; and • Publish, as part of its annual report on accounts for the Child Maintenance scheme, an annual fraud and error estimate, and target rate, to enable Parliament and the public to monitor its performance 4.1 The government disagrees with the Committee’s recommendation. 4.2 The department already has proportionate and cost-effective controls, such as: • a dedicated Financial Investigation Unit • use of verified income from HMRC and benefit systems • use of child benefit systems to verify qualifying child(ren) • procedures and policy to request additional verification • a robust mandatory consideration and appeals process. 4.3 The department recognises the potential for different types of fraud to be committed within CMS and therefore has a fraud strategy in place. Annex 4.9 of Managing Public Money and the Cabinet Office Government Functional Standard for Counter Fraud applies to misreporting of income on CMS. This underpins CMS’ strategy to preventing fraud, which focuses on developing and promoting an anti-fraud culture. 4.4 The department continually reviews its fraud strategy to ensure proportionate controls are maintained. Enhancements are currently being made; it has already consulted on legislative changes to enable the child maintenance calculation to automatically include unearned income, which further reduces risks relating to those who commit fraud by not disclosing their real level of earnings. The department will use risk profiling and threat scanning to target fraud as it enters the child maintenance system, alongside responding to customer instigated investigations. 4.5 The CMS’ main objective is securing maintenance for children between parents. Intrusive investigation or sanction to a paying parent can result in the complete breakdown of maintenance payments, impacting the welfare of the child(ren).