Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Departments do not make enough use of counter fraud expertise when designing new initiatives to...
Conclusion
Departments do not make enough use of counter fraud expertise when designing new initiatives to ensure they minimise losses to the taxpayer. One of the key lessons from government’s response to the pandemic is the need to balance speed of implementation and accessibility of support schemes with efforts to prevent fraud and protect taxpayers’ money. Despite it being two years since it was established, Cabinet Office’s work to increase the awareness of the new Counter Fraud Function is still at an early stage. Departments consulting it is still optional, meaning it lacks authority despite its expertise. BEIS, for example, did not consult the Counter Fraud Function when designing the Bounce Back Loan Scheme despite the increased risk Fraud and Error 7 of fraud and error compared to its usual operations. Designing schemes in a way that prevents fraud and error is essential if losses to the taxpayer are to be minimised. The Counter Fraud Function is working to introduce a minimum standard for fraud risk assessments across government. Transparency about these risk assessments is vital if decision makers, including Parliament, are to understand the implications of these design choices. Recommendation: HM Treasury and Cabinet Office should, within six months, introduce mandatory fraud impact assessments that require formal sign off from the Counter Fraud Function for all Government Major Project Portfolio programmes and for all other schemes that departments identify as having a moderate to high risk of fraud or error. A summary of these assessments should be published.
Government Response
Not Addressed
HM Government
Not Addressed
4: PAC conclusion: Departments do not make enough use of counter fraud expertise when designing new initiatives to ensure they minimise losses to the taxpayer. 4: PAC recommendation: HM Treasury and Cabinet Office should, within six months, introduce mandatory fraud impact assessments that require formal sign off from the Counter Fraud Function for all Government Major Project Portfolio programmes and for all other schemes that departments identify as having a moderate to high risk of fraud or error. A summary of these assessments should be published. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: February 2022 4.2 The Government Counter Fraud Function (GCFF) and HM Treasury agree Fraud Impact Assessments should be in place early in development for major spend initiatives, not restricted to Major Project Portfolio programmes. Guidance is being jointly developed for policy officials to increase the use of upfront Fraud Risk Assessments. The GCFF will work with the National Audit Office to design Fraud Impact Assessments, full implementation of this during 2022-23 is dependent on future funding. 4.3 A summary of major initiatives involved in this process will be published in future Fraud Landscape Reports. 4.4 The government has an agreed Standard on Fraud Risk Assessment - the first in the world. This provides a structure to assess and articulate risks of fraud and error within each spend area. The introduction of a Fraud Impact Assessment will be integrated into the Standard. Over time, Fraud Risk Assessments undertaken in government will be assessed against this standard. 4.5 In its next refresh, Managing Public Money (MPM) will be amended to make Fraud Risk Assessments mandatory for major projects. This will strengthen the accounting officer responsibilities for managing fraud risks, building on the explicit reference to government standards for Fraud Risk Assessment introduced into the MPM refresh published on 18 May 2021. 4.6 This will complement the requirement for accounting officers to complete Accounting Officer Assessments for projects and proposals in the Government Major Project Portfolio and to publish a summary of these assessments, which includes fraud risks regarded as appropriate by the accounting officer.