Source · Select Committees · Public Accounts Committee
Recommendation 11
11
The Counter Fraud Function undertook a Global Fraud Risk Assessment across 206 COVID-19 response schemes,...
Conclusion
The Counter Fraud Function undertook a Global Fraud Risk Assessment across 206 COVID-19 response schemes, with an estimated total value of £387 billion. It risk-assessed 16 of these schemes as having a high or very high fraud risk, representing 57% (£219 billion) of the £387 billion.31 As part of this Global Fraud Risk Assessment, the Counter Fraud Function identified four COVID-19 response schemes as having the highest risk of fraud and error: a) Universal Credit, as DWP accepts that a doubling of the caseload and relaxing controls will lead to a further increase in fraud and error levels. There is uncertainty around exactly how much fraud and error will rise but NAO believes that the increase is likely to be substantial. b) Coronavirus Job Retention Scheme, as HMRC’s planning assumption estimated fraud and error losses of 5% to 10% of scheme expenditure. c) The Bounce Back Loan Scheme, as BEIS and the British Business Bank have estimated between 35% and 60% of the loans may not be repaid due to fraud or credit issues. d) Coronavirus Response Fund - Funding for the NHS: Procurement of medical equipment (including additional ventilators), as there is a high risk of fraud in procurement of personal protective equipment.
Government Response
Not Addressed
HM Government
Not Addressed
2: PAC conclusion: Government’s focus on the long-standing fraud and error risks it understands, risks large amounts of fraud and error being unidentified or untackled elsewhere. 2: PAC recommendation: HM Treasury and Cabinet Office should, within six months, work with all Departments to build on the existing Global Fraud Risk Assessment and identify and publish all the fraud and error risks to public money across government and commit to updating this publication annually. 2.1 The government agrees with the Committee’s recommendation. Target implementation date: February 2022 2.2 The Global Fraud Risk Assessment (GFRA) was created in response to COVID-19 using temporary funding and focuses on COVID-19 and economic recovery spending. The GCFF and departments will continue to build the GFRA throughout 2021-22. 2.3 While greater transparency is welcomed, publishing individual fraud and error risks could increase the overall risk of fraud. As such, the government will not publish fraud risks at this level of detail. However, if the GFRA continues, the GCFF will provide access to it across government (including to Finance leads) and update it annually. 2.4 It should be noted that accounting officers have responsibility for identifying and understanding their risks, including fraud. They assess their organisation’s exposure to fraud risk and provide the response that they consider is appropriate. Where an accounting officer assesses that there are material levels of fraud and error, the department must provide details within their annual report and accounts, explaining the level of fraud and error and the impact on the financial statements. Departments must also report levels of detected, prevented and recovered fraud to the Government’s Counter Fraud Function as well as consider doing so to the National Audit Office (NAO). 2.5 The government will increase transparency on the use of Fraud Risk Assessments across departments in future Fraud Landscape Reports. 8