Source · Select Committees · Public Accounts Committee
Recommendation 25
25
Each government department has a responsibility to minimise fraud and error, put it right and...
Conclusion
Each government department has a responsibility to minimise fraud and error, put it right and report on it.70 HM Treasury told us it expects policy to be developed with fraud risk considered at the development and design stage.71 The NAO concluded that deterrence and prevention are often more cost-effective for tackling fraud and error than detection, correction and pursuit and that a cost-effective control environment, where the department is doing everything it reasonably can to minimise fraud and error, leads to the lowest level of fraud and error compatible with the policy intent.72 DWP told us one of its key lessons from the COVID-19 response was the importance of design in terms of trying to avoid fraud and error coming into the system in the first place.73
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. 11