Source · Select Committees · Public Accounts Committee
Recommendation 13
13
By February 2021, the Department had identified 76 fraudulent applications, 70 of which had resulted...
Conclusion
By February 2021, the Department had identified 76 fraudulent applications, 70 of which had resulted in awards. The Department estimated that up to £614,000 had been distributed to fraudulent applicants and had reported cases equivalent to £400,000 to the police. The remaining £214,000 were still under investigation. The Department estimated that fraud levels could be between 0.5% to 5% across all schemes by the time it has completed all post-award checks, a process it expected to complete in May 2021.45 The Department accepted that its decision to prioritise getting money to charities quickly to meet the extra demand cause by the pandemic increased the potential for fraudulent claims. It stated though that it also had an objective to ensure the money was “distributed in the right way” to try and prevent fraud.46 But it agreed with the Cabinet Office that a “risk mitigation approach” was sensible that allowed it to shift some of its usual upfront checks to post-award instead.47 It said that to-date it had detected fraudulent awards worth £624,000, a £10,000 increase from the value in February 2021, with most of these awards so far in the CCSF, in part as funds were paid out earlier than other schemes and checks on other schemes are ongoing. It explained that the total fraudulent awards were less than 0.5% of the total funds being distributed but there were still many post-award checks to be completed. The Department committed to doing “everything that we can” to recover the money according to the government’s usual approach to clawbacks.48 44 Public Accounts Committee, COVID 19: Bounce Back Loan Scheme, Thirty Third Report of Session 2019–21, HC 687, 16 December 2020 45 C&AG report, paras 1.25–1.26 46 Q87 47 Qq 87–88 48 Qq 88–90 14 COVID-19: Government Support for Charities 2 Understanding the impacts secured from the funding Evaluating the impact of the funding package
Government Response
Acknowledged
HM Government
Acknowledged
The government agrees with the Committee’s recommendation. Target implementation date: September 2021 3.2 As a result of the COVID-19 emergency and the need to meet tight deadlines to distribute funds safely, DCMS contracted external consultants to provide expert grant management. Consultancy services were procured in two phases and delivered under an output-based delivery model tied to key deliverables. Consultants worked alongside and under the instruction of experienced civil servants to provide operational support to the programme. Throughout both phases, weekly governance meetings were held to review scope, resourcing and progress in achieving the performance milestones and objectives set out in the contracts. PricewaterhouseCoopers have been judged to have met the relevant performance metrics at all stages. 3.3 It is difficult to determine how and when a similar approach would be applied in future given the specific national and far-reaching challenges presented to government in dealing with the COVID-19 pandemic. In line with the Cabinet Office guidance on consultancy and professional services spend controls, DCMS will continue to ensure that any proposal to engage professional services is thoroughly assessed on a case by case basis through its internal assurance process, including approval by the Commercial Director and through the Cabinet Office controls process as appropriate. 3.4 Post-event assurance on the DCMS elements of the charities’ financial support package is being conducted under a contracted service and is based on a sample-testing approach. As of 20 July 2021, 88% of the cases selected for testing were complete with no confirmed indications of fraud and/or error. Enquiries are still ongoing in relation to the remaining 12%. A determination of whether there has or has not been potential irregularity in those cases will be made once the inquiry is complete. The department expects to receive the report on post-event assurance by August 2021.