Audit Scotland conducts a National Fraud Initiative (NFI) to assist in the prevention and detection of fraud. This is a data matching exercise and one of the ways in which Audit Scotland helps auditors to meet their responsibilities, including promoting economy, efficiency and effectiveness in the use of public money.
Data matching involves comparing sets of data, such as the payroll or benefits records of a body, against other records held by the same or another body. The data is usually personal information. The data matching allows potentially fraudulent claims and payments to be identified. Where a match is found it may indicate that there is an inconsistency which requires further investigation. No assumption can be made as to whether there is fraud, error or other explanation until an investigation is carried out.
The processing of data for NFI in Scotland is carried out by the Audit Commission, on Audit Scotland’s behalf, under the legal framework set out below. It does not require the consent of the individuals concerned under the Data Protection Act 1998.
All bodies participating in Audit Scotland’s NFI exercises receive a report of matches that they should investigate, so as to detect instances of fraud, over or under-payments and other errors, to take remedial action and update their records accordingly.
Since 2000, Audit Scotland’s National Fraud Initiative (NFI) has led to the detection of fraud and overpayments of around £58 million. Across the UK, since 1996, similar exercises undertaken by the Audit Commission have led to the detection of fraud and overpayments totalling in excess of £660 million.