The National Fraud Initiative (NFI) is coordinated by Audit Scotland every two years, and matches electronic data within and between bodies to detect and prevent fraud and error.  It found a total of £16.8m in outcomes, largely relating to the incorrect payment of council tax discounts, pensions, blue badges and housing benefits.

Audit Scotland said one of the most successful matches in terms of numbers and coverage was student funding to housing benefits, where local council data is compared against the Student Awards Agency for Scotland student funding data. As a result, councils stopped 168 housing benefits payments worth £300,000 to ineligible students. This is a reduction from the 302 payments worth £700,000 that were stopped as a result of NFI 2012/13.

The audit watchdog’s report includes nine detailed case studies of how comparing data across organisations can tackle fraud. In one, an NFI pension match identified a fraud in excess of £15,000 which had taken place for almost 13 years. The match was not a perfect match as a middle initial had been omitted in one of the individual’s records. It had previously been picked up by NFI on two separate occasions. Each time the pension officer sent out a life certificate for completion and both times the forms were returned duly completed, signed and witnessed.

The third time the match was identified through NFI, a more senior pension officer checked it and noticed that the witness signatures on the previous two life certificates were by the same person. As a cautionary measure, a stop was put on the pension and photographic evidence requested. No evidence was received. More investigations were undertaken and a death date of 2003 was identified. The case is now the subject of a police investigation.

Audit Scotland said there is strong evidence that most bodies take the NFI seriously by putting adequate arrangements in place, but found that almost half (41 per cent) of bodies need to follow up their matches more promptly.

In addition, only 31% of audit committees had reviewed the NFI 2014 report and carried out the self-assessment checklist contained within it.

Russell Frith, assistant auditor general, said: ‘The NFI Initiative makes a significant contribution to the security and transparency of public finances by checking that services are provided to the correct people and therefore helping to reduce fraud and error. It also acts as a powerful deterrent against persons who might be planning to commit fraud.

‘It's important that public bodies take full advantage of the support that the Initiative can provide to their detection work, and the increasing opportunities the technology creates for strengthening the fight against fraud.’

This was the fifth biennial exercise since 2006/07, and the total cumulative outcomes since NFI began now stand at £110.6m in Scotland, and £1.39bn across the UK.  The NFI 2014/15 involved 104 Scottish bodies across the central, local government and health sectors. Bodies submitted 585 data sets which generated 347,715 data matches for further investigation.

The NFI2014/15 report is here.