TheDepartment for Work and Pensionsis
losing money on its
anti-fraud detection systems, with those
systems costing more to run than the amount of fraud
detected,reports the National Audit Office(NAO).
In 2006-07, the NAO estimated that specific systems cost the
department £154m to operate, but they only identified an estimated
£106m of benefits which had been overpaid as a result of fraud.
The NAO said management information at the department needs
improving to enable it to assess the cost effectiveness of
different anti-fraud approaches. The department is still unable to
assess fully the costs and benefits of its different counter-fraud
initiatives, said the NAO.
The NAO said the department's data-matching system was more
cost-effective in catching fraudsters and detecting overpayments
than the snitching hotline set up for the public to use, and which
is heavily advertised on TV.
The department hopes to improve case management with its new IT
system,
Fraims, but this has been delayed and full roll out is now not
expected until March 2008, said the NAO.
Preventing fraud from entering the benefits system in the first
place is a key element of the department's counter-fraud strategy.
It is piloting new technologies such as voice-risk analysis, in
addition to data-matching techniques.
Sir John Bourn, head of the National Audit Office, said, "The
department's specific counter-fraud activities cost £154m during
2006-07 and identified £106m of overpaid benefits.
"Although some of the Department's initiatives lead to earlier
interception of overpayments and may deter potential fraudsters, I
believe the Department could do more to determine whether its
activities are cost effective."