AS MUCH as £1 billion of Welsh taxpayers' money could be lost every year as a result of fraudsters targeting the public sector.

A report by the Wales Audit Office (WAO) has said public sector organisations including councils, the Welsh NHS and the Welsh Government should be given more resources to be able to tackle fraud, and reduce the loss to the public purse.

It estimated between £100 million and £1 billion could be lost by the public sector in Wales as the result of fraud every year - but warned it is unknown how much fraud is not reported. The Association of Certified Fraud Examiners estimates that organisations generally lose five per cent of their annual revenues to fraud. Internationally this amounts to £60 trillion every year.


Examples of fraud targeting the public sector include false expenses claims, benefit fraud, cyber crime, grants not being spent on the projects they were intended for and providing false information on a planning application.

In his introduction to the report auditor general for Wales Adrian Crompton said: "Every pound stolen from the public sector means that there is less to spend on key services such as health, education and social services."

South Wales Argus:

Auditor general for Wales Adrian Crompton

With the number of cases linked to cyber crime increasing, the WAO also warned public sector organisations should work more collaboratively to stamp out fraud.

Mr Crompton added: “New fraud threats are continually emerging in Wales, as elsewhere across the UK and around the world.

"Fraudsters do not respect geographical boundaries and the ways in which fraud is committed are constantly evolving as society and technology changes – this is becoming ever more apparent in today’s digital age.

"It’s therefore vital that collaboration and the sharing of intelligence and good practice in tackling fraud takes place between public, private and third-sector bodies across Wales, the UK and internationally.

"At a time of continuing austerity, I think it is more important than ever for all public bodies in Wales to seek to minimise the risk of losses through fraud.

"Organisations must prioritise fraud prevention and can help mitigate the risks of fraud by having the right organisational culture supported by effective counter-fraud arrangements.”

The report also outlines how Wales' public sector deals with the issue - saying the Welsh NHS puts a significant amount of resources into stopping fraud, but the Welsh Government prioritises reacting to cases rather than preventing them. Although approaches differ between councils, the report warned the establishment of a national fraud investigation team by the Department for Work and Pensions "significantly diluted the capacity for fraud prevention" in local government.