The National Fraud Initiative

For no other reasons other than our ancestral Scottish heritage and the interest sparked by last week’s independence referendum, this week we decided to spend some wee effort researching the publications of Audit Scotland.

In doing so we came across a very interesting multi-year exercise called the National Fraud Initiative (the NFI).

As Audit Scotland notes:

The NFI works by using data matching to compare a range of information held on bodies’ systems to identify potential inconsistencies or circumstances that could indicate fraud or error which are called ‘matches’. A match does not automatically mean that there is a fraud or error and investigations are required to enable the correct conclusion to be drawn for each match. Bodies investigate these and record appropriate outcomes on a secure web application based on their investigations.

As to the size of the data set – in 2012 / 13:

Audit Scotland increased the number of bodies involved to 127, including a large further education college and a greater number of central government bodies. All data sets were mandated.

And the outcome in 2012 / 13:

In total 599 data sets were submitted for data matching. These returned 382,137 matches and of these, 62,172 were identified as recommended matches, being matches with a higher risk of fraud or error.

What struck us as we read through the literature wasnt the novelty of this exercise – for data matching of this kind has been around for over a decade.  Instead it was the fact that one rarely sees such an exercise publicised by other auditors general.  Why aren’t all auditors general doing such an exercise – if not just for the deterrence value?

Additionally it is rare in our experience for such a comprehensive examination to have been undertaken in a company.

Given that there are 127 bodies and, no doubt, 127 different systems that produce the data, the argument usually put forward by companies about disparate information sources starts to look weak.


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