Anne Ward Platt
Management Consultancy Director
Deputy Chair, Northumberland, Tyne and Wear NHS Foundation Trust
Anne specialises in the healthcare sector and writes on health and management issues. An experienced conciliator, she is the author of Conciliation in Healthcare: managing and resolving complaints and conflict. Anne has served as an audit committee chair in her role as a non-executive director in the NHS
While economists consider the salient features of a double-dip recession and politicians debate what to do about it, some aspects of life in the UK today are incontrovertible. Corporate belt-tightening is here to stay for the foreseeable future, and reducing wasteful and unnecessary expenditure is a national priority.
Unfortunately, running alongside the economic downturn is a rise in certain types of crime, including fraud. Pay freezes, job insecurity and fear of falling living standards can provide sufficient motivation for some people to commit fraud. Since investment in audit and internal governance procedures is often reduced as part of cost-cutting initiatives, it is not difficult to see how organisational weaknesses can be exploited. This applies as much to the NHS and other public-sector bodies as it does to private-sector businesses.
Last year it was estimated that the scale of fraud against the public sector amounted to around £25bn annually (£18bn of this relates to tax fraud and £7bn to public expenditure fraud).(1) In the NHS alone, it is estimated that £263m is lost each year, which could otherwise be used to the benefit of patient care.(1) Clearly, fraud is not a victimless crime. It affects us all and ultimately we all pay for it.
What exactly is fraud?
Fraud can be perpetrated by individuals from outside as well as within the health service, including those in positions of particular responsibility and trust. While the vast majority of staff are honest, successful prosecutions have been brought against chief executives and finance directors, as well as medical and nursing staff. In general practice, principals/partners and practice managers have been among those found guilty of fraudulent activity.
So how do you 'fraud-proof' your practice?
You can protect your practice from fraud by identifying and managing the fraud risks that relate to key aspects of practice activity. Reviewing these on a regular basis should be an integral part of your risk management processes. Do you feel that you currently have procedures in place to manage the following common fraud risks effectively?
Regular training for staff should help enforce the standards and procedures essential to the day-to-day activities that may be open to abuse, including: expenses/salary claims; time keeping and sickness/absence records; forms relating to the ordering of any goods or resources; and payment of invoices.
Clearly, any document with a financial implication for the practice should be completed meticulously in accordance with the practice's guidance. But the existence of procedures alone is not sufficient. They must be properly implemented and appropriate checks made to ensure compliance by staff at all levels, irrespective of seniority. Case Study 3 in Box 2 illustrates the risks practices are exposed to when a member of staff is regarded as being 'exempt' from following required processes or is able to evade detection by a less-than-rigorous approach to auditing.
The Serious Fraud Office highlights the importance of recognising certain types of behaviour, or certain situations, which may put an organisation at increased risk of fraud.(2) These 'red flags' should alert you to the possibility that there may be a problem, particularly if several of them are apparent together. They include:
Behaviours that may also be suspect, especially when combined with other causes for concern, include the following:
Ensuring the security of the practice premises and related assets will already be one of your main priorities. But staff also need to be aware of the importance of IT security – not only to protect the confidentiality of staff and patient data, but also to reduce the possibility that such information could be used fraudulently. Information security is a key risk area, requiring robust management.(3)
Be aware, too, that fraudsters can be ingenious and plausible. A recent scam aimed at general practices involved the promotion of bogus 'guidance' costing several hundred pounds to support Care Quality Commission (CQC) registration. Warnings have been issued to prevent practices from being exploited by any other scams relating to CQC compliance.
Bribery Act 2010
As well as raising awareness in relation to potential fraud in your practice, staff should also be aware of the implications arising from the Bribery Act 2010, which came into force on 1 July 2011.(4) This is intended to prevent corrupt behaviour where someone is influenced by a monetary bribe or other kind of benefit to the advantage of another person or organisation.
You will need to ensure you have adequate procedures in place to prevent bribery, since the act introduces new offences relating to both individuals and organisations. As well as familiarising yourself with the guidance accompanying the act, you will find it helpful if you:
Headline news is made by serious frauds often involving many thousands of pounds, but the costs of seemingly 'low level' frauds can mount up if individuals regularly believe they are entitled to inflate the number of hours worked or number of miles travelled.
It is only a small minority who engage in fraudulent or corrupt behaviour, but their actions divert precious resources from an already stretched healthcare sector. By encouraging fraud awareness in your practice you can help to ensure that NHS funds benefit the honest majority and that opportunities for fraudsters are significantly diminished.
Leads on the provision of counter-fraud services for the NHS in England and Wales and security management services
NHS Fraud and Corruption Reporting Line: 08000 28 40 60
Deterrence and Engagement Unit: 020 7895 4500
Online fraud reporting form available at:
NHS Scotland Counter Fraud Services
Online fraud reporting at:
Fraud hotline for NHS Scotland: 08000 15 16 28
All information is treated confidentially by the above organisations, and may be given anonymously.