The value of counter fraud

by Matthew Jordan-Boyd

18 November 2019

With fraud under the spotlight as part of International Fraud Awareness Week, what does counter fraud mean for the NHS finance professional?

This week is International Fraud Awareness Week (IFAW), which provides a good opportunity to focus on the impact that fraud has on the NHS. It is also a chance to underline the benefit of counter fraud work ensuring that scarce resources reach their intended destination on the frontline of healthcare.

IFAW – hot on the heels of Charity Fraud Awareness Week, which was the subject of a separate recent HFMA blog – started in the United States as a campaign targeting business leaders and employees. However it is now marked by hundreds of public and private sector organisations around the world.

This year, the NHS Counter Fraud Authority (NHSCFA) has developed new campaign resources to help NHS organisations take part in IFAW, and we have encouraged all NHS finance directors to support the campaign.

Having worked in senior finance roles for various NHS bodies since 2001, I understand the scale of the challenge we face as healthcare finance professionals. Delivering the best possible services and achieving the best possible outcomes for patients within available resources is a hugely complex task. Therefore, it is imperative for us to ensure that much needed resources are not lost to fraud.

Fraud affects value on quite a basic level. When fraudsters target the NHS and succeed, this reduces the amount of resources available to deliver care. We estimate the impact of fraud on the NHS at £1.27bn a year, and we know that losses to organisations falling victim of fraud often run into the hundreds of thousands of pounds.

A few years ago, a trust lost over £1.2m overnight after a payment to suppliers was diverted in a mandate fraud. Unfortunately, this was not a one-off incident, attempts to defraud the NHS happen every day.

At a time when financial challenges and deficits are all too commonplace, it is imperative that we as finance professionals within the NHS are aware of the significant financial impact that the effective countering of fraud can deliver across all areas of the NHS (see What does a good counter fraud service look like?). It will be obvious to many that reducing fraud means increasing the amount of resources available for patient care.

Being aware of the threat of fraud and prepared to find the fraud losses your organisation is exposed to are crucial first steps in stopping those losses and preventing further resources being lost to fraud in the future. There have been many examples of fraud losses successfully recovered by the NHS following Proceeds of Crime Act proceedings (including funds lost in the mandate fraud I mentioned above).

Significant financial benefits can be realised through fraud prevention as well as through loss reduction when a fraud is identified and stopped. There are also more intangible benefits to increased fraud awareness and a proactive attitude to dealing with fraud, including positive effects on staff morale and organisational reputation.

I am not saying, of course, that counter fraud is the panacea for all finance issues in the NHS. However, at the NHSCFA we are keen to highlight the impact of counter fraud work on value in a clear, measurable way. And we plan to focus more on this in the future. IFAW provides a great opportunity to have this conversation within our organisations and wider professional networks.

Over the coming months and leading into the next NHSCFA three-year strategy, we will continue to offer advice and guidance regarding both new and existing fraud risks. We will also provide benchmarking information to directors of finance and audit committees to help organisations assess their internal response to fraud and the impact it delivers. We are also thinking about how we can better work with NHS organisations as partners so we can demonstrate the value of effective counter fraud work.

Value is of course a central theme of the HFMA annual conference next month, and I look forward to seeing as many of you as possible there. I would love to hear about how you have marked IFAW within your team and organisation.