Building the skills needed for combatting fraud in the public sector

Ralph Cockburn, Senior Counter Fraud Investigator Apprenticeship Tutor at Intelligencia Training discusses combatting fraud in the public sector through prevention skills.

Fraudsters are, if nothing else, ingenious. From the merchants of biblical times selling their illness-curing potions to today’s offerings of synthetic identity fraud, NFTs and QR Code Fraud.

What has remained consistent over time is that fraud depends upon the skills of people, the skills of both the person committing fraud and the skills of those tasked with investigating and preventing fraud from occurring. There is a strong argument that one of those groups of people has harnessed the power of technology and advanced their skills at a faster rate than the other. Now, a number of public sector organisations are reviewing their skills development strategies to ensure that we are better equipped to counter fraud effectively.

Technology and fraud

The internet has given individuals the power to engage in illegal activities without requiring physical proximity or access to the victim. Fraud can be conducted against any target from anywhere in the world without the perception of risk that once existed when exploiting people for financial gain. The lack of geographical boundaries and familiarity with a country, region, or its people and culture are all factors that allow fraudsters to rationalise their intended actions and seek out opportunities to violate positions of financial trust.

As technology has removed several restraints to those committing fraud, it is up to us as gatekeepers to ensure that we minimise the opportunities and develop our own skill sets to increase risk and reduce a fraudster’s ability to be effective.

The 2023 Fraud Indicator, produced by Crowe UK (Crowe) and the University of Portsmouth’s Centre for Cybercrime and Economic Crime, estimates private sector fraud losses to be £157.8 billion, public sector fraud losses to be £50.2 billion, and frauds committed directly against individuals to be around £8.3 billion, for a total of circa £219 billion. For perspective, we could fund another NHS for £180 billion a year.

Combatting public sector fraud is crucial

Combatting fraud in the public sector is crucial for several reasons. Firstly, fraudulent activities drain public funds, depriving government departments of resources that could otherwise be allocated to essential services like healthcare, education and infrastructure development. By combating fraud, government agencies can ensure taxpayer money is used more effectively and efficiently.

Secondly, fraud erodes public trust in government institutions and undermines confidence in the integrity of public services. When members of the public perceive that their tax contributions are being misused or stolen, they may become disillusioned with the government and potentially disengage. By addressing fraud, the government can demonstrate their commitment to transparency, accountability, and good governance, thereby preserving public trust. This is equally relevant at national and local levels.

Thirdly, fraudulent activities in the public sector can have far-reaching consequences beyond financial losses. For example, healthcare fraud ultimately may result in substandard patient care or compromised medical services, endangering the health and safety of individuals. Similarly, fraud in social welfare programmes may prevent vulnerable individuals from accessing the support they need. By detecting and preventing fraud, governments can mitigate the potential harm inflicted on the general public and broader communities.

Fourthly, fraud is a criminal offence that undermines the rule of law and the foundations of a democratic society. By enforcing laws against fraud and holding perpetrators accountable, governments uphold the principles of justice, fairness, and equality before the law. Additionally, prosecuting fraudsters deter others who may be tempted to engage in similar illegal activities.

Lastly, fraudulent activities in the public sector can have negative implications for the broader economy. For example, corruption and embezzlement can distort market mechanisms, inhibit investment, and stifle economic growth. By combatting fraud, governments create a more conducive environment for business development, investment, and innovation, thereby fostering economic stability and prosperity.

Priorities for combating fraud in the public sector

Combatting fraud in the public sector is essential for safeguarding public funds, preserving public trust, preventing harm to individuals and communities, upholding the rule of law, and promoting economic stability and growth. By combatting fraud effectively, governments can ensure the efficient and equitable delivery of public services and uphold the principles of accountability, transparency, and integrity in governance.

The success (or failure) in countering fraud comes from our ability to develop the required skills. From the perspective of a counter-fraud training organisation, the need for more effective defences against fraud in the UK public sector presents both challenges and opportunities.

As fraud and its financial impact increase, the pressure to build growing teams of investigators also grows. This is where competing pressures impact our ability to maximise effectiveness. Investigators require a range of knowledge specific to legislation, process, and governance, and an accurate understanding of that is essential. Yet, a knowledge-based understanding of a subject like fraud does not ensure an effective counter-fraud capability, as that requires skills and skills that take far longer to develop than knowledge.

The ability to apply the processes they understand within the correct scenario and with the support of the right legislation is essential to build an effective counter-fraud capability.

Our knowledge-heavy capacity-building focus, driven by a need to increase capability in a quickly evolving sector, has led to a shortfall in applying effective and trained skills that were arguably more of a focus before technological advancements. Applying soft skills within investigations, emotional intelligence, enhanced communication and engagement skills are essential to countering fraud, yet they require time.

As a collective, we need to emphasise the pressing need for better detection and recovery mechanisms within UK Government departments, as well as the importance of fostering partnerships and collaboration to enhance fraud prevention efforts, allowing for skills to be pooled and utilising cross-agency and sector, in the same way, that criminal groups share their own skills and capabilities to commit fraud more efficiently.

Partnerships and collaboration are essential components of any effective anti-fraud strategy, and our organisation advocates for developing partnerships between government departments, non-governmental organisations, and the private sector to enhance fraud prevention efforts. By sharing information and best practices, we can work together in combatting fraud and promote good governance practices.

Enhancing counter-fraud capability

The Level 4 Counter Fraud Apprenticeship offers several benefits to the public sector to enhance counter-fraud capability, including a specialised curriculum covering fraud prevention, detection, and investigation. The apprenticeship is focused on the effective development of relevant and contextualised skills underpinned by knowledge, ultimately ensuring the confidence and capability of investigators to apply themselves.

Apprenticeships are a route now recognised across the public sector for staff of all ages to focus on skills-led training and application. Knowledge alone limits our ability to effectively counter fraud within the public sector. Still, the opportunities to amplify our knowledge by developing skills and collaborating with others genuinely provide one of our best opportunities to counter fraud better. By investing in this apprenticeship, government departments can effectively cultivate a skilled workforce equipped to detect, prevent, and respond to fraudulent activities, contributing to government services’ overall integrity and accountability.

You can read more about the Level 4 Counter Fraud Investigator Apprenticeship at: https://www.intelligenciatraining.com/counter-fraud-investigator/