Mark Cheeseman: Lessons Learnt from fighting fraud during the COVID-19 pandemic
In the recent months when day to day lives across the world have been dominated by the COVID-19 pandemic, thinking about fraud has not been at the top of many people's lists. The focus has been on:
- keeping people as safe as possible
- slowing the spread of the virus
- providing essential medical supplies to health services
- supporting economies, vulnerable communities and the individuals within them.
It has brought huge challenges, including how to keep services running, how to educate the next generation and considering how we should emerge from the pandemic in a manner that helps us deal with the other big issues of our age such as climate change.
One group that has had fraud at the top of their list is the fraudsters themselves. While the public sector has been working hard to create polices and services at a fast pace, those who commit fraud have seen this as an opportunity to take advantage. However the fraud threat public bodies are facing during the pandemic in this melting pot, and the subsequent recovery, is high even if other more immediate issues have been more pressing.
This has been a challenging time for those working across the public sector to find and fight fraud. Many public servants have had to adapt to new ways of working while also dealing with the personal individual burden of the pandemic itself.
In the UK, the counter fraud resource in government has been stretched. It has been providing people to help in frontline areas where there were capacity issues while also trying to deal with the increased threat from fraud, the need to reduce and remove up front controls to make sure services and support can be provided quickly and figuring out the best way to find and limit loss.
I am proud of what those working to fight fraud have achieved. I know that £10 million of potentially fraudulent payments have been stopped and recovered thanks to their actions. This means more public money can be recycled into the pandemic response and economic recovery. It also means that the equipment being used by those fighting the pandemic on the front line is much more likely to be what was paid for rather than a sub-standard substitute.
The experience of fighting fraud during a global pandemic is not one that we would have wanted but it has been a valuable one that has taught us a lot. I have outlined just a few of those lessons below.
A structure for fraud risk assessment
Since 2018 the UK have invested in creating a single standard for fraud risk assessments and alongside this a professional standard and training to meet this standard. We had 24 trained and qualified Fraud Risk Assessors by the time the pandemic hit.
During the pandemic this resource really showed its value. It enabled the team at the centre (in the Cabinet Office) to coordinate fraud risk assessments in all of the new areas of spending. Even where a public body was unable to prioritise a fraud risk assessment, the centre could reprioritise resources from elsewhere in government to make sure a fraud risk assessment was done.
As all of the fraud risk assessments were done under a common standard, this could then be brought together to show which the riskiest schemes were and where there were crossovers in risk.
This foundation enabled us to have clear and open conversations on the risks faced, and to develop countermeasures at pace. These counter measures stopped millions of pounds of fraud and irregular payments.
Understanding the environment and acting with common purpose
Dealing with a global pandemic with wide reaching, multi-faceted implications and consequences is not simple. When working with those leading programs, it is important that one takes the time to understand the context that the individuals and programs are operating in, the consequences of the program and thus the government's response (of any advice they give).
You can help them better and achieve more by doing this. It does not change the facts or the fraud threats but it does help you to understand what is achievable and what will have the most impact.
Having the conversation and having it with integrity
In the context of a wide ranging and challenging emergency, the easiest thing for a fraud expert to do is to move out of the way.
However, that is not the right thing to do. The right thing to do is to have the conversation and to communicate the threats and risks, and what can be done about them. The fraud risk assessments in the UK put us in a great position to have these conversations and to come from an informed point of view while having them. The work we had done to understand the bigger picture, and the challenges that our colleagues were facing, enabled us to do this in a constructive rather than a hostile way.
In emergency contexts, there is temptation is to change the scoring of risks or one's communication on the extent of the likely problems. It is critical that this does not happen. Underplaying the risks, the extent that fraud could take place and the impact it can not only undermine the integrity of the advice from counter fraud experts but it also gives the organisation a false sense of security.
Effective systems actually benefit from a bit of tension (done in the right way). It is the role of counter fraud experts to provide some of this tension by not playing down what is likely to happen on the fraud agenda even when there was limited appetite to hear it.
Post Event Reviews and getting money back
In emergency situations, payments need to be made quickly and often the upfront checks that can be done are limited. There can be a lot of talk of frictionless up-front controls but the reality is that some counter fraud controls inherently create friction and not using these increases the likelihood of fraud.
In my view in areas of emergency spending, we should make it normal that post event reviews are undertaken, and this should be planned in and acknowledged right from the start. Also part of emergency funding should be put to one side automatically for the assurance of this spending through post event reviews.
Another key learning has been that for these post event reviews to be effective, there needs to effective powers in place to enable public bodies to 'claw back' funding that has been paid incorrectly whether in fraud or error. Without this, post event assurance activity would be limited to identifying irregular spending rather than making an impact by getting some of it back.
In the UK, there are now widespread 'Post Event Assurance' programs underway on spending areas from the COVID-19 response. The purpose of these is to find and recover fraud and irregular payments.
Breaking out of our silos and sharing
It is all too easy to put our heads down and work hard in our silos when we are busy. However the most effective way for any team, and indeed any large organisation, to work is to look around for key skills and experience that can be brought in to help. By working together across government, we can access key skills quickly to reduce risk and take action at pace.
In the UK, our work on fraud risk assessment was an example of this. Rather than just ask every public body involved in the response to do a fraud risk assessment, we identified qualified fraud risk assessors across government and embedded them in key organisations. This got high quality skills and experience to critical points quickly (and at little effort for them) and meant that fraud risks were understood quickly, and counter measures put in place earlier than would otherwise have been the case.
As we move forward with the response to COVID-19, and the work to regenerate our economies that will follow it, fraud will increasingly go up on our list of priorities. It is more than likely that more and more cases of fraud will come to light which will show how those fraudsters took advantage of the public sector and taxpayers' money at a time when it was needed most.
It is important that we use this opportunity to learn and get better at finding and fighting fraud both for our current challenges and the future ones that will undoubtedly face. In a crisis every pound of taxpayers' money is precious and the more we can do to protect it against the criminals that would enrich themselves at the cost of governments (and the communities and individuals that they represent) the better we will get through the crises we face and recover afterwards.
Author: Mark Cheeseman