Countering Fraud Against the Department of Work and Pensions: A Case Study in Risk Management

• NCJ Number: 218871
• Journal: Crime Prevention & Community Safety: An International Journal Volume: 9 Issue: 2 Dated: April 2007 Pages: 74-91
• Author(s): Geoffrey Smith
• Date Published: April 2007
• Length: 18 pages
• Publication Format: Article
• Publication Type: Case Study
• Language: English
• Country: United Kingdom

Annotation

Using a case study of one major public sector organization, this study examined the effectiveness of using risk management approaches to counter fraud in the public sector.

Abstract

The main argument is that the risk management approach utilized by the Department of Work and Pensions (DWP) has been plagued with definitional problems regarding the concept of “fraud” and how it is countered and has essentially ended up with a diluted risk management approach that focuses perhaps too narrowly on customer compliance while ignoring other important risk management principles. The United Kingdom Treasury’s strategy to countering fraud is firmly rooted in a risk management approach and began with their 1997 report that required departments and their agencies to identify the nature and extent of fraud committed against them and organize a proactive strategy to counter it. In 2003, the Treasury put out another report providing a definition of what managing the risk of fraud encompassed, which included assessing the organization’s overall vulnerability to fraud and evaluating and responding to the fraud risk. By 2004, 73 percent of departments and agencies surveyed by the Treasury stated that they had anti-fraud policies in place. Indeed, the period between 1998 and 2006 experienced a dramatic change in the way fraud was investigated. Specifically, risk management principles were adopted within a strategic management framework in the hopes of establishing an accurate measure of fraud and measures to reduce it. Generally, identifying the risk of fraud took two forms: (1) the development of methodologies to estimate the extent of the problem, and (2) the use of intelligence techniques to inform strategies to counter fraud. The most immediate impact of this approach occurred in how allegations of fraud were evaluated and investigated. Figure, tables, references