Public sector fraud on the increase, says PwC
Financial crime is on the rise in public sector organisations in the Midlands, according to accountancy firm PwC. The firm said that cuts made as a result of last year's spending review have increased opportunities for fraud in the region.
Research by PwC revealed across the UK, 60 per cent of public sector organisations experienced fraud in the last 12 months, up from 52 per cent in 2009.
The profile of the typical public sector fraudster has also changed radically over this period, said PwC.
Internal fraudsters are now reported to be responsible for 53 per cent of detected economic crime, up from 39 per cent in 2009 and more common than external ones.
John Tracey, partner and forensic services specialist at PwC in the Midlands, said: "An increased focus on costs within organisations may be uncovering scams and frauds that have run for years, but the impact of spending cuts could also be playing a part as loyalty and employee engagement are tested by redundancy announcements and pay freezes.
"More opportunities for fraud are created as mid-office functions are stripped away and responsibility for auditing and authorising activity is spread more thinly. Public sector organisations in the Midlands would be wise to consider carefully the fraud risk threats that they face, not least in relation to major areas of spend including capital projects and significant outsourcing arrangements."
