National Fraud Initiative Outcomes 2024-25 and Preparations 2026-27
Perth and Kinross Council · 21 September 2026
Back to Audit and Risk Committee — 21 September 2026 and its agenda
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Our vision is a Perth and Kinross where everyone can live life well, free from poverty and inequality ___________________________________________________________________ Committee or Board: Audit & Risk Committee Date of Meeting: 21 September 2026 Report Title: National Fraud Initiative Outcomes 2024/25 and Preparations 2026/27 Report Number: 26/257 Report Author: Jackie Clark, Chief Internal Auditor Organisational Lead: Strategic Lead – Legal and Governance ___________________________________________________________________ 1. Purpose 1.1 The purpose of this Report is to present the reported findings of the 2024/25 National Fraud Initiative (NFI) exercise. It also outlines the preparations currently underway in respect of the 2026/27 exercise. 1.2 Sections 1. Purpose 2. Recommendations 3. Background/Context 4. Progress Update 5. Outcome from Consultancy Work 6. Conclusion 7. Impact Value Assessment 8. Appendices 2. Recommendation It is recommended that the Audit and Risk Committee: 2.1 notes the outcomes as reported within the national Audit Scotland report of the National Fraud Initiative 2024/25; and 2.2 notes the work undertaken within the Council in preparation for the 2026/27 exercise. 2.3 approves the section of Audit Scotland’s self-appraisal checklist relating to those charged with governance at Appendix A.
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3. Background/Context 3.1 The National Fraud Initiative (NFI) constitutes a sophisticated data matching exercise matching electronic data within and between participating public bodies to assist in the prevention and detection of fraud. The Cabinet Office is responsible for the administration of the NFI in the UK. The NFI exercise in Scotland is Audit Scotland’s data matching exercise that runs every two years in line with the published timetable. The Cabinet Office processes the data for the NFI in Scotland on behalf of Audit Scotland. This 2022/23 exercise represents the eighth NFI data matching to be undertaken in Scotland. 3.2 The overall aims of the NFI are to serve the public interest by safeguarding public money against losses from fraud or misappropriation and to contribute towards the fight against fraud. It improves the use made of public resources by identifying anomalies in the data held by different authorities and by ensuring that these are highlighted for further investigation. Whilst it is designed to detect fraud, it may also identify instances of administration error or inaccurate data. 3.3 The NFI exercise helps participating bodies (such as Local Authorities, Police Scotland, Scottish Fire and Rescue and the other public sector bodies) to identify possible cases of fraud and detect and correct any consequential under or overpayments. The NFI also helps Auditors in assessing the Council’s arrangements for preventing, deterring and detecting fraud. 3.4 There are broadly three stages in the NFI process: 1. the submission of the required datasets by public authorities and other organisations; 2. the processing of the data (data matching) in order to identify anomalies; and 3. the investigation of the highlighted and reported anomalies 3.5 The Council is responsible for stages 1 and 3; processing of the data (stage 2) is carried out under arrangements put in place by the Cabinet Office. Reports on the Council’s involvement and responsibilities have previously been presented to the Audit & Risk Committee. More recently, a report highlighting the outcomes for Perth & Kinross was presented to the Audit & Risk Committee in June 2026 (report 26/200). 4. 2024/25 National Report 4.1 The “outcomes” arising directly from the 2024/25 investigations, as reported in Audit Scotland’s National Fraud Initiative in Scotland Report of August 2026, are £21.7m, which is broadly similar to the outcomes from the 2022/23 outcomes, which were £21.5 million. 4.2 The proportion of the figure attributable to Perth and Kinross Council is £131,236, as reported previously to Audit & Risk Committee (report 264/200).
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5. 2026/27 Preparations 5.1 Audit Scotland’s report provides a self-appraisal checklist which has been completed for 2024/25 and actions identified in order to improve arrangements are being taken forward. Part A of this checklist is entitled “for those charged with governance” and is attached at Appendix 1 for approval by the Audit & Risk Committee. 5.2 Internal Audit is currently liaising with relevant contacts within Services concerning 2026/27 requirements and will liaise with the Council’s external auditors in due course. As part of preparations, any learning from outcomes from previous NFI exercises will be considered. 5.3 It is anticipated for 2026/27 as in previous exercises, that additional datasets will be requested mid cycle e.g. Council Tax and Electoral Register data. 5.4 Data protection legislation requires that individuals whose personal information is to be provided for NFI purposes are informed. This is undertaken by the provision of privacy notices. Internal Audit will facilitate the processes whereby, where appropriate, data subjects are notified of the use of their personal data in the exercise for preventing and detecting fraud. 5.5 In addition, Internal Audit will support Services to ensure that the relevant datasets are submitted in accordance with the NFI timetable. 5.6 The proposed Council dataset submissions for 2026/27 are: Dataset Mandatory / Risk Based Privacy Notice required? Payroll Mandatory Yes Pensions (provided by Dundee City Council) Mandatory Yes Housing Tenants Mandatory Yes Housing Waiting Lists Mandatory Yes Licenses Mandatory Yes Blue badges resident parking (transport passes and permits) Mandatory Yes Trade Creditors (standing data) Mandatory No (not personal data) Trade Creditors (payments data) Mandatory No (Not personal data) Council Tax Mandatory Yes Council Tax Reduction Scheme Mandatory Yes Business Grants Mandatory No (not personal data) Personal Budget Mandatory Yes Private Supported Care Homes Mandatory Yes
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5.7 A further mandatory dataset is the Electoral Register, however the Committee has been informed previously that it is the opinion of the Strategic Lead for Legal and Governance that the Council is not permitted to share this information for the purposes of NFI. This opinion is being reviewed for the current exercise and any changes will be reported to the Committee. 5.8 A further update report will be presented to the Audit & Risk Committee in due course 6. Conclusion 6.1 Perth & Kinross Council takes seriously its obligations for taking part in the NFI exercise and the 2024/25 exercise is now fully complete. This report outlines the reported findings from the 2024/25 National Fraud Initiative exercise and the action being taken by Perth & Kinross Council in response to the requirements of the National Fraud Initiative for 2026/27. 7. Impact Value Assessment 7.1 This report has been classified as being an operational report and as such does not require a full Impact and Value Assessment. 8. Appendices 8.1 Appendix 1 - Part A of Audit Scotland’s Self-Assessment Checklist for those charged with governance