Consolidated accounts fraud case information: FOI release

Information requested

1) The Scottish Government's consolidated accounts state there were "a total of 75 cases of fraud and 11 cases of suspected or attempted fraud were recorded in addition to 1 case of error and 3 cases of third party grant fraud were reported". Could you provide further details on each instance, and in relation to the three cases of third party grant fraud, provide details in terms of how much was defrauded, the recipient, and the grant through which the fraud occurred?

2) Of the 75 cases of fraud and 11 cases of suspected or attempted fraud, could you provide details of amounts, through what means and whether they were referred to the police?

Response

This response provides some of the information you requested. While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because exemptions under the Freedom of Information (Scotland) 2002 Act section 35 Law Enforcement (a) the prevention or detection of crime, and section 35(c) the administration of justice, apply to that information. The reasons for the exemptions are explained further below.

35 Law Enforcement (a) the prevention or detection of crime

We are unable to disclose some details in relation to individual instances of fraud or suspect fraud because providing this information has the potential to undermine the effectiveness of counter fraud internal controls and processes which are in place to protect the security of public resources, and compromise measures in place to prevent future crime. This exemption is subject to the 'public interest test'. Taking account of all the circumstances of this case, we have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is some public interest in release in the interest of open and transparent government. However, this is outweighed by the public interest in protecting public resources.

35 Law Enforcement (c) the administration of justice

We are unable to disclose some information in relation to the referral of cases to law enforcement authorities as this may compromise ongoing investigations or legal proceedings. We recognise that there is some public interest in release in the interest of open and transparent government. However, this is outweighed by the public interest in that disclosure would be likely to prejudice substantially the administration of justice for these specific cases.

While we are unable to provide some details due to these exemptions, we have provided summary information below in an effort to be helpful and respond to your request as fully as possible. I can also explain that the Scottish Government does not hold some of the information you have requested because the information in the Scottish Government Consolidated Annual Accounts is collated from the bodies within the consolidation; the supporting detail is held by those bodies as indicated below. This is a formal notice under section 17(1) of FOISA that the Scottish Government does not have some of the information you have requested. However, you may wish to contact Scottish Public Pensions Agency, the Scottish Prison Service and the Student Awards Agency separately, who may be able to help you.

Cases of Fraud

1. 71 cases were reported from the Student Awards Agency Scotland, with the loss being £693,896, of which £359,171 is being recovered. Five cases were referred to the police. Further detail on these instances can be found with the Student Awards Agency Scotland. These cases covered;

1. Application Fraud (38) – false or misleading information in applications for funding, with the intent to obtain financial support to which the applicants were not entitled;
2. Facility Takeover (1) - unauthorised control of an existing account,
3. Misuse of Facility (25) - access to account used in a way that breached the agreed terms and conditions
4. Identity Theft (7) - unlawfully obtained and used another person's personal information for financial gain.

2. Two cases were reported within the Scottish Public Pensions Agency relating to a third party changing bank accounts. Further detail on these instances can be found with the Scottish Public Pensions Agency.

3. Two cases were reported within the Scottish Government, relating to 1) unusual spend on a card noted by Scottish Government and reported to the Bank and fully recovered (£98.35) and 2) funding used outwith the terms and conditions for which it was provided (£15,830.90), which is also in the process of being recovered. Neither or these were reported to the police.

Cases of suspected or attempted fraud

4. Three attempted/suspected fraud cases were reported for bodies within the set of information required for the consolidated accounts, but do not form part of the core Scottish Government. The accounts reflect results of all entities within the Scottish Government consolidation accounting boundary including the Executive Agencies mentioned above. Exemption 35 (c) (see above) applied to the detail for some of the information held by Scottish Government and some of the information is held with the agency themselves. However in summary these cases related to;

• unauthorised online access being attempted (no financial loss),
• potential false evidence provided (no financial loss), and
• contracted hours not worked (loss £1,616.75).

5. Five attempted/suspected fraud cases were reported for the Scottish Government. Exemption 35 (a) (see above) has been applied to one of these cases because sharing this information could compromise an investigation. Of the 4 remaining cases, one which involved an attempted payment through a compromised email account, was reported to the police. Further details on these 4 cases are:

1. a false submission to claim payments (no loss reported)
2. an attempted payment through a compromised email account (no loss reported),
3. an attempted fraud via a supplier email compromise (no loss reported)
4. a phishing attempt later found to not be a fraud

6. A further three attempted/suspected fraud cases related to research participation payments. These involved instances where research participants were suspected to not fulfil the inclusion criteria, were providing AI comments or were in some other way not legitimate. A total of £35 was lost and none of these were reported to the police.

Case of Error

7. One case of error was reported involving an application for capital works approved, that showed inaccuracies upon receipt of the capital claim. Penalties were applied, with future claims targeted for inspection.

Third Party Grants

8. Third party grant fraud cases are included in the reporting within the Annual Accounts to provide information on the risk of third party grant fraud to SG funds; they are not, however, frauds or suspected frauds which have led to loss or weaknesses in the SG. One of the three instances identified falls under exemption 35(c) below. The other two cases did not result in any loss to the Scottish Government.

• Case 1: under section 35(c) of FOISA we are unable to provide information about this case because disclosing details may impact on an active investigation
• Case 2: A case of suspected fraud was investigated and subsequently found not to be a fraud case.
• Case 3: A case of suspected fraud of a third party outside of the Scottish Government is under investigation, and the Scottish Government does not hold details of this. There was no loss to the Scottish Government.

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