Fraud and error cost the taxpayer billions of pounds each year – but most of the potential loss goes undetected. Based on the Public Sector Fraud Authority’s (PSFA) methodology, we estimate that fraud and error cost the taxpayer £55 billion to £81 billion in 2023-24. Only a fraction of this is detected and known about – enabling investigation and recovery.
Jump to downloadsThis report provides an introduction to the impact of fraud and error on public funds, how public bodies can tackle fraud and error, and the NAO’s examination of the topic. It is intended to support the Committee of Public Accounts, and Members across the House in their examination of how government manages fraud and error and some of the things it could do to improve.
The NAO is well placed to examine this topic. Through our audit of government accounts, we reach an opinion on whether expenditure is ‘regular’. This means considering whether money provided by Parliament is spent on the purposes intended by Parliament. The C&AG may also present a report with more detail on any irregular expenditure found.
This overview summarises the key information and insights from our work. It includes:
- what we mean by fraud and error, and how government is structured to tackle it
- the fraud and error risk management cycle
- fraud and error against government, including in benefits, taxes and COVID-19 fraud
- emerging threats and opportunities
- what to look out for when thinking about fraud and error