National Fraud Initiative (NFI)

Cheshire East Council, like all other local authorities, is required by law to protect the public funds it administers and to ensure that they are used effectively and economically in the delivery of services.  It may share information provided to it with other bodies responsible for auditing or administering public funds, in order to prevent and detect overpayments, errors and fraud.

Every two years the Audit Commission carries out a national data matching exercise in local authorities known as the National Fraud Initiative (NFI).  The original purpose of the exercise was to detect benefit fraud and although this remains a major objective the scope of the exercise has extended to include other areas of local authority expenditure.

These exercises have been very successful and the Audit Commission estimates that in 2006 around £140 million of fraud and overpayment was detected and that since 1996, when NFI data matching began, the cumulative figure is over £450 million.  This large sum of money would otherwise not have been available for service delivery.

Data matching involves comparing electronic data held by one body against other computer records held by the same or another body to identify any inconsistencies that require further investigation.  For example, these inconsistencies may indicate persons who are not receiving the correct amount of benefits; overpayments of care charges or pensions in respect of deceased persons; duplicate payments to trade creditors; fraudulent insurance claims; or just errors in recording personal data such as dates of birth or national insurance numbers.

The Serious Crime Act 2007 gives the Audit Commission new statutory powers to conduct data matching exercises by inserting a new Part 2A into the Audit Commission Act 1998. It does not require the consent of the individuals concerned under the Data Protection Act 1998.

The Audit Commission, together with the Information Commissioner, have issued a Code of Data Matching Practice which all NFI participants are expected to follow.
Further information on The Code of Data Matching Practice.

When data is submitted to the Audit Commission it will not be sent by post or courier but it will be uploaded electronically to a secure password protected and encrypted NFI website.

The reports of the data matching are made available to relevant authorities on the same secure NFI website to which access is granted by the Key Contact who is nominated by the Responsible Financial Officer.  The reports only indicate inconsistencies that require examination and there is no presumption that any errors, fraud or overpayment have occurred until the investigations have been completed.

Further information about the National Fraud Initiative is available on the Audit Commission website.

If you require further information about NFI please contact us.