New guidance launched to prevent fraud in NHS procurement

The eight quick guides focus on specific fraud risks and provide practical information on control measures and prevention advice.

Published: 03/07/2019

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Today the NHSCFA is launching new guidance on procurement fraud – eight fraud prevention quick guides focusing on specific areas of fraud risk vulnerability in NHS finance and procurement.

Procurement accounts for a significant amount of NHS spend and activity, and procurement fraud is one of the NHSCFA’s priority action areas for the 2019-20 financial year. We estimate that the loss to the NHS from procurement fraud is £351m each year.

The new quick guides have been produced by the NHSCFA’s Fraud Prevention Unit following research with a range of stakeholders (including finance directors, heads of procurement and local counter fraud specialists in a number of NHS organisations) in 2018-19. This research enabled the NHSCFA to identify and target a number of fraud risk areas within the pre and post-contract stages of the procurement process.

The purpose of the quick guides is to alert staff to these fraud risks and to provide clear and practical information on effective control measures and preventative action. Each guide includes a brief overview of the fraud risk, along with information on how to spot fraud, how to stop it and how to report any suspicions of fraud.

Kevin Cane, Fraud Prevention Manager, said: “We have worked closely with our stakeholders in the development of these quick guides to prevent fraud in NHS procurement and protect precious taxpayer funds from fraud. Our intention in publishing the guides is to empower everyone in the NHS (particularly colleagues in procurement and finance teams) as well as suppliers to make an impact in preventing fraud.

“The benefits of implementing the guidance will be increased scrutiny, reduced fraud risks and the prevention of losses to the NHS”.

The quick guides

The new quick guides are being released as part of a national exercise on the prevention of procurement fraud, which the NHSCFA is undertaking with NHS provider organisations during the 2019-20 financial year (please see more details below). However, their content will be of interest to any NHS organisation as well as NHS suppliers.

Three of the fraud prevention quick guides cover the fraud risk areas which the national exercise focuses on:

  • Contract splitting (Disaggregate spend)
  • Contract reviews (Contract management)
  • Buying goods and services (Purchase Order vs. non-Purchase Order spend)

Two further quick guides have been designed to deal with good practice relating to:

  • Due diligence
  • Suppliers’ code of conduct: preventing fraud, bribery and corruption

The final three are designed to support staff in dealing with fraud risk management relating to:

  • Mandate fraud
  • Petty cash
  • Credit card fraud

The national exercise

The NHSCFA’s national exercise on the prevention of procurement fraud, which takes place in the 2019-20 financial year, focuses on three areas of fraud risk vulnerability: disaggregate spend, contract management, and Purchase Order vs. non-Purchase Order spend.

As part of the exercise the NHSCFA is collecting information from NHS provider organisations on each of these areas, to obtain a better picture of the level of scrutiny applied to spend at different stages of the procurement process (this phase of the exercise will conclude on 12 July).

The fraud prevention quick guides we are publishing today aim to have a positive impact on the fraud risk vulnerability areas covered in the national exercise (with three of the guides focusing specifically on those areas as explained above).

Measuring this impact will be the final stage in the exercise, which will take place at the end of 2019-20.

For more information about the national exercise and on the new fraud prevention quick guides, please email procurement@nhscfa.gsi.gov.uk.

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Fraud costs the NHS £1.27 billion each year.

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