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Whitehall credit card abuse and payment fraud costs £4m

Fewer incidents but bigger losses

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Financial losses in UK government rose last year despite a decreased number of incidents, according to official Treasury figures.

Losses of £4.28m from 761 cases of internal fraud or theft were reported by 25 Whitehall departments during the year ending 31 march 2008. This compares to 1,067 cases costing £3.86m in the financial year 2006-2007.

The greatest financial harm, this year as before, was caused by payment fraud (over £2.9m in losses) and theft of assets (over £440k). One incident of payment fraud resulted in losses of more than £1m. Six other cases of payment fraud each led to haemorrhages of £100,000 or above from government coffers.

Unauthorised use of government-issued credit cards also proved to be a problem. In one case the misuse of government plastic by a senior manager resulted in losses of nearly £78,000 over a four year period. Thanks largely to this case total losses rose from £27,800 to £123,700.

On the plus side incidents of thefts (down from 403 last year to 308 in 2007-08) and personnel management related fraud (which decreased from 253 last year to 105 this years) both fell.

Auditors made a number of recommendations on how to clamp down on future frauds including improved monitoring of credit card usage, storing goods securely, monitoring of “staff with key responsibilities”.

The latest editions of HM Treasury's Annual Government Fraud Reports can be found here. ®

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