Departments must develop more reliable data on their levels of financial loss to fraud and error, according to Michael Whitehouse, chief operating officer at the National Audit Office (NAO).

Speaking last week at a conference on tackling fraud and error in the public sector, Whitehouse said the NAO does not support “the creation of generic estimates on fraud”, which could undermine accountability to Parliament. He warned that the comptroller and auditor general may qualify departmental accounts where fraud estimates are presented as reliable figures without robust, auditable evidence to support them.

Whitehouse said that tackling fraud and error is a serious concern for the NAO, but departments must use realistic figures for fraud losses so they can “ensure that approach and resources applied are proportionate to the risk faced and level of public funds compromised as a result.”

From next month, departments will be required to record and report quarterly data on fraud, error and uncollected debt. Baseline figures have already been supplied in the revamped business plans, published last month. Cabinet Office Minister Francis Maude, also speaking at the conference, said these figures have shown “how much more we need to do”. One department, he said, had recorded ‘nil response’ to indicate it had not been victim to any fraud in 2009-10. “That’s very, very good news,” said Maude, “but somehow hints a little at complacency.”

Maude outlined the recommendations of an interim report by the cross-government Counter Fraud Task Force, established last year. These included greater collaboration and data sharing between all parts of the public sector; better measurement of risk and losses associated with fraud and error; a focus on prevention and up-front detection; and the enforcement of a ‘zero tolerance’ approach to loss through fraud and error.

Maude also outlined details of four pilot projects, two in HM Revenue & Customs, and one each in the transport and work & pensions departments, said to have saved £12m in their first six months.

The task force will now work towards final recommendations by the end of 2011, and look at the issues of error and uncollected debt. The government “won’t hesitate to mandate specific action to tackle serious and harmful fraud threats,” said Maude.

You can watch videos from the conference online here.