Using Data Warehousing to Fight Fraud in Local Authorities

Subtitle: If only Local Government knew what Local Government knows
Abstract: Individual departments within local authorities hold extensive amounts of data that are typically not made available to other departments within the same authority. Current legislation allows cross-departmental access to that data for the purposes of preventing and detecting fraud. Yet few authorities have taken the step of using the latest data warehousing technology to make this wealth of information available to its officers responsible for verifying claimant details, nor to its investigators tasked with identifying and eradicating existing fraud.
In 1998 the National Housing Benefit Accuracy Review estimated combined losses from fraud and error amounted to some £840M per annum. The Audit Commission’s 1999 update to its Fraud and Lodging report contains a strong theme that members should pay a key role in putting fraud prevention and deterrence high on the agenda, without backing away from investigation and prosecution where appropriate.
Particular concern has been expressed by audit evidence that member or officer fraud has been detected recently in around 25% of authorities visited. Whilst fortunately the absolute number of cases is relatively low (with 638 of the cases in 1997/98 being committed by council employees or elected members), officer fraud is more likely to be systematic and of higher value.
Negative comments from the public and local press have started to increase, seeking to focus on authorities’ lack of commitment to the fight against fraudulent loss of taxpayers’ money. This is even more embarrassing for authorities concerned when it is shown that information showing the fraud was already known to the authority and was held on its computer systems (e.g. that a benefit claimant was employed by the authority, or had supplied different personal information to the separate departments), but that the relevant staff were not able to access that data to prevent fraud. As the saying goes – "if only Local Government knew what Local Government knows".
Yet the technology to make such data available exists already, and with the reduced costs of systems built around Microsoft’s Windows NT operating system and SQLServer database, can be acquired relatively cheaply (and typically more cheaply than expensive upgrades to operational systems in individual departments). Such systems allow adoption of the data matching that the recent reports highlight as delivering powerful results in fraud detection.
Radius has an excellent, 17 year, track record in developing, supplying and supporting computer systems for UK Councils, with over 200 councils as current customers. Radius has combined its extensive understanding and experience of local authority operations, with the latest database and searching technology from Microsoft, to provide such data matching as standard in its unique portfolio of best-of-breed fraud avoidance, detection and management systems.
Based on a low-cost Windows NT server, Radius’ LGWarehouse forms a data warehousing repository for data collected from all an authority’s systems, be they legacy mainframe or open systems, bringing together on a single SQL Server database data from systems that may include:
  • Housing benefit
  • Council tax
  • Lettings
  • NNDR
  • Electoral roll
Renovation grants
Residents parking
Personnel/payroll
Taxi driver licensing
This data is then available, subject to strict security access, either to authorised staff for the purposes of verification of new claims or, for instance by fraud investigation staff or audit staff, to undertake on-line checks against all this data within the authority.
Verification Framework
RadiusVICS (Verification Information Checking System) is Radius’ comprehensive verification product built specifically to extend the concepts of data matching into a system which is fully compliant with the needs of the Verification Framework laid down by the DSS. Built to true Windows standards around an industrial-strength SQLServer database, RadiusVICS holds all details relating to claims, assigning risk levels and deriving priorities, whilst providing comprehensive facilities for viewing and comparing discrepancies in data.
Auto-scheduling of in-claim visits and postal checks are also key essential elements that enable RadiusVICS to mirror the strategy of continuing claimant information checks throughout the life of a benefit claim. Full audit trails and statistical analysis/reporting tools complete the compliance requirement laid down by the DSS. RadiusVICS ensures that procedures and actions are followed and carried through, whilst providing authorities the ability to identify potential risks.
But more importantly such technology can deliver all the relevant information directly to the desktop of officers responsible for the verification of claims, giving on-line access to their authority’s data (not just housing benefit data) for the purposes of data matching at the time of verification (not hours or days later). Access to LGWarehouse enables verification staff to complete enquiries of authority data such as rent accounts, electoral roll, council tax and lettings on-line, rather than waiting hours (or even days) for an ‘off-line’ response from staff in other departments.
Fraud Detection and Management
The real power of a LGWarehouse is unleashed in the investigation of existing fraud.
RadiusFDMS (Fraud Detection and Management System) allows fraud investigation officers to work on ‘hunches’, enabling them to use their skill and knowledge to seek out possible fraudulent activities. Officers are firstly able to scan across the data in all systems; to ‘browse’ the data for irregularities based either on their experience or special projects. Secondly, standard queries or ‘rovers’ can be set off to trawl through the datawarehouse ‘sniffing out’ data that on its own may be innocent, but when compared with data from another departmental source, is suspicious and may need investigation.
Once a discrepancy is identified, RadiusFDMS’ case management facilities are used to initiate and document progress in the investigation (e.g. visit reports, investigation notes, etc.). But the data matching doesn’t finish there. All case information itself remains on the database and is also made available for searching. For instance, using the free text searching facilities of SQL Server, either to look for related cases or to enable an investigator, possibly years in the future, to access relevant historic data to assist in other investigations.
RadiusFDMS has been developed to give LG fraud investigators and/or auditors access to the high technology tools already available to other organisations (e.g. criminal investigators) to identify and investigate potential fraud. Whilst inevitably the focus of investigation will be on benefit fraud, RadiusFDMS will also handle all types of fraud that can be found on the public sector, the only limitation on investigation being the amount and quality of data that can be drawn from existing computer systems into the LGWarehouse.
Is there an alternative?
Historically, most local authorities have regretfully not been prepared to invest in the latest technology for verification and investigations departments. Where systems have been installed they have typically addressed only a small part of the requirement, e.g. automating letter production or storing document images, without delivering on the true potential of high technology in the fight against fraud.
The availability of Microsoft technology now makes the provision of a comprehensive anti-fraud system a cost-effective reality. Indeed, in a commercial environment, such systems are regarded as absolutely essential.
At the last IRRV National Benefits Conference, Stephen Timms, the Fraud Minister, made it clear that the strategy must be to get it right, put it right and keep it right. Is there an alternative? - no - to fight fraud effectively and efficiently there is no alternative to the use of such high powered tools. The only remaining question is how long are authorities going to pretend that they are doing their best to fight fraud, whilst tying the hands of their staff tasked with the job at a working level?
The author
In the 1980’s Phil Benton was responsible for the provision of high technology systems to UK and North American police forces, and the development of the first open systems version of HOLMES for police major enquiries. Since 1989 he has been responsible for public sector systems within the Radius Group, and is now Managing Director of Radius Computer Services Ltd.