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Head of the National Audit Office Sir John Bourn has qualified the Northern Ireland National Insurance Fund Account for 2002-03 because of the estimated high level of benefit being lost through fraud and error. This is the third year running for which Sir John has qualified his opinion on the account.

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The Northern Ireland Department for Social Development, responsible for administering the contributions-based benefits paid to individuals, estimates that, for benefits paid in 2002-03, fraud and official error account for losses of some £53.2 million, including £39.3 million on Retirement Pensions and Bereavement Benefit. This represents some 4 per cent of total expenditure on benefits.

The Department for Social Development had carried out checks on the accuracy of a sample of awards of Retirement Pension and Bereavement Benefit, Incapacity Benefit and contribution based Jobseeker’s Allowance. From this, using statistical techniques, the Department were able to estimate the extent of losses in each benefit resulting from fraud and official error. The NAO reviewed a sample of cases examined by the Department and confirmed that these estimates were reasonable.

The Department has continued to implement the strategy it introduced in 2000-01 to prevent fraud and error from entering the system, to detect and eliminate fraud and error already present, to take corrective action promptly, and to apply sanctions to deliberate offenders. The strategy was reviewed in 2002-03 and plans are in place to implement the recommendations arising from it.

"I have qualified this account because of high levels of estimated fraud and official error in the payment of benefits from the Northern Ireland National Insurance Fund. I note the measures being taken by the Department to reduce fraud and error, and will review progress as part of my audit of the 2003-04 account to see whether the desired outcomes are being achieved."

Sir John


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