Fraud is up, says PwC

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Financial crime is on the rise in the public sector, according to a new report from PricewaterhouseCoopers.

The accountants and business advisers say 60 per cent of public sector organisations experienced fraud in the last twelve months, an increase from 52 per cent in 2009.

PwC says increased focus on costs within organisations may be uncovering scams and frauds that may have run for many years, but a deterioration in industrial relations is also playing a part as loyalty and employee engagement are eroded by redundancy announcements, pay freezes and inflation which is costing public sector staff £1,000 a year.

Yorkshire forensic accounting team director, Fran Marwood, said: “Spending cuts have created ill-will among public employees in some areas and, in others, more opportunities for government workers to cross the line.

“More opportunities for fraud are created as mid-office functions are stripped away and responsibility for auditing and authorising activity is spread more thinly.”