The claim for a start-up business grant was received by the council from a firm in Doncaster, a meeting heard.
But an audit investigation then revealed that bank statements which had been submitted to support the application were false, while invoices for the start-up costs sent by the applicant, who was not identified, were also bogus.
The claim was not granted and the applicant absconded.
The incident was revealed in the council’s annual fraud report for the year 2015-16.
Colin Earl, Head of Internal Audit, told Doncaster Council’s audit committee that the number of fraud cases the authority was involved in is low.
“I do think it’s a positive picture.
“The incidence of fraud remains very low in overall terms, taking into account the council’s activities and the fact we employ over 9,000 people.
“It is impossible to stop fraud from occurring due to its covert nature, but the council has a zero-tolerance approach to it.”
The council reduces the risk of fraud through a series of controls.
Mr Earl added that ‘significant amounts of time and resources’ had been invested over the last year into fraud awareness training for senior managers, key employees and councillors.
He said the training is expected to be available online by this December.
Further awareness sessions are planned for the next year to ensure all councillors are aware of any threats.
In the report, cyber fraud was highlighted as a ‘significant emerging risk’.
In order to tackle the threat, the council has developed a Cyber Security Incident Response plan.
Mr Earl added he was encouraging staff and the public to speak to the council’s internal audit team if they had concerns about fraud.
Call 01302 862931 for more information.