North Somerset Primary Care Trust
Meeting of Audit Committee
To be held on: 7th May 2008
Local Counter Fraud Service
Annual Report 2007/2008
In accordance with the Secretary of State‟s Directions on Counter Fraud the role of the
Local Counter Fraud Specialist is to provide an Annual Report to the PCT on Counter
Fraud activity. This report presents the Audit Committee with an account of the Local
Counter Fraud Service‟s activities in 2007/2008 and describes how the PCT is working
with the LCFS in complying with Secretary of State‟s Directions.
Annex A, provides the PCT‟s position in relation to compliance with Secretary of
Annex B, gives the 2007/2008 work plan with details of the work planned and the days
2 Management Summary
During 2007/2008 North Somerset Primary Care Trust has continued to comply with
the Secretary of State‟s Directions in accordance with the standards contained in the
Counter Fraud and Corruption manual. The work of Counter fraud is fully supported by
the Board. The Fraud Steering Group has provided the executive support to provide a
strategic approach to countering fraud within the PCT and to drive the work plan
Progress has continued to be been made across most of the seven generic areas of
Counter fraud activity i.e.
Creating an anti fraud culture
The LCFS and North Somerset PCT have continued to maintain good communications
and close working with a determination to assist in the process of compliance with
Secretary of State‟s Directions on Counter Fraud. During this year the emphasis has
again been on the third and fourth of the generic areas (Prevention and Detection).
Our work on the prevention of fraud comprised a local proactive exercise concentrating
on ophthalmic service provision. This was fully completed for the PCT and no specific
instances of possible fraud were identified.
The preventative work also involved reviewing and updating the existing Counter Fraud
Policy in the light of current changes and ensuring that any „fraud alerts‟ or „fraud
notices‟ were communicated to the PCT to ensure that they had not been targeted and
recording any responses from this exercise
The work on detecting fraud was focussed on reviewing general ophthalmic
information to identify possible risks as well as maintaining relationships built with the
Human Resources Department, Risk Manager, Primary Care Lead and the
Work on the counter fraud culture continued to involve a number of activities including
providing newsletters, posters and the regular programme of presentations to PCT
staff as well as presentations at induction sessions.
In the 2007/2008 year the LCFSU received one referral for investigation. During the
year liaison has taken place together with the Human Resources Department and the
PCT‟s Risk and Communications managers. We would like to extend our thanks for the
commitment that the PCT and in particular the Director of Finance has shown to the
Local Counter Fraud specialist.
3 Progress with the Work plan in 2007/08
The increased expenditure on investigation days in the 07/08 year of 39.65 days
against planned days of 18.5 demonstrates clearly that it is difficult to predict the
resources necessary to undertake investigations and also demonstrates that if
investigations are not taken out of the annual work plan, then other areas of counter
fraud work suffer as a result, as days have to be resourced from elsewhere in the plan.
In the 07/08 year the investigation days were to the detriment of prevention and
detection work. It is for this reason that CFSMS recommend that the work plan days
are ring fenced to proactive work and investigation day‟s resources separately.
The PCT‟s Fraud Steering Group attended by the Director of Finance and the Chair of
the Audit Committee provides a strategic approach to countering fraud and monitors
the general progress of the work plan.
3.1 Creating an anti fraud culture
PCT staff throughout the year carried out 3 staff fraud awareness sessions attached to
mandatory training and 4 sessions as part of the induction process covering 71 staff.
The counter fraud newsletter „Counter Measures‟ continues to be circulated throughout
the PCT including health centres, clinics and GP surgeries and was published three
times in the 07/08 year.
As part of a new visiting initiative for primary care service providers all 35 Pharmacies
were visited in November 2007 as part of a local fraud awareness month. This included
delivering a pack of information including the LCFS newsletter, a reminder of the
Pharmacy reward scheme and some general guidance if there was a suspicion of a
forged or fraudulent prescription being presented. The majority of the pharmacies
expressed a positive response and requested further information.
The leaflets and posters on Counter Fraud used within the PCT were updated during
the year, to give local contact information as well as giving details on the national
Fraud and Corruption Reporting Line.
A fraud Assurance document has been devised by the LCFSU to highlight possible
areas at risk from fraud. This matrix contains the controls that already give assurance
in this area for the PCT and demonstrates where these controls may be weak or not
yet in place. This document will be used to link to the work plan to inform areas where
for 2008/2009 counter fraud work needs to be undertaken.
The LCFSU has put in place systems to carry out work with regard to Pharmaceutical
penalty charges which was a new piece of work in 2007/2008. This has produced
some further work where patients have been able to evidence that they did pay for
their prescriptions. This work is ongoing. The LCFSU has continued the work on
reviewing households where there were ten or more occupants registered on GP lists.
We furnish the PCSA with the replies so that they can contact the GPS concerned
where it is apparent that there are discrepancies in the lists so that they can check and
remove names accordingly.
The LCFSU continues to have a close working relationship with PCSA meeting
regularly with the PCSA manager. LCFS work in this area includes authorising the
circulation of prescription fraud alerts where patients are multi registering, obtaining
drugs irregularly, or where scripts or pads have gone missing. The LCFSU also
continues to work with PCSA on the ophthalmic PPV process being run by PCSA
chasing up non-responders. This has had some success with agreements to payback
funds where a mistaken exemption was claimed.
We continue to take part in a regional local focus group for LCFS to discuss issues and
ideas. Information from this meeting is fed into the South West Regional team of
All fraud warnings and alerts are formally monitored and circulated within the PCT to
check that they have not been the subject of the identified risks and that the PCT have
controls to reduce such risk in the future.
Fraud warnings and alerts are circulated within the PCT and monitored by the
Posters are on display within the PCT.
Information is distributed through the induction process.
Work in the area of ophthalmics was carried out in the year, with a quarterly review to
identify outliers. This information was shared with PCSA to allow them to better target
and focus their 2.5% post payment verification check resources. The outlier
information is also shared with the PCT‟s Risk Manager each quarter and there is now
a good working relationship between the LCFS and the Risk Manager through to the
Governance and Risk Committee.
A close relationship with Human Resources has been fostered by the LCFS to assist in
the process of detection and to create a climate of understanding of the roles involved.
The formal protocol in place since 2005/2006 continues to be reviewed and
demonstrates this working relationship and there is regular communication between
the two departments.
Only one referral was made for investigation in this year (following a referral from the
national fraud and corruption reporting line) regarding temporary residency and
persons from abroad. This has involved a lot of detailed work with both Primary and
Secondary care. The case has identified an area where there has been little or no
publicity either locally or nationally to enable any consistent understanding of both the
legislatory requirements and guidance provided to patients. As a direct result of this
investigation the LCFSU is working with the PCT and others in the area as well as the
LMC and Secondary Care providers to put on a seminar for GP practices to give some
guidance and provide a consistent approach across the area. This will help inform
anyone wishing to refer any further cases of this sort.
3.6 Applying Sanctions and Seeking Redress
The case referred in this year has not resulted in sanctions being applied or financial
redress being received as no evidence was found that indicated that fraud had actually
4 Use of Resources in 2007/2008
The work described above accounted for a total of 100.72 days against a plan of 100
days for the year.
5. Secretary of State’s Directions Grid
CFSMS Inspections at local Trusts have revealed that CFSMS expect this grid and a
comment on compliance to be included in every LCFS annual report. Annex A sets out
the grid with our comment on compliance at North Somerset PCT. This shows that the
PCT continues to ensure that it maintains compliance with and is fully aware of the
requirements of the Secretary of State‟s Directions on Counter Fraud.
6. Management of Counter Fraud Plan
Liaison meetings have been held with the Director of Finance during the year to
monitor and review the PCT‟s annual work plan and the LCFS has attended Audit
Committees to present reports.
The LCFS has supplied the CFSMS with statistical information as requested
throughout the year.
The staffing of the LCFSU is currently provided as 4.0 w.t.e, with three accredited
LCFS and 1 bank admin support person covering 7 client health bodies.
8. Training and Development
Throughout the year all LCFS have been required to maintain and enhance their
knowledge base and receive additional training. In particular the following training and
development has been undertaken and completed in the year.
The LCFS have attended the mandatory quarterly meetings organised by the SW
regional CFSMS team. These meetings provide briefing on new initiatives and
guidance from the centre as well as an opportunity to share best practice with
colleagues across the South West.
The LCFS have attended the regional local LCFS focus group meetings in order to
share information issues and best practice as well as to explore joint working.
The PCT‟s new LCFS joined the Unit in August 2007 has been trained and
9. Counter Fraud Liaison
Within the year liaison has been maintained to develop and enhance the Counter
Fraud arrangements for the benefit of the PCT.
Contact is achieved through the regional and national teams with specific cases
information being given at regional meetings and the national team issuing fraud
prevention notices, national proactive exercises and risk measurement exercises.
That the Audit Committee accept the Annual Report of the Local Counter Fraud
Services with regard to North Somerset PCT.
Local Counter Fraud Specialist
This grid demonstrates where the PCT is currently in complying with Secretary of States
Directions on Counter Fraud
SECRETARY OF STATE DIRECTIONS (November 2004)
Paragraph Instruction Action by PCT
2 (1) Each NHS body must take all necessary The PCT endeavours to comply with
steps to counter fraud in the NHS in this direction and has regard to the
accordance with these Directions and in document “Applying appropriate
accordance with- sanctions consistently” as well as any
The NHS Counter Fraud and Corruption advice and or guidance offered by the
Manual; and the policy statement “Applying CFSMS
appropriate sanctions consistently”
published by the CFSMS, and having regard
to guidance or advice issued by the CFSMS.
2 (2) Each NHS body must require its Chief The Chief Executive is kept abreast of
Executive and Director of Finance to monitor all counter fraud activity and the
and ensure compliance with these Director of Finance monitors
Directions. compliance with the Directions through
regular meetings with the LCFS and
progress and reports on activity are a
standard item on the Audit Committee
3 (1) Each NHS body must co-operate with the Access and the supply of information is
CFSMS to enable the CFSMS efficiently and agreed and all information is supplied
effectively carry out its counter fraud on request from either the LCFS or the
functions and in particular each NHS body CFSMS
must, subject to the following paragraphs of
Enable the CFSMS to have access to its
premises; put in place arrangements which
will enable the CFSMS to have access, as
appropriate to the NHS body‟s staff; and
supply such information including files and
other data (whether in electronic or manual
form) as the CFSMS may require
For the purposes of the CFSMS‟ counter
3 (2) In the case of information required under All requests are so
paragraph (1)(c) in connection with the actioned
CFSMS‟ responsibility for quality inspection,
fraud measurement, National Proactive
Exercises (NPEs) and fraud prevention
reviews, inspections and instructions, an
NHS body must respond to any request from
the CFSMS as soon as reasonably
3 (3) In the case of information required under All such requests are so actioned
paragraph(1) (c) for the purposes of
investigations relating to the CFSMS‟
counter fraud functions, an NHS body must
respond to a request as soon as reasonably
practicable and in any event within seven
days from the date the request was made.
3(4) Nothing paragraph 1(b) contravenes any Agreed
right a member of staff may otherwise have
to refuse to be interviewed.
3(5) Nothing in paragraph 1(c) or direction 7(f) Agreed
obliges or permits an NHS body to supply
information which is prohibited from
disclosure by or under any enactment, rule
of law or ruling of a court of competent
jurisdiction or is protected by the common
3(6) Without prejudice to the generality of Referred fraud cases are reported to
direction 2(1)(a), each NHS body must the Audit Committee and the question
comply with the requirements specified in of recovery is discussed with the
the NHS Counter Fraud and Corruption Director of Finance
The arrangements for reporting fraud cases
to the LCFS and to the NHS body‟s audit
committee and auditors; the arrangements
for agreeing to undertake a criminal
prosecution and to refer a matter to the
police; the confidentiality of information
relevant to the investigation of suspected
fraud; the arrangements for the LCFS to
report weaknesses in fraud related systems
to the CFSMS and the NHS body‟s audit
committee and auditors; and the
arrangements for gathering information to
enable the Director of Finance to seek
recovery of money lost through fraud.
5(1) Each NHS body must nominate at least one The PCT has an LCFS so
person that it proposes to appoint as the nominated
body‟s LCFS within six weeks of the date on
which these Directions come into force.
5(2) A person nominated under paragraph 5(1) The LCFS is so
may either be employed by the NHS body or employed
a person whose services are supplied to it
by an outside organisation.
5(3) The name of the nominee must be notified to The CFSMS has been so notified
the CFSMS together with the information
specified in the NHS Counter Fraud and
Corruption manual within 7 days of the
5(4) Without prejudice to the generality of Agreed
direction2(1), before making a nomination
each NHS body must take into account any
guidance issued by the CFSMS on the
suitability criteria for an LCFS.
5(5) After a nominee has – been approved by the The LCFS has been trained and
CFSMS as a person suitable for accredited accordingly
employment; successfully completed any
training required by the CFSMS; and been
accredited by the Counter Fraud
Professionals Accreditation Board, the NHS
body may appoint the person as its LCFS.
5(6) Where an NHS body nominates a person Agreed
whose services are provided to it by an
outside organisation, it must
Comply with the requirements of the CFSMS
as to the suitability of the organisation in
question; satisfy itself and the CFSMS that
the terms on which those services are
provided are such as to enable the LCFS to
carry out his/her functions effectively and
efficiently and in particular that he/she will be
able to devote sufficient time to that NHS
body; and give to the CFSMS a copy of the
contract under which the services of the
LCFS are supplied to it.
5(7) A further nomination must be made within 3 Agreed
months of the date on which an NHS body
learns that there is to be a vacancy for an
5(8) The procedures in paragraphs (3) to (6) also Agreed
apply to a person nominated under
6(1) Each NHS body must specify a job Such a job description is maintained by
description for its LCFS which includes the the Avon Audit Consortium and is
operational and liaison responsibilities available to the PCT
specified by the CFSMS.
6(2) The job description under paragraph (1) The job description does comply with
must include a requirement that the LCFS this requirement
must adhere to the CFPAB Principles of
Professional Conduct as set out in the NHS
Counter Fraud and Corruption Manual
6(3) An LCFS must report directly to the NHS The LCFS does report direct to the
body‟s Director of Finance. Director of Finance for the PCT
6(4) An LCFS must not undertake responsibility The LCFS complies with this
for or be in any way engaged in the requirement
management of security for any NHS body.
7 Each NHS body must- An annual work plan is agreed with the
Require that in addition to the job description Director of Finance and regularly
mentioned in direction 6(1), the LCFS and reviewed. The annual action plan is
the Director of Finance agree at the also passed through the Audit
beginning of the financial year a written Committee
workplan which outlines the LCFS‟s
projected work for that financial year by
reference to the seven generic areas of
counter fraud activity set out in the NHS
Counter Fraud and Corruption Manual.
enable its LCFS to attend the NHS body‟s The LCFS does so attend and has a
audit committee meetings; standard item on the agenda
require its LCFS to keep full and accurate Such records are maintained
records of any instances of fraud or
require its LCFS to report to the CFSMS any The LCFS passes copies of final
weaknesses in fraud related systems of the reports on cases which include details
NHS body and any other matters which may of weaknesses identified to the SWRT
have fraud related implications for the NHS; of the CFSMS
ensure that its LCFS has all necessary The LCFS has access to the CFSMS
support including access to the CFSMS Intranet and is fully supported by the
secure intranet site to enable him/her PCT
efficiently and effectively to carry out his/her
subject to any contractual or legal constraint, The PCT complies with this direction
require all of its staff to co-operate with the and the LCFS works closely with the
LCFS and in particular that those Human Resources Department on all
responsible for human resources disclose matters which may have implications in
information which arises in connection with relation to the investigation, prevention
any matters (including disciplinary matters) and detection of fraud.
which may have implications in relation to
the investigation, prevention or detection of
enable its LCFS to receive training The LCFS receives all training
recommended by the CFSMS; required and available from the
CFSMS and other sources
require its LCFS, its other employees and The PCT complies with this direction
any other persons whose services are
provided to the nhs body in connection with
counter fraud work to have regard to
guidance and advice on media handling of
counter fraud matters which may be issued
by the CFSMS;
enable its LCFS to participate in activities in The PCT complies with this direction
which the CFSMS is engaged including and the LCFS has participated in
national anti-fraud measures, where he/she exercises as requested by the CFSMS
is requested to do so by the CFSMS; such as NPE‟s and LRME‟s and fraud
enable its LCFS to work in conditions of The LCFS does work in a secure
sufficient security and privacy to protect the environment
confidentiality of his work;
enable its LCFS generally to perform his/her The PCT makes every effort to ensure
functions effectively, efficiently and promptly. that the LCFS is able to work as
required by this direction
Avon Audit Consortium North Annex A
Local Counter Fraud Specialist Unit Somerset
PCT Work Plan 2007/2008
Generic Area Task / Objective Output Target Completed Act No of
of Action Measure Date days Days
1. Creating an
Take part in the induction programme for new PCT STAFF Counter fraud Ongoing March 2008 3
Develop an induction pack to be distributed during the PCT‟S induction Induction packs Ongoing March 2008 1 1
process, including slides, handouts, leaflets and NHS CFS forms issued
A programme of alternative counter fraud awareness training to be Feedback from March 2008 3
delivered to all levels of staff within the PCT presentations
Evaluation of all presentations, collating results, amending presentations Report 1
as a result of feedback and writing up a report on outcome for Director of
Design local fraud leaflets and posters to promote anti-fraud work being Posters displayed Feb 2008 1
undertaken by the PCT and distribute and leaflets issued
Place at least two counter fraud articles per year in the in house Articles published March 2008 Oct 2007 1
publication or newsletter.
Develop and maintain counter fraud information on the PCT internet via Regular updates March 2008 March 2008 0.5
links with the Local Counter Fraud Web Site. This should include
Overview of the counter fraud initiative
Role of the LCFS
Proven NHS fraud cases
Link to the NHS CFSMS website
Links to appropriate HR policies
LCFS contact details
LCFS to maintain a record if possible of hits on the site
Design, distribute and analyse responses to a targeted staff survey to 1
identify level of fraud awareness in the PCT
Meet with key personnel in the PCT to discuss fraud matters to include March 2008 March 08 1.5
Head of Pharmacy and Prescribing
Contractor Payments Manager
Director of HR
Director of Nursing
Send round robin „e‟ mail to all staff to introduce LCFS and offer visit or Jun 2007 Sept 2007 0.5
Liaise with DoF to arrange publicity throughout the PCT to GP surgeries Aug 2007 1
and dental clinics
Arrange for pay slip message to be utilised March 2008 0.5
Participate in Fraud Awareness Month March 2008 Nov 2007 0.5
Meet with press officer/communications liaison officer and make aware of Oct 2007 Oct 2007 0.5
NHS CFSMS Corporate Affairs Directorate
National publicity of counter fraud work
Advance warning system
Review and update the communications strategy for the most effective Oct 2007 Oct 2007 0.5
way of communicating with staff to be utilised
Prepare information of the most recent NHS proven fraud cases for the 1
Risk Management Group. Keep this group apprised of any
recommendations made to the PCT to prevent and deter fraud.
Issue the dedicated counter fraud newsletter 3 per year March 2008 March 2008 1
Policies Continue work on reviewing PCT policies to ensure that they reflect the 1
LCFS work and the requirements of Sec of States Directions on
Countering Fraud in the NHS
Review the Standing Financial Instructions at the PCT and ensure that 1
they reflect the requirements of Sec of States Directions and the NHS
Fraud and Corruption Manual update and amend as required
Review distribution of the annual conflict of interest‟s statements and 0.5
ascertain if this is sufficient to address potential risks in this area. Are the
sanctions for fraud clearly indicated on the declaration signed by staff?
Risk Assessment Periodically review the risk register. Ensure that intelligence gathered is 1
used to proactively make fraud risk assessments
Protocols Establish a formal written protocol with internal audit for the dissemination 0.5
of information for areas where control weaknesses may allow a potential
fraud to remain undetected and where investigations have identified
system weaknesses that may require internal audit review. This should
include all primary care audit reports.
Meet regularly with Internal Audit to discuss potential system weaknesses March 2008 March 2008 1
identified during audits or investigations and highlight work being
undertaken by the LCFS, e.g. NPE, NFI or other local proactive work
Fraud Proof Fraud proof a selection of general policies, procedures and claim forms 4
used in the PCT where there is a risk of fraud occurring.
Work closely with the regional and pharmaceutical fraud teams in respect 1
of patient GP registration and communicate „best practice‟ and situation
updates to GP surgeries, including guidance to minimize the impact of
GP multiple registration fraud.
Unaccounted for Check year to year income and expenditure variances to ascertain 2
expenditure levels unaccounted for fluctuations that could indicate expenditure or income
On call payments
Bank and agency usage
Use of selected external contractors suppliers taxi companies etc.
Communication Provide training with authorised signatories on signing documents for 2
payment reviewing the risks involved and the need for adequate checking
Meet with complaints manager and make sure they are aware of relevant 0.5
reporting systems. Ascertain how this is disseminated to avoid
recurrence. Inform the NHS CFSMS of any system weaknesses identified
that have potential national implications,
NHS CFS – led Ensure that any fraud prevention instructions issued by the NHS CFSMS March 2008 March 2008 1
initiatives are actioned and complete and return relevant compliance statements.
Pass appropriate risk information to the Risk Manager for possible
Ensure that any fraud notices are appropriately actioned to avoid PCT March 2008 March 2008 1
falling victim to similar activities
Establish a system of follow up reviews of fraud notices to ensure that the 0.5
Trust is remaining vigilant in these areas
Confirm reporting arrangements for informing the Audit Committee and 0.5
the DoF of the fraud notices so that adequate systems controls can be
implemented and monitored
Undertake the mandatory national proactive exercises as instructed and 15
required by NHS CFSMS
Undertake any mandatory risk assessment exercises as instructed and Oct 2007 6.5
required by NHS CFSMS
Local initiatives Undertake a local proactive exercise at the PCT as agreed with the 10
Director of Finance
All exercises must only be undertaken where there is good reason to do
so and only as directed by the Director of Finance
Oversee the implementation of penalty charge legislation in line with NHS Aug 2007 Aug 2007 4
CFS instructions where exemption from health costs has been
erroneously claimed by patients
5. Investigating Conduct investigations in line with the NHS Fraud and Corruption Manual March 2008 March 2008 16.5
Assist the NHS CFSMS with information as required for any regional or March 2008 March 2008 0.5
national fraud cases
Meet with the Data Protection Manager and ensure that the LCFS 0.5
requirements are adequately recorded through the PCT‟S data protection
register and that the DP manager is aware of the work undertaken by the
Ensure access to the CFSMS Case Management System and maintain 1.0
detailed records of all referrals that have been received.
Ensure that the HR/LCFS Interaction Protocol is reviewed and updated 0.5
Undertake work to ensure that effective liaison takes place with other 0.5
members of staff to ensure that sanctions such as disciplinary sanctions
are not applied in isolation where there are indications of potential wider
7. Redress 0
Maintain comprehensive records of time spent on each investigation so March 2008 March 2008
that this can be included in any compensation claim made by the PCT
Identify and maintain a record of the actual proven amount of loss to the 1
PCT so that appropriate recovery procedures can be actioned. Ensure
that the PCT has a procedure in place to recover money.
8. Counter Fraud
Attendance at all quarterly meetings held by the NHS CFSMS Regional 1
Attendance at the NHS CFSMS annual conference n/a n/a 1
Drafting, Completion and agreement of Work plan with the Director of April 2007 April 2007 1
Regular meetings with the Director of Finance March 2008 March 2008 2
Preparation for and attendance at Audit Committee meetings including March 2008 March 2008 2
Assistance in the Quality Inspection Process n/a n/a 1.5
Undertake any additional training as required by the PCT or NHS CFSMS n/a n/a 1.0
Provide ad hoc information to NHS CFSMS as required March 2008 March 2008 0.5