Workplace pension provider loses £1.4m to fraud
The National Audit Office (NAO) has qualified the accounts of the National Employment Savings Trust (NEST) Corporation, which was set up to administer workplace pensions, after a ‘significant control failure’ saw the organisation lose some £1.4m through supplier fraud, reports Chartered Accountants Northampton Harris and Co who provide accountancy services to small businesses.
In its report, the NAO said the Comptroller and Auditor General qualified his audit opinion on the regularity of NEST’s 2012-13 Annual Report and Accounts, on the ground that it incurred fraudulent expenditure in the year.
The loss of £1.446m relates to a small number of payments to a supplier which were fraudulently diverted, via a mandate fraud involving changes to supplier and bank transfer details. It represents 2.4% of NEST’s total expenditure of around £61m.
The NAO said the fraud led to a material loss of public funds and that the circumstances in which it arose ‘were a significant control failure for the corporation.’ However, it accepted that NEST explained the circumstances of the fraud, including the fact that no money was taken from pension scheme members’ retirement pots, in the governance statement in its annual report (section 4.17).
The report said that NEST has undertaken the necessary work to investigate the incident and initiated steps to strengthen controls over the payment process.