Taxi Fraud

Tuesday, September 3rd, 2013

Crown Prosecution Service – Taxi Fraud

It was widely reported in last week’s press that two Crown Prosecution Service workers were each jailed for six years, for swindling £1million from the taxpayers in fake taxi receipts. It was reported that the fraud was uncovered after an annual audit, and, that two previous audits had not uncovered the fraud.

This case raises vital questions regarding the quality of procurement and payment systems, and the quality of audits of procurement and related matters. It was alleged that Burrows and Mahmood (the CPS workers) had funded a lavish globe-trotting lifestyle. They had filed hundreds of bogus claims for taxi rides over five years. This type of fraud is regularly perpetrated in many organisations where vigilance and systems leave a lot to be desired.  This is a general statement, not implying that fraud is present in widespread in the CPS. Let us ask six questions in regard to B&M Taxis, the fictitious company set up by Burrows and Mahmood. Their initials formed the name of the company – not an original approach, not particularly gifted when perpetrating a fraud.

Q1. How were B&M Taxis put on the system as an approved supplier? If it was the same person, i.e. Burrows, a senior CPS finance manager, who could sign off the invoices, this is a flawed system defined as a “closed loop”.

Q2. Who checked the ownership of B&M Taxis? With an expenditure in excess of £1m (an average of £4k per week)  this would be a wise thing to do? The director’s names could be run against the employee listing and matches highlighted.

Q3. Did B&M Taxis ever do any legitimate work CPS? If so, what basic information was collected, such as a PQQ?

Q4. Burrows, signed off the invoices. Who gave her the delegated authority?

Q5. Did anyone check the lifestyles of Burrows and Mahmood?

Q6. What were procurement doing during the five year period (assuming the CPS procurement have a credible role to play)?

The reputational damage to the CPS is obvious. On a personal note, when we are engaged in expenditure audits we are often ‘discouraged’ from scrutinising real invoices. We know why! We train internal audit teams in the ‘tricks of the trade’ – so far as procurement is concerned.

Interested? Contact me Ray Gambell on 01744 20698 or email me at r.gambell@brianfarrington.com

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About Brian Farrington Ltd

Brian Farrington Ltd is one of the world’s longest established procurement and supply chain consultancy and executive training specialists. 33 of the current FTSE100 have retained our services, as well as leading organisations in the UK, North America, southern Africa and Asia.

Established in 1978, we have proven expertise and experience in identifying and managing fraud in procurement.

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