Embarrassment for North East Lincolnshire Council as sly fraudster scams it of £27,000

A costly lapse! The council says the fraud was 'preventable'

                                                                 

A FRAUDSTER has scammed £27,000 from the coffers of North East Lincolnshire Council.

A report to councillors states: "Regrettably, in September, the authority was the subject of a successful mandate fraud relating to invoices amounting to £27k. 

"It appears that the fraudster was able to intercept e-mails between the supplier and council, including invoices sent to the council for payment. 

"They were then able to request a change in bank account number using the supplier e-mail address."

It appears that a member of accountancy service desk team in the finance department took his/her eye off the ball.

The report continues: "This fraud was preventable - there were a number of warning signs that were missed.

"These should have flagged the possibility that the change request was fraudulent, but these were not identified." 

According to the report, the staff member also failed to follow the established procedures to verify, independently,  a request to change a supplier bank account.

It goes on: "This fraud demonstrates the importance of understanding the risks associated both with changes to supplier information and the methods fraudsters use to steal council money. 

"There is a specific mandate fraud awareness e-learning module available to all employees.

"However, it is clear that there is a requirement to carry out further training to raise awareness of the warning signs in relation to mandate fraud to ensure further instances are prevented.

As well as being costly, the incident is an embarrassment to NELC where finances are known to be under extreme pressure.

Says a spokesperson: " We cannot afford to lose money to fraud. 

"We all have a responsibility to understand what fraud looks like, what to do when we suspect it and how to report it."