In these times of austerity you would think that public bodies fraudulently wasting money would be a hot topic. Well that’s what I thought as a right-minded citizen but let me unfold the story for you.

In April 2018 (at the start of the new tax year) I received an email from some concerned employees at the Parliamentary and Health Service Ombudsman (PHSO.)  From the content of their email it was clear that they had access to computer records and were concerned that staff were being encouraged to claim for unworked overtime and charge an inflated rate of £45 per hour.  They had tried to raise this issue of fraud with management but found to their surprise that management were actually promoting the scam.  Consequently, they wrote to me, unable to report it internally.  You can read their email here.

I am an employee at PHSO. My colleague and I have discussed recent issues and can no longer keep silent. Our conscience will not allow it. As a last resort, we are writing to you as management are ignoring serious fraud issues and are actually promoting it. We hope you can apply pressure by asking for relevant info relating to the fraud and by highlighting it to parliament.

In the last financial year (2017/18) PHSO has underspent. The issue with underspending is that previous year spending is used to calculate how much funding PHSO gets for the next year. This caused management in PHSO to panic. As a result, they promoted overtime close to the year-end (last two weeks has seen the biggest overtime promotion). Frontline staff were encouraged to claim overtime. The overtime rate for caseworkers was £45 an hour plus a bonus for doing 3.5 hours or more. That rate for a public sector organisation is criminal. In addition to this crazy overtime rate, staff were actually told to claim overtime even though they did not work. Staff were encouraged to fudge their timesheets. That is a fraud. I am sure that is illegal and can no longer watch this type of thing happening. Managers and staff in the operations team openly over claim in their time sheet to do reduced hours of work and to take extra time off in lieu, but this is taking this issue to another level.

Along with other public organisations PHSO had just released data on their pay gap which meant they had to compare recorded data which included overtime pay and bonuses. On the 9th April, just after the release of this information into the public domain, I asked a FOI request which would give a monthly breakdown of overtime and bonus payments. You can see the full request here: phso_pay_gap FOI  This information must have been available to PHSO just days before in order for them to calculate their pay gap (women 9.9% below men).  A monthly breakdown would show a spike in March/April if the accusations of fraud were true.  Amazingly, for a public body PHSO keep no records of pay, overtime pay or bonus payments. This was the response to my FOI request. (They were obviously flustered and made a mistake with the 2017 date which should have been 2018).

The PHSO do not hold the information you request. The information gathered
for the pay gap reporting was a one-off manual exercise that was collated
on our published snapshot data of 31 March 2017 (sic) and did not include
overtime information. We no longer hold the information gathered for this
one-off manual exercise therefore the data published is the extent of what
is held on this matter.

Following an internal review it was revealed that bonus is paid as ‘annual pay’ and not recorded separately and PHSO outsource overtime payments so keep no records themselves.

2. PHSO outsource our payroll processing to a third party provider. Under
this service contract PHSO do not require the provider to report
overtime paid at an individual level. Consequently PHSO only hold data
on overtime hours worked. The service contract allows for overtime to
be paid based on hours worked at an individual level. As a result PHSO
submit to the payroll provider a monthly schedule of hours worked and
the provider processes this information to calculate and pay staff
based on hours worked and hourly rate. Individuals are informed of
overtime pay in their monthly payslip and PHSO is provided with
summary pay information at a corporate level. PHSO does not hold
information on individual’s overtime pay.

Following this revelation I asked them for the data they did hold which was ‘a monthly schedule of hours worked’ which would demonstrate a spike if payments were encouraged at the end of the financial year.  Although they stated that this was their method for passing data onto a third party it was then discovered that PHSO did not have a monthly breakdown;  just a global figure.  Smelling a rat yet?

2,721 overtime hours were worked in 2017/18. We do not hold the data
broken down into months. £77,261 was paid as overtime for 2017/18.

Now any rational person would be thinking that in order to calculate the pay gap data, just a few short days before my FOI request they needed more specific information to be recorded than these two overall figures. Being a rational person myself I could not believe that PHSO had disclosed all the stored data on this issue which was their legal duty under FOI law. So I gave them another chance.

“I am not convinced that PHSO does not hold the overtime hours worked as a monthly record. Overtime is paid monthly so the hours collated by PHSO and passed to the external contractor must be stored in a monthly format. I have a right to see that information as it refers to the spending of public money and is not ‘personal’ data.

I am therefore requesting once again to see the data which is held by PHSO on monthly overtime hours worked for 2017/18.

It would not be possible for PHSO to evaluate consistency of performance without storing data on overtime and bonus payments on a monthly basis. How would it be possible for a line-manager to detect a change in performance either for the better or for the detriment if no monthly record is kept?

I will give PHSO one more chance to deliver the bonus and overtime payments broken down into monthly figures for 2017/18.”

I was supported in my logic by another contributor to the Whatdotheyknow site who reasonably pointed out;

If they are saying that the quoted information was by ‘snapshot’ – it must have been on record for them to ‘snap’
It can’t be that the PHSO just have this one snap-worthy piece of data on file – for the singular purpose of ‘snapping’.
There logically must be more.

But logic didn’t cut the mustard with PHSO who stuck by their story preferring to look as though they are blasé with keeping track of public money rather than reveal data which could possibly prove the alleged fraud. But a public body is surely responsible for how it spends public money so how did they imagine they would get away with it?  How for one minute, in a mature democracy with openness and transparency written into its DNA did they think they could side-step this issue. Yeah, you’re already ahead of me right.

I continued to press them so they play one of their trump cards. They do have the data, well of course they do, they are a responsible public body, it’s just that it would take too long to find it.

In order to provide overtime hours worked on a monthly basis we would need
to manually trawl our monthly returns to the payroll provider (over 400
records per month). This would mean assessing approximately 5,000 records
showing hours worked. To collate this information would incur a commitment
of resources in excess of the limit of £450 set by the Freedom of
Information and Data Protection (Appropriate Limit and Fees) Regulations
2004 (SI No. 3244 of 2004), which equates to 18 hours of work. Section
12(1) of the Freedom of Information Act provides that a public authority
is not obliged to comply with a request where to do so would exceed such a

Talking about time – it’s the 21st August when I get this response. Four months after my initial request. So I start to play my trump card because after all I have inside information. I copied them in on my email correspondence including the part which demonstrates how the concerned staff became aware of the fraud.

The overtime rate paid to operational staff and managers were a lot higher than anything that can be justified by any public sector organisation
– Staff were told by managers to fraudulently claim for overtime even though they did not work. This can clearly be seen by scanning the IT system to see who actually claimed but was not logged on
– Staff and managers openly talk about this. All the people in the quality team were asked to fill in over time and many operational teams were asked to do the same – even though they did not work
– Senior Managers promoted the behaviour and are ultimately accountable

And added for good measure some comments of my own.

“This part is particularly relevant as it demonstrates that PHSO can identify who claimed overtime and who was logged on using their own IT systems – as you would expect.

– Staff were told by managers to fraudulently claim for overtime even though they did not work. This can clearly be seen by scanning the IT system to see who actually claimed but was not logged on

I will now take this to the National Audit Office and inform Bernard Jenkin and PACAC who are evidently keen to see that money is well-spent at PHSO under Mr Behrens.”

So I’m going to dob them in basically to Sir Bernard Jenkin chair of PACAC, the select committee who hold PHSO to account on behalf of Parliament and on behalf of the public of course, and the dependable National Audit Office who have as their remit the following statement:

We audit the financial statements of all central government departments, agencies and other public bodies, and report the results to Parliament. Our other work comprises value-for-money studies, local audit, investigations, support to Parliament and international activities. We also share our cross-government insight through guides setting out good practice and the questions we ask when assessing value for money.

Now they will be sorry they messed me about and didn’t come clean. You can run but you cannot hide.  By this time it’s the end of August 2018. I’m having my house renovated and bunking in with friends and to be honest establishing the truth on this matter somewhat slipped my mind. But I came back to it and so can you in part 2.  Watch this space.