Jeremy Pocklington tells MPs that cloud analytics is set to be rolled out more widely as part of the Ministry of Defence’s work to clamp down on fraud and error
Ministry of Defence permanent secretary Jeremy Pocklington has told watchdog MPs that his department is developing enhanced “commercial leakage” capability that utilises cloud analytics to detect fraud and error in payment processes.
Pocklington’s comments came in a letter to members of parliament’s Public Accounts Committee, following a recent session on the MoD’s approach to tackling fraud and error.
The session heard that the MoD had blocked invoices valued at £211bn over the course of three years because of problems with requests for payment. Pocklington described the figure as “abnormally high” in 2022-23, but explained in his letter that one blocked invoice alone accounted for £210bn of the figure because of a supplier’s typographical error.
Nevertheless, MPs asked how advanced analytics could be used to help the department detect incorrect invoices.
Pocklington said the MoD currently processes invoices through the Oracle Contracting, Purchasing and Finance system and subjects them to robust automated controls. He said requests for payment need to go through a three-way matching process between the invoice, the purchase order, and confirmation of receipt of goods or services.
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The perm sec said the Oracle Fusion Cloud solution is currently “in the design and configuration stage” as a replacement for existing finance systems.
“It will bring more advanced data reporting tools and monitoring technology into day-to-day finance operations,” he said. “The Fusion software suite includes automated (and human-in-the-loop) error and fraud detection reporting through a dedicated ‘risk management’ application. This will enhance financial audit and compliance capabilities, alongside improved user access controls.”
Pocklington said artificial intelligence is “embedded throughout the Oracle toolsets and applications”, including analytical tools that can be leveraged to assist the MoD in identifying and reporting unwanted invoice activity.
The use of an embedded supplier portal enables better communication with suppliers on invoice queries, he said.
Pocklington added: “We are also developing enhanced ‘commercial leakage’ capability through cloud analytics which will be rolled out more widely.”
However, he said that despite the use of technology, whistleblowers would continue to be a “key source of information” in detecting fraud.
Pocklington’s follow-up letter was dated 20 March but only published by PAC last week.
His appearance before the committee had been part of MPs’ examination of a National Audit Office report on the MoD’s approach to tackling fraud and economic crime.
The NAO said the department had reported a potential exposure to fraud of up to £1.5bn a year, mostly related to procurement.
Pocklington told the session that the MoD spends in the region of £60bn a year on goods and services. He said the £1.5bn annual figure for potential fraud in the NAO report was “quite a theoretical number”, based on academic benchmarking and that it represented “quite a conceptual estimate of the risk”.
In his letter to the committee, Pocklington told MPs that getting a more granular and accurate estimate would take some time.
“I would expect the work to run over about a year, with initial assessments of the less complex categories by the end of 2026,” he said. “We will set out a phased plan with delivery dates in the Counter Fraud Strategy, which will be complete by September this year. I will share this with the committee when I provide a summary of the strategy after its publication.”
