A data matching exercise, part of the UK-wide National Fraud Initiative (NFI), detected £21.5 million worth of fraud and payment errors across the Scottish public sector.

The NFI helps detect and prevent fraud and error by matching data sets across public bodies. Savings are identified, for example, by checking eligibility for council tax discounts against the electoral register. The initiative runs every two years.

Among other things, the exercise found that 1,075 free bus passes had been used even though the owner had died, costing just over £300,000 in fares and about £180,000 in reimbursements. Their cancellation is thought to have saved £700,000 in the future.

A total of 5,140 blue badges were also cancelled, at an estimated notional value of £3.3m.

Data that was obtained by the watchdog also led to 280 applicants being removed from council house waiting lists, up from 187 in the previous exercise and representing about £1.2m of notional value.

As for pensions, the NFI saved £500,000 on payments to someone who had died – making an estimated saving of £5.1m into the future.

John Cornett, executive director of audit services, said: “The detection and prevention of fraud using the National Fraud Initiative remains vitally important to financial management across the public sector.

“To make the most of the NFI, public bodies need to ensure they have appropriate levels of resources in place to effectively follow up on matches.”

A spokesman for the Scottish government said: “The Scottish government has robust measures to ensure only people and businesses entitled to receive grants and benefits do so.

“The National Fraud Initiative exercise is one tool to aid with the detection and recovery of fraud and error. Alongside Audit Scotland, we continue to encourage public bodies to take part.”