The call comes after a report from the National Fraud Authority, which apparently discovered the dangers of 'fraud from within', rather than external IT attacks.
The NFA's report found that fraud losses in the public sector are close to £25 billion a year and that insider fraud within the public sector requires greater understanding.
Infosecurity notes that the NFA is currently undertaking a scoping study to obtain a greater understanding of employee-enabled fraud and the solutions available to deter this threat.
According to Advanced Computer Software, in a July 2010 report from PricewaterhouseCoopers, researchers found that public sector fraud in the UK is rising as a result of budget cuts and staff reductions.
The considerable public sector job losses ahead are likely to exacerbate this, says Advanced.
As a result, the IT services firm is urging public sector bodies to implement comprehensive fraud prevention and detection processes plus technologies, such as spend analytics software, which can help combat this threat.
The private sector, adds the company, has learned to its cost that business fraud can increase during unsettling economic times.
And, says the firm, the types of fraud carried out by an employee can vary, from the organisation paying too much for goods or services with the employee pocketing the difference between the real cost and the inflated cost, all the way through to an employee diverting a lucrative contract away from the company to a third party accomplice.
"Public sector bodies need to be vigilant about possible fraudulent activity from members of staff", said Vin Murria, the IT services company's CEO.
"Although the majority of people would never consider defrauding the company they work for, there will always be some people, especially in times of economic hardship, who are tempted to commit fraud", he added.
Murria argues that, in order to detect fraudulent activity, organisations need to invest in analytics software, which creates a comprehensive and single view of an organisation's expenditure, and so enable the detection of any spending anomalies.
"It's vital for the public sector to adequately protect itself against fraud from within", he said.
"Technologies such as spend analytics, in combination with appropriate fraud detection processes, provide additional layers of security, reducing an organisation's risk of becoming a victim of fraud", he added.