Police say the nature of fraud, much of it involving modern technology, is "constantly evolving"

Fraud costs the UK economy £38bn a year, with more than half of that suffered by the public sector, according to official estimates.

The National Fraud Authority (NFA) said that if the total cost was broken down, every UK adult would be £765 worse off.

The NFA said "a stronger counter-fraud culture" was needed.

Cabinet Office minister Francis Maude said the £21bn cost of public sector fraud could pay for 800 secondary schools or 615,000 nurses...

He said: "Contrary to what many people think, fraud and error is not just confined to benefits and revenue.

"It affects every government department and impacts on the government's ability to deliver better public services, while stripping the civil service of vital resources. We can't and won't allow this to happen any more."

The cost to the private sector was £12bn and charities lost £1.3bn, the NFA reported, while individuals' losses were estimated at £4bn.

Frauds included marketing scams, bogus operators, fake lotteries and online ticketing and rental crimes.

The scale of public sector fraud reflected better reporting procedures, said the researchers, who added that it remained a relatively small proportion of total spending.

Bernard Herdan, of the NFA, said the authority's annual fraud indicator was a "blueprint" for work to tackle the "rising tide" of fraud.

Everyone should make an effort to protect themselves and share information on suspicious behaviour with the authorities, he said.

"We want to develop a stronger counter-fraud culture, which helps to disrupt fraudulent activity across the UK and globally," Mr Herdan said.

Last year's first annual fraud indicator reported a total cost of £30bn, but the NFA said the two reports were not directly comparable because some areas of fraud had been included for the first time this year.

(CNN) -- As the country was sinking into its worst financial crisis in more than 70 years, Security and Exchange Commission employees and contractors cruised porn sites and viewed sexually explicit pictures using government computers, according to an agency report obtained by CNN.

"During the past five years, the SEC OIG (Office of Inspector General) substantiated that 33 SEC employees and or contractors violated Commission rules and policies, as well as the government-wide Standards of Ethical Conduct, by viewing pornographic, sexually explicit or sexually suggestive images using government computer resources and official time," said a summary of the investigation by the inspector general's office.

More than half of the workers made between $99,000 and $223,000. All the cases took place over the past five years.

The inspector general's report includes specific examples of misuse by employees.

A regional office staff accountant tried to access pornographic Web sites nearly 1,800 times, using her SEC laptop during a two-week period. She also had about 600 pornographic images saved on the hard drive of her laptop.

Separately, a senior attorney at SEC headquarters admitted to downloading pornography up to eight hours a day, according to the investigation.

"In fact, this attorney downloaded so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office," the inspector general's report said..

"It is nothing short of disturbing that high-ranking officials within the SEC were spending more time looking at pornography than taking action to help stave off the events that brought our nation's economy to the brink of collapse," said Rep. Darrell Issa. The Republican is a ranking member of the House Committee on Oversight and Government Reform.

"This stunning report should make everyone question the wisdom of moving forward with plans to give regulators like the SEC even more widespread authority," he said. "Inexplicably, rather than exercise its existing regulatory enforcement authority, SEC officials were preoccupied with other distractions."

The investigation came to light on the same day President Obama gave a speech in lower Manhattan, calling for reform in the finance industry.

On Capitol Hill, the Senate is working on a reform bill that would set up regulatory oversight of the financial industry's practices with the goal of preventing another Wall Street meltdown like the one in 2008 that launched the U.S. recession..

The bill includes an "early warning" system intended to spot signs of crisis, as well as a $50 billion liquidation fund created with money from banks and other finance industry corporations to ensure an orderly transition in closing down failing entities. It's approved by the Senate's Banking and Agricultural committees.

The House passed its version of the bill in December.