The internal audit, counter fraud and information governance unit called Veritau was set up in 2009 by North Yorkshire County Council and York Council, and has since gained national recognition for its work.
York Council officers have recommended that the team of investigators should now start working with district councils covering Scarborough, Ryedale, Richmondshire, Hambleton and Selby from April this year.
Concerns have been growing that the economic downturn is leading to many financially-stricken individuals to turn to benefit and housing fraud.
Veritau has scored a series of major successes in the last two years, including a case involving one of York’s worst ever benefit cheats.
Sarah Beattie, 33, of Water Lane, in Clifton, pleaded guilty during a hearing at York Crown Court in March to fraudulently claiming more than £30,000 in four years.
However, York Council believes the true figure was as high as £60,000, and Beattie was sentenced to 250 hours of community service.
The team of investigators are also charged with pinpointing internal fraud committed by council employees, a task which has taken on an even greater significance as finances are increasingly tight amid the Government’s austerity measures.
Figures from the Department for Work and Pensions have revealed a significant rise in the number of fraud prosecutions nationally.
The number of fraud cases accepted for prosecution increased by 11.5 per cent to 7,350 cases in the last quarter of 2010/11 compared to the same period in the previous financial year.
The cabinet will consider the recommendations to expand the service on January 10.