Agenda item

Report of the Executive Director of Resources

The Committee considered a report of the Executive Director of Resources, which provided a summary of the Council’s anti-fraud activity for the financial year 2014/15, focusing on corporate and benefit fraud work.

The Committee noted that the focus given to fraud in the public sector had increased over the last few years, primarily as a result of the publication by the National Fraud Authority of "Fighting Fraud Locally - The Local Government Fraud Strategy".  Whilst the national strategy stated that the public sector was dealing with increasing levels of fraud, the experience of the Council was that, except for benefit fraud, levels of identified / reported fraud against the Council were at relatively low levels, in terms of both numbers and value.

The report indicated that, with regard to Corporate Fraud, the National Fraud Initiative exercise was now led by the Cabinet Office and took place every two years, matching electronic data within and between public bodies with the aim of detecting fraud and errors.  The results from work undertaken during 2014/15 were released in February 2015 and identified approximately 13,500 matches for the Council to consider.  The results from matches reviewed to date include:-

·  Housing Benefit overpayments totalling £46,300, which were in the process of being recovered.

·  53 matches in relation to Rising 18’s, where Council Tax discounts have been cancelled totalling approximately £13,250.

·  Two cases where payments had continued to be made to care homes following the death of the resident, resulting in overpayments of £7,695 which had now been recovered.

·  Two cases where the Council had continued to make pension payments to retired employees after they had died, resulting in overpayments of £1,564 which were being recovered.

The Committee noted that during the year there had been a total of 26 referrals and investigations through whistle blowers, managers or complaints.  7 of these led to full investigations and the report set out the reasons for referrals not resulting in full investigations and the types of allegations received.

In December 2013, the Council introduced a new finance system, Agresso, which incorporated a new Accounts Payable module.  Whilst processes were put in place to manage the transition from the old to the new system, a risk was identified where the same invoice could be paid by both the old and new system. Comparison work was undertaken which identified that116 invoices had been paid in both systems, to a value of £135,500.  Of this, it was found that £110k had already been identified and repaid to the Council at the time of the review.  The remaining £25.5k identified through the review had now also been repaid to the Council.  Whilst the level of duplicate payments identified was significant, this was due to a one-off situation and did not reflect the normal control environment around invoice payments to suppliers.

The report also detailed the work of the Benefit Fraud Team up until their transfer to the DWP as, following the transfer, the Council ceased to receive allegations. Between April and December 2014, the Team administered 106 sanctions. The work of the team had contributed to the identification of overpayments, through both fraud and non-fraud, totalling approximately £773,000 which is being pursued for recovery.

RESOLVED that the Audit and Procurement Committee note the outcome of the Council’s response to fraud activity during 2014/15.