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 2015/16.

The Committee noted that fraud in the public sector had a national focus through the publication of "Fighting Fraud and Corruption Locally – The Local Government Counter Fraud and Corruption Strategy”. Whilst the national strategy stated that the level of fraud in the public sector was significant, the current trends in fraud activity includes areas which Coventry City Council did not have responsibility for, such as social housing, and the levels of identified / reported fraud against the Council were at relatively low levels, in terms of both numbers and value.

The report indicated that the National Fraud Initiative exercise led by the Cabinet Office took place every two years and matched electronic data within and between public bodies with the aim of detecting fraud and errors.  The work in 2015/16 had focussed on following up the matches which were released in February 2015 (approximately 13,500 matches).  In addition to the outcomes previously reported to the Audit and Procurement Committee in August 2015, which in total identified £56,000 of overpayments, the work in 2015-16 focused on the matches received in relation to Council Tax.  In the last update to Audit and Procurement Committee in December 2015, it was reported that 82 single person discounts had been cancelled totalling approximately £30,250.  Since then, a further 97 discounts totalling £14,350 had been cancelled.

The Committee noted that during the year there had been a total of 21 referrals and investigations through whistle blowers, managers or complaints.  9 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.

The Committee discussed the recent reduction in whistle blowing and the need to refresh awareness in relation to this process. It was suggested that an article be included in Cityvision to encourage whistle blowing from residents in connection with council tax fraud.

The Council’s response to fraud also considered an element of proactive work to ensure that all key fraud risks were considered. In December 2015 the Committee were advised of the work undertaken to date, namely updating the Council’s fraud risk assessment and participation in a procurement pilot in-conjunction with the Home Office and West-Midlands police. Since then, in-conjunction with a third party, the Council had undertaken a proactive review of payments made to Council suppliers to identify and recover (a) any duplicate payments which had been made and (b) any credit notes issued (or other credit transactions on suppliers’ accounts) which the Council had not processed.  This work has identified 7 duplicate payments, amounting to £7200 and 102 credit items, amounting to £96,200.  A further transaction was currently being resolved, and would result in recovery of a further £55k.

The reasons behind these transactions are not always straightforward and reflected a variety of factors, some of which were outside of the Council’s control.  However, consideration had been given to the internal control implications linked to this within the 2015-16 Internal Audit review of Accounts Payable.

The Committee noted that, during the period from April 2015 to March 2016, no significant frauds had been identified.  These were frauds with an financial impact in excess of £10k, frauds under £10k where the Acting Chief Internal Auditor considered this was justified by the nature of the fraud.

RESOLVED that:

1.  The outcome of the Council’s response to fraud activity during 2015/16 be noted.

2.  Corporate Communications be requested to include an article in Cityvision encouraging whistle blowing from residents in connection with council tax fraud.