Agenda item

Report of the Deputy Chief Executive (Place)

The Committee considered a report of the Deputy Chief Executive (Place), which provided a summary of the Council’s anti-fraud activity for the financial year 2016/17.

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 included 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 Internal Audit Service was responsible for leading on the Council’s response to the risk of fraud and work had been focussed on four main areas during 2016/17, namely Council Tax; National Fraud Initiative (NFI); Referrals and investigations considered through the Council’s Fraud and Corruption Strategy; and Proactive work.

Work undertaken in relation to Council Tax had focussed on reviewing Council Tax exemptions and discounts and on Council Tax Referrals.  The report indicated that 136 exemptions / discounts had been removed from customer accounts and that revised bills had been issued amounting to £157,000.  £134,000 had been repaid to the Council and the remaining balances were being recovered through agreed payment instalment arrangements.

The Council received referrals from both internal and external sources linked to concerns around the payment of Council Tax support or Council Tax discounts / exemptions and the report identified the number of referrals by source during 2016/17.  It was noted that whilst the vast majority of cases were passed to the Department for Work and Pensions to investigate under agreed arrangements, the Council had validated six concerns during 2016/17, linked to the payment of council tax.  This resulted in revised bills / overpayments of approximately £19,000 being issued, of which £13,000 had been repaid to date.

The NFI exercise was 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 error.  In 2016/17 work had focussed on collating and submitting data for the next exercise and following up on matches identified during the last year relating to council tax bands E and above.  159 matches were reviewed which resulted in 10 single person discounts being cancelled and revised bills / overpayments of around £14,000 being issued.  The report indicated that £7,000 had been repaid to date.

In relation to referrals and investigations, the report set out the number of referrals by source (Whistle Blower, Manager, and External) during 2016/17 and compared them with the three previous financial years.  In considering the information, the Committee noted that there was no way of determining the number of referrals that the Council should receive on an annual basis.  During 2016/17 21 referrals were received, of which 8 had led to full investigations.  A further five investigations were carried forward from 2015/16.  Of these 13 investigations, seven related to fraud / theft or other activities linked to obtaining a financial benefit, with the remaining six cases involved code of conduct issues including un-authorised absence.  The report provided details of the outcome of the ten completed investigations and indicated that three investigations were still on going.

The Council’s response to fraud also considered an element of proactive work to ensure that all key fraud risks were considered.  In 2016/17 this work included consideration of the Organised Crime Procurement Pilot report, published by the Home Office in December 2016.  As a result, a specific audit review on this issue was included in the 2017/18 Audit Plan.  In addition, in conjunction with a third party, a proactive review was undertake on the payments made to Council suppliers.  The Committee noted that this work recovered payments totalling £181,000 and that a report detailing this work would be submitted to a future meeting.

The report further set out that, within the International Auditing Standards, there were clear expectations around the level of oversight that the Audit and Procurement Committee should have in relation to the risk of fraud within the Council.  This included and expectation that appropriate detail be provided around significant fraud.  In the period April 2016 to March 2017, no significant frauds had been identified.

Members enquired about the investigation of housing benefit fraud; benchmarking staffing levels; and the support provided for whistle blowers.

RESOLVED that:

(1)  The Audit and Procurement Committee note the anti-fraud activity undertaken in the financial year 2016/17.

(2)  Comparison data concerning staffing levels at other Local Authorities compared to Coventry to be included in the next fraud report.