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 during the financial year 2017/18 to date.

The Committee noted that fraud in the public sector has a national focus through the publication of “Fighting Fraud and Corruption Locally – The Local Government Counter Fraud and Corruption Strategy”.  Whilst the national strategy states that the level of fraud in the public sector is significant, the current trends in fraud activity includes areas which the Council does not have responsibility for, such as social housing, and the levels of identified / reported fraud against the Council are at relatively low levels, in terms of both numbers and values.

The Internal Audit Service was responsible for leading on the Council’s response to the risk of fraud.  The work of the team focussed on three main areas during 2017/18, namely council tax; National Fraud Initiative; referrals and investigations considered through the Council’s Fraud and Corruption Strategy.  An element of proactive work was also included in the work of the Service, though it was noted that, due to the focus on the National Fraud Initiative during 2017/18, the ability to undertake this work had been limited.  However, it was acknowledged that planned proactive work would be prioritised during 2018/19.

In relation to Council Tax, work had focussed on reviewing Council Tax Exemptions and Discounts.  This work had resulted in 80 exemptions being removed as the customer had failed to report a change in circumstances.  These had been treated as an error rather than a fraudulent application to obtain an exemption they were not entitled to.  Revised bills amounting to £94,000 had been issued of which £30,000 had been repaid to the Council to date.  The outstanding balances were being recovered through agreed payment instalment arrangements or the Council’s standard recovery arrangements.

In addition, the Council received referrals from both internal and external sources linked to concerns around the payment of Council Tax Support or Council Tax Exemptions / Discounts.  In total, 15 referrals had been received.  The report indicated that, whilst most of these were passed to the Department of Work and Pensions to investigate under agreed arrangements, 3 concerns had been validated in relation to the payment of Council Tax.  This had resulted in revised bills / overpayments of around £16,500 being issued, of which £9,000 had been received to date.

With regards to the National Fraud Initiative (NFI), the exercise was 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 error.  The results of the last exercise were released in January 2017 and identified approximately 3,000 high quality matches for the Council to consider.  Given the high number of matches, priority had been given to known problem areas and key matches as judged by the Cabinet Office.  In summary, around 600 matches had been reviewed and processed and the report provided a breakdown of the areas where errors had been identified, including housing benefit claimants to student loans; Council Tax Support to Council Tax Support; Council Tax Support to DWP deceased; and Residents Parking Permits to deceased.  The report also provided details of the action taken.

In addition, whilst the NFI exercise takes place every two years, council tax matches relating to the award of single person discounts were received on an annual basis as they were matched to the new electoral register which was published each December.  In 2017-18, the work had focused on those matches relating to council tax bands E and above.  In total, 113 matches were reviewed, which resulted in 6 discounts being cancelled.  Revised bills / overpayments of around £7,100 were issued and processes were in place to recover the overpayments identified.

From time to time, the Internal Audit Service received referrals or were asked to assist with investigations relating to employment misconduct and other fraud against the Council involving external individuals.  During 2017/18, 13 referrals had been received to date, 2 which had led to full investigations.  It was noted that there were various reasons for referrals not leading to investigations including, for example where it was a ‘one off’ situation and there was no information available to indicated who was involved, or where initial fact finding review does not substantiate the concern raised.

In addition to the 2 investigations for 2017/18, a further 3 investigations were carried forward from 2016/17.  Of these 5 investigations, four related to fraud / theft and one related to Code of Conduct issues.  Investigations were ongoing in relation to 2 of the referrals.  1 investigation saw the officer involved receiving final / verbal warnings; in one case the officer left their post during the disciplinary process.  In one case, linked to the award of a Council Tax single person discount, the discount was removed and a revised bill issued amounting to £4,800.

In considering the work undertaken, the Committee were of the view that there should be a press release highlighting the work that is undertaken, particularly data matching through NFI, to identify attempts to commit fraud.

RESOLVED that the Audit and Procurement Committee note the anti-fraud activity undertaken during the first half of the financial year 2017/18 and request that an press release be made in relation to the work undertaken to identify instances of fraud.