Agenda item

Annual Fraud and Error Report 2019-20

Report of the Director of Finance


The Audit and Procurement Committee considered a report of the Director of Finance that provided a summary of the Council's anti-fraud and error activity undertaken by the Internal Audit Service for the financial year 2019-20.


The report documented the Council’s response to fraud and error during 2019-2020 and was presented to the Committee in order to discharge its responsibility, as reflected in its terms of reference ‘to monitor Council policies on whistleblowing and the fraud and corruption strategy’.


The Internal Audit Service was responsible for leading on the Council’s response to the risk of fraud and error.  The work of the team has focused on four main areas during 2019-20: Council Tax; National Fraud Initiative; Referrals and investigations considered through the Council’s Fraud and Corruption Strategy; and Proactive work. A summary of the key activity that had taken place in each of these areas was set out in the report.


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 an expectation that appropriate detail was provided around significant fraud. The following principles were applied when defining significant fraud:

  A financial impact in excess of £10,000.

  Frauds of under £10,000 could be included if the Chief Internal Auditor considered this justified by the nature of the fraud.

  In terms of establishing when a fraud had occurred, this was normally defined as occurring when the disciplinary process had been concluded, although in cases not involving employees, this would be linked to other management action, such as criminal prosecution.


In the period April 2019 to March 2020, no significant frauds had been identified.


During 2019-20, the Council received six whistleblowing disclosures. A summary of the disclosures made by type and the response was set out in a table in the report. Whilst all concerns were taken seriously, the response differed on a case by case basis. In some cases, if the disclosure had been made anonymously and insufficient details had been provided, the Council may be restricted in the action it could take. However, typically a preliminary fact-finding investigation would be undertaken which, if required, would result in a full investigation and formal action being considered.


The Chartered Institute of Public Finance and Accountancy Fraud and Corruption Tracker provided annual benchmarking information relating to counter fraud activity across all local authorities. In the 2019 survey, respondents reported a total of 755 whistleblowing cases.  The figures reported indicate that the number of disclosures received by the Council was comparable to the national average of six whistleblowing disclosures per local authority.  It was also worth noting that employees did not have to use the Whistleblowing Policy to raise concerns and were able to resolve matters using other routes if they wished, this could be through discussion with their line manager or reporting concerns to one of the “prescribed persons” set out in the Public Interest Disclosure (Prescribed Persons) Order 2014, such as the Health and Safety Executive. In 2019-20, the Council launched a campaign “I have a concern” to promote to employees’ different ways in which they could raise concerns about work, including how to raise an issue through the whistleblowing process.


Members requested information on the last SPD exercise undertaken in conjunction with 3rd party and the Chief Internal Auditor undertook circulate this to Members of the Committee.


RESOLVED that the Audit and Procurement Committee notes the anti-fraud and error activity undertaken in the financial year 2019-20.

Supporting documents: