Agenda item

Click here to view a recording of this item on You Tube

 

The Senior Internal Audit explained that the report was aimed to provide the following in respect of the period April 2022 to March 2023 for areas such as Council Tax, Council Tax Reduction Scheme, Business Rates, Housing Waiting List, Duplicate invoices, False payments, Debtor Tracing activities and Internal Fraud where it arose:

 

•           Progress towards the Anti-Fraud and Anti-Corruption Key Performance Indicators assigned to the Internal Audit Department.

•           Statistical information in respect of fraud and error detection for applications and claims received by the Council deemed to have been false, incorrect, or where a relevant change in circumstances has failed to be declared resulting in a financial gain or where an error has been identified and amended.

•           Statistical information in respect of traced debts where the Internal Audit Team have been contacted for assistance.

•           Statistical information in respect of fraud and error detection for grants retrospectively identified as having been paid to customers/businesses who were not eligible.

•           Statistical information in respect of data matching activities undertaken through the National Fraud Initiative (NFI) and Norfolk Fraud Hub.

•           A look forward to 2023/24 anti-fraud and anti-corruption related activities.

 

The Committee’s attention was drawn to the following sections of the report:

 

•           Figure 1:  Fraud and Error Comparison.

•           Figure 2:  KPI Total Investigations 2022/2023

•           Figure 3:  Detailed overview of Fraud and Error detected 2022/2023.

•           Figure 4:  2022/2023 Identified Fraud/Errors.

•           Figure 5:  2022/2023 Debtor/Absconders.

•           Figure 6:  Project Return on Investment for First 3 Years.

•           Figure 7:  2022/2023 Overall Data Matching Processing Progress.

•           Section 3:  KPI – Financial Investigation Provision.

 

The Senior Internal Auditor outlined the joint working cases undertaken with other organisations.  

 

The Committee’s attention was then drawn to the following sections of the report:

 

•           Section 5:  Overview of Fraud/Error Detection.

•           Section 8: Comparison Data to Previous Years and other Local Authorities.

•           Section 11:  Single Person Discount Project.

•           Section 12:  Overall Data Matching Activities.

•           Section 13:  Covid-19 Business Grants.

•           Section 14:  Other Schemes.

•           Section 15:  Anti-Fraud and Anti-Corruption Culture

•           Section 16:  Projects/Future Pipeline of Activities.

 

The Chair thanked the Senior Internal Auditor for the report and invited questions and comments from the Committee, a summary of which is set out below.

 

The Senior Internal Auditor responded to questions from Councillor Jones on the different types of data matching exercises undertaken by the Council which went through the National Fraud Initiative which was Cabinet Office led and undertaken on an annual and bi-annual basis which was fed into 300 million figures nationally based on set data specifications.

 

Councillor Bearshaw asked if there was a reason for the increase in fraud over the last 3 years.  In response, the Senior Internal Auditor explained that compared to the 2021/2022 the results for 2022/2023 had seen a significant increase in volume detection which was largely due to the backlog of data matches which accrued during 2020/2021 and 2021/2022 because of the covid-19 pandemic.  The position had now been recovered as set out in Figure 4 of the report.

 

Following further questions from Councillor Bearshaw on the workload increase and staff resource available, the Revenues and Benefits Manager explained that as part of the Norfolk County Council Funding the Borough Council had negotiated funding to support 1 FTE Inspection Officer (additional resource in addition to the current staff level) within the Revenues Department which the Internal Audit Fraud Service was able to access to assist with the processing of changes/amendments to Council Tax and Business Rates accounts.

 

Following further comments from the Committee, the Assistant Director, Resources explained that the Council was in the process of recruiting an apprentice to the team to receive training and who would undertake lower administrations tasks in order to free up capacity for officers to carry out high level investigations and progress would be reported back to the Audit Committee.

 

In response to questions from Councillor de Winton on a financial investment for in-house financial investigator, it was noted that only Norfolk County Council had the in-house provision for a financial investigator across all Norfolk Councils.  The Senior Internal Auditor explained that research had been undertaken to look at the available options outside of the Council to buy in the required skills.  It was highlighted that the Council was in discussions with outside organisations but currently indicated they were not able to assist at the current time.

 

In response to further questions from Councillor de Winton on the monies under the Council’s guardianship/scale as set out below:

 

•           What was the percentage of leakage?

•           How did the Borough Council compare to other local councils of a similar size?

•           What was deemed nationally to be an acceptable level of leakage?

 

The Revenues and Benefits Manager explained that in relation to the Single Persons Discount error there was an error of £200,000 equating to 0.177% from a collectable amount of £112.5m - the Council paid over £80m in business grants and an error identified of £138,000 was very low.

 

Following further questions from Councillor de Winton on Section 8 and comparison data to other local authorities, the Senior Internal Auditor explained that in his personal opinion Anglia Revenues Partnership was the flagship of fraud investigation in the way there were set up in this area.

 

Councillor Devulapalli commented it would be useful to have a glossary to explain the acronyms used in the report.

 

The Senior Internal Auditor explained that fraud awareness e-learning packages had been rolled out to officers in November 2022 and would form part of the Members Induction training following the May elections.

 

It was noted that the Senior Internal Auditor continued to be a member of the Cabinet Office’s Fraud Hub user group.

 

Following questions from Councillor Coates on debt tracing activities and how much the cost was to recover the debt even if no monies were recovered, the Senior Internal Auditor undertook to circulate the amounts paid back against the traced debts to the Committee. Also that the relevant systems and access and training was being delivered across the organisation and this will continue with a view to reducing the administration and involvement of the Internal Audit service.

 

At the invitation of the Chair, the Portfolio Holder for Finance commented that as the Borough Council collected taxes including the Police, could pressure be placed upon the police authority to support the Borough Council more.  In response, the Senior Internal Auditor explained that the Borough Council had not approached the policy authority for funding but was a valid point to take up.

 

The Senior Internal Auditor responded to questions from the Chair on the level error identified as there had been no fraud criminal prosecutions.

 

In response to further questions on the return of investment was measured, the Senior Internal Auditor referred to Figure 1 -The overall fraud and error over the previous 3 years and what was set out in return on investment in Figure 6 was the project on the Single Persons Discount which was funded through Norfolk County Council and was specific to that project and showed that over that period of time had identified the majority of fraud and error set out in Figure 1.

 

Following a further question from the Chair on return on investment, the cost of the work and income coming back in, the Senior Internal Auditor undertook to email details of the calculation to the Committee.

 

The Chair referred to 7.2 the total value of £20,266.83 of debt traced and passed back to the relevant departments for recording purposes, which had included one case where an initial advice charge of £2,000 and potential for additional costs to be incurred, the Senior Internal Auditor explained that that was an unusual case and undertook to email the confidential details to the Committee.

 

The Chair invited the Portfolio Holder for Finance to address the Committee.  Councillor Morley commented that it would be useful to have a summary of amount collected and amount of fraud and errors detected and would be useful to know was how much identified, against what, the cost and who was paying for it.  The Chair stated this was a point well made.

 

In response to questions from the Chair on internal audit generating income and providing assistance on a paid basis, the Senior Internal Auditor explained that income generated related to the prevention of Social Housing Fraud Act offences which was tenancy frauds for housing associations on an ad hoc basis when the Council was approached.  The Senior Internal Auditor added that the Council had to be particular with its resources and the main income was generated from in-house work.  If there was an additional workload it would be necessary to consider how it would affect the fraud resource but also potentially the internal audit plan resource to deliver the work.

 

RESOLVED:  The Committee noted the update of the anti-fraud and anti-corruption work.