Agenda item

(To receive a report from Dianne Downs, Team Leader – Audit, which provides information on the overall effectiveness of the Authority's arrangements to counter fraud and corruption and reviews the delivery of the 2016/17 counter fraud work plan)

Consideration was given to a report which provided the Committee with information on the overall effectiveness of the Authority's arrangements to counter fraud and corruption and reviewed the delivery of the 2016/17 counter fraud work plan.

Members were guided through the Counter Fraud Work Plan and were provided with the opportunity to ask questions to the officers presented in relation to the information contained within the work plan, and some of the points raised during discussion included the following:

·         It was queried whether officers would agree that fraud was a manifestation of a breakdown of internal controls.  Officers stated if a person was very determined to carry out a fraud they would find a way around whatever controls were in place.  it was acknowledged that a poor control environment could increase the risk of fraud and error.

·         It was queried whether the internal controls for the checking of new staff needed to be more robust.  Members were advised that Serco had increased the controls in terms of recruitment.  This work had not yet been followed up by Internal Audit, but verbal assurance had been given.

·         It was commented that there had been an increase in referrals relating to schools budgets and two schools had been given low assurance and it was queried what assurance could be given that action would be taken going forward.  Members were advised that this would be done through the Schools' Forum who should raise awareness and help ensure that appropriate controls were put in place by the school.

·         In terms of past event analysis, did officers look at what could be done in future to prevent the same situation occurring again.  It was confirmed that if weaknesses in controls were identified, the counter fraud team would work with management to strengthen controls as well as working with the police to pursue a prosecution.

·         It was queried how many of the frauds were preventable and commented that there was a need to ensure that there was a proportionate response.  It was acknowledged that a poor control environment could increase the risk of fraud, so it was important to raise awareness, it was noted that the Council also had a whistleblowing policy which was being promoted.

·         It was commented that a lot of the actions in the plan were outstanding at the end of the year and it was queried when these actions would be complete.  It was confirmed that a lot of these actions had been rolled forward into the current plan and the investigations inevitably impact delivery of the plan. 

·         It was confirmed that internal messages were going out to staff and high risk areas were being targeted first.  It was queried whether these actions should instead be marked as ongoing rather than outstanding.  However, it was noted that these actions were outstanding at the end of the financial year.

·         It was noted that if a particular area was targeted for fraud awareness there would be a spike in the number of referrals.  If fraud intelligence was received then officers would focus more on that area.  The more awareness work was carried out, the more referrals were received.

·         It was highlighted that there was a difference of £240k between the amount of duplicate payments made to suppliers and the amount recovered.  It was noted that many of these payments had been offset against future supplier payments.  Members were also advised that the level of duplicate payments had dropped off with the requirement for purchase order numbers being tightened up.

RESOLVED

            That the overall effectiveness of the Council's arrangements to counter fraud and corruption and the progress made to implement policy be assessed as good.