Agenda item

(To receive a report from Lucy Pledge, Head of Internal Audit and Risk Management, which provides the Committee with details of the audit work completed to 31 July 2021 and updates on the progress of the audit plan)

Consideration was given to a report presented by Head of Internal Audit and Risk Management which updated the Committee with details of the audit work completed to 31 July 2021 and the progress of the audit plan.

Members observed the increase in debt from £9.4 million to £23 million from January 2018 to March 2021; in addition, concerns were raised regarding the disputed values of the debts and their decisions pending. It was clarified that debt in January 2018 was actually £11.6 million due to the additional £2.2 million debt carried on from the previous finance system. In addition, the figures over 2017/18 ranged from £20.5 million to £10.9 million, largely due to transactions between the Council and the CCG. However it was appreciated that £6.7 million of the £18.7 million of debt outstanding of August 2021 was over a year old, suggesting a problem with debt collection. This was registered as a key priority within the finance team in 2017/18, with system improvements made since that time. Some of the oldest debt had already been cleared despite impacts from Covid-19 and competing resource priorities from adult social care grants. Officers weren't complacent and resolved to improve the debt position further while acknowledging the uncertainty of improvement expectations. Adult social care made up over two thirds of the Council's debt while the nature of those services presented challenges to debt collection.

Further, service users' financial positions needed to be considered as to not send them into financial distress. Members were advised that all of the targets set out in the plan, probably wouldn't be achieved for the next audit in spring 2022. Recent new schemes, such as the social care levy, would add further challenges to the targets. Officer intended to be as open and transparent as possible, sharing the action plan with senior officers and publicising the key areas of activity. Within adult care, a monthly cash flow was agreed at the beginning of every financial year, with an agreed date, which was adjusted throughout the year. The Council's credit control function was carried out externally, through Serco, and measured by Key Performance Indicators (KPIs) which were subject to financial penalties. An increasing amount of debt was disputed, which was excluded from KPIs.

While appreciating the personal circumstances of some social care users, Members emphasised that debts did indeed need to be collected wherever possible to avoid worsening situations.

Members were advised that the Council was shifting from an arrangement of the care homes collecting contributions from residents with the Council paying the remaining balance, to the Council paying the full fees but collecting the contributions directly from service users later. Discussions had been undertaken with care homes to identify the level of service user debt. Proactive work was also proceeding to ensure service users could contribute in the most convenient ways possible. A project team, overseen by the Executive Director of Adult Social Care, is seeking to successfully embed the move to gross payments in 2022/23.

The Committee suggested that preventative measures were explored through appropriate and timely assessment, in addition to appropriate and rational conversations with service users and their families. It was advised that the contributions from services users were expected within a timely manner to avoid debt becoming more problematic. A close working relationship was essential with Serco to ensure adequate outstanding debt mitigation.

Councillor Whittington, Executive Support Councillor - Resources, Communications and Commissioning) observed that, given adult social care demographics, service users often passed away with outstanding debts to the Council. He asked if the Council make any claims against deceased service users' estates. Furthermore, if a service user had already passed away and their estate had been devolved, were debts written of given there would likely be little opportunity for recovery. It was advised that when a review into outstanding debt was undertaken, the oldest debt was considered first. Now, however, outstanding debts were pursued within the 0 – 30 day period to avoid falling into older and more challenging debts in the future. Processes were being implemented including finance champions within Adult Social Care and a debt review group.

Members asked if care couldn't be afforded at the time of need, could potential service users take a charge put upon their property. It was advised that, where eligible, processes were in place to secure payments against properties. Where ineligible, instalment agreements were agreed.

Members asked if service directors and Serco should be available to answer the Committee's questions. The importance of financial assessments was agreed by officers. Members were advised that the strategic team would be meeting with the Executive Director of Resources and the Executive Director for Adult Care and Community Wellbeing to discuss the control actions surrounding this risk. A briefing paper would be subsequently brought to the Audit Committee.

RESOLVED

          That the comments of the Committee be noted.