Agenda item
Anti - Fraud Update 2012
- Meeting of Replaces Postponed Meeting 9 October 2012, Standards Advisory Committee, Wednesday, 17th October, 2012 7.30 p.m. (Item 4.1)
- View the background to item 4.1
Minutes:
Mr Tony Qayum, Corporate Fraud and Governance Manager, presented the report and introduced Ms Sue Oakley, who covered work on the National Fraud Initiative (NFI) as his deputy.
Mr Qayum commented that the report included appendices relating to:
· Annual Fraud Report
· Fraud Survey Benchmarking exercise undertaken by the Audit Commission
· National Fraud Initiative
These activities had been recently reported to the Audit Committee and were now put before the Standards (Advisory) Committee in order to focus on the ethical matters arising, rather than on the controls, checks and balances already in place, and as a review to confirm that an appropriate level of governance had been established.
The report also included the annual briefing letter from the Audit Commission, which was complimentary on the whole.
Mr Qayum added that the NFI documentation was very detailed to demonstrate the processes involved, which took up a huge amount of staff time. It was necessary to demonstrate that there had been compliance with proper procedures to acquire information and that communication had been undertaken with other colleagues and organisations.
In response to queries from Members, Mr Qayum stated that:
o The Council’s operational systems of risk management and control were addressed in the Audit Commission report and the Committee had been given details of irregularities that had been identified.
o The sum of £7.8m shown as tenancy fraud was a notional amount based on the actual losses to the organisation for which recovery was being sought. Where housing properties were recovered, a notional value of £200,000 per unit formed part of the recovery calculations as an indicative value.
o The estimated figure of £8.7m for detected fraud in 2010/11 was not included as a budgetary activity and did not impact on the budgetary process.
o The checklist for action proposed by the Audit Commission would be utilised and a response had been prepared last year on a similar basis, which had been submitted to the Audit Committee. It was hoped that there would be the opportunity to develop a threat assessment check and test corporate systems further.
o Tenancy fraud involving Registered Social Landlords (RSL) was also addressed by the Subletting Team and approximately one third of recovered properties had related to RSL units.
o Notifications of RSL tenancy frauds were received from a range of sources and there was good communication between the Council and the RSLs. Each referral was the subject of much desk top research to make a proper assessment of the likely amounts to be recovered. There might be a period of a year before an outcome was achieved but all referrals would be processed.
o The Council received grant funding from the DWP to deal with Housing benefit fraud on their behalf and there had been a suggestion that there would be a single fraud investigation service from 2017. Tower Hamlets was more successful in this field than most other local authorities and future outcomes would be reported to this Committee as well as the Audit Committee.
o The dismissals of staff in connection with fraud had not previously been reported but demonstrated that security systems were working. There was currently insufficient information to show how the Council compared with other authorities in this respect but it was not considered that Tower Hamlets would stand out highly, in view of the number of staff employed.
Having considered the report, the Committee recommended that:
1) The Council should continue to commission detailed review reports on how the Council was dealing with the risk of fraud from the Council’s external auditor on an annual basis.
2) That Officers adopt the checklists for action as suggested by the Audit Commission in connection with anti-fraud work and maximising the benefits of NFI, as set out in pages 33 and 81 respectively of the report.
RESOLVED
That the report be noted and Officers take appropriate action on the recommendations of the Committee.
Supporting documents:
- Anti Fraud Update 2012 Cover Rept TQ2609121812pm, item 4.1 PDF 131 KB
- Anti Fraud Update 2012 Appx 1 An Frd Rept TQ2609121812pm, item 4.1 PDF 103 KB
- Anti Fraud Update 2012 Appx 2 Fraud Brfg TQ2609121812pm.doc, item 4.1 PDF 221 KB
- Anti Fraud Update 2012 Appx 3 NFI TQ2609121812pm, item 4.1 PDF 136 KB
- 6.5b AC - NFI 2010-11 Sep 12 Committee report Appendix A, item 4.1 PDF 1 MB