Agenda item

Corporate Fraud Interim Report

The purpose of this report is to update Audit Committee on Corporate Fraud activity undertaken during the period 1 April – 30 September 2022.

Corporate Fraud Interim Report

A. Hodgson, Corporate Fraud Manager presented a report which updated Audit Committee on Corporate Fraud activity undertaken during the period 1 April – 30 September 2022.  (A copy of the report has been filed with the signed minutes).

Members were advised on the Single Person Discount (SPD) Project which was a proactive 2-year project launched with the aim of risk assessing and reviewing all households within Northumberland where SPD was applied to Council Tax liability.  Following review, home visits were undertaken to households identified as potentially high risk.  Early indications were that the project would meet predicted financial targets, and updates would be provided in future reports to Audit Committee.

Councillor Dale commented on the Right to Buy Scheme and the issues associated with this including the reduction in housing stock.

Members discussed the preventable activity.  It was noted the Corporate Fraud Team had worked with several external and internal departments to help assess their fraud risk and implement measures to deter fraudsters and prevent fraud and error entering the system.  However, it was widely acknowledged that prevention was a far more cost-effective measure to reduce fraud and error than detection, however it was far more difficult to measure.  

Councillor Wallace welcomed the preventable measures particularly that of the work of Planning and the Section 106 Officers regarding the more robust application process for discounted marked value sales in the private sector.  He commented that he would like to see the Corporate Fraud Team get involved in viability.  

K. McDonald, Head of Internal Audit and Risk Management reported that discussions had been taking place around developing a risk assessment for the whole organisation to look at where some targeted work on preventative measures would be best served.  Once this work was complete then a report would be drafted for Audit Committee’s attention. 

Councillor Oliver commented on the discounted market value work and felt that this scheme did not benefit many as often the homes were in an expensive area.  He reported that he would rather see a Section 106 planning condition be created that required houses to be built to rent rather than to sell at a discount.  He felt this would also help with the diminishing housing stock partially due to the right to buy scheme and the potential abuse of the discounted marked values.

Councillor Grimshaw noted that Council Tax and tenancy fraud were by far the largest areas of investigation for the Corporate Fraud Team.  Council Tax alone took up 55% of the referrals.  It was asked if Members could be provided with training on the overall work of the Team.

The Chair reported that he had been in discussions about increasing training opportunities for Audit Committee.  He reported that he would like Members to widen their knowledge and understanding of issues discussed at meetings which could only further assist Audit Committee to fulfil its role and responsibilities.  He agreed a session with the Corporate Fraud Team would be beneficial to all.  K. McDonald concurred with the Chair and suggested that the preventative plan work as well as awareness training could be added to this workstream.  He reported that discussions about how to further raise awareness of counter fraud with all employees, elected members and Audit Committee members was being looked at.  

P. Topping stated that he understood the reasons why the Corporate Fraud Team now sat more closely within Internal Audit but questioned if there were any disadvantages from moving away from the Revenue and Benefits Service.  It was reported that this was a relatively new arrangement but so far there had been no issues and was working well.  It was envisaged this change in structure would create the opportunity for a more corporate look at potential risks across the whole organisation, prioritising work on a risk basis.  By carrying out this exercise it would enable officers to see if the priority remained with revenue and benefits or wider issues and would be reported to Audit Committee once complete.

RESOLVED that Audit Committee notes and considers the update on work undertaken by the Corporate Fraud Team, as part of Audit Committee’s role in maintaining governance oversight of counter-fraud activity as part of the overall framework of governance, risk management and control.