Agenda item

Report of External Auditors BDO.

The Committee considered the report of the Council’s external auditors, BDO regarding the key findings in respect of the certification of grant claims and returns for the financial year 2012/13.

Mr Lloyd-Thomas from BDO was in attendance and presented the report.

The Committee was advised that the indicative scale fee for certification work had been initially set at £21,900 by the Audit Commission. This had been increased by the Audit Commission by £450 to incorporate fees for the annual final report of the findings of the certification work. Mr Lloyd-Thomas reported that there had been no other variations of the scale fee as a result of the work undertaken.

BDO had certified three returns on behalf of the Council which included housing and council tax benefit subsidy, national non-domestic rates return and pooled housing capital receipts. The value of claims and other returns certified for the financial year had amounted to over £58 million.

During the initial testing of the housing and council tax benefit subsidy, a number of errors had been identified. On completion of additional testing, it was concluded that several amendments were required.

Regarding non Housing Revenue Account (HRA) tenancy type misclassification, testing of all cases recorded as non-self contained accommodation found six cases, valuing £12,651 that should have been included as self contained accommodation. This had been subsequently corrected in 2013/14 by the Council’s Benefits Team and had been accepted by the Department for Work and Pensions (DWP). 

BDO had tested all eligible non HRA overpayments and found 22 cases, valuing £4,271 that should have been recorded as technical overpayments. As these were not funded and eligible overpayments attract subsidy at 40%, DWP had informed the Council that it intended to withhold £1,708 of subsidy.

Initial testing of eligible overpayments for council tax benefit found 3 errors from 6 overpayments that should have been recorded as technical overpayment. Testing of 40 additional council tax benefit overpayments found a further 6 cases that had been misclassified. The total amount potentially misclassified was £43,997. The DWP had informed the Council that it intended to withhold £17,599 of subsidy.

BDO’s review also found that the Council had not reconciled benefit entitlement awarded to paid benefit, resulting in an unreconciled net difference of £8,002 that remained in the subsidy claimed.

Appendix 1 of the report showed the conclusions from BDO’s work and recommendations to the Council on how to improve their arrangements for preparing grants and other returns, in addition to the Council’s progress against the agreed 2011/12 actions.

Mr Lloyd-Thomas thanked the Council’s Benefits and Internal Audit Teams for their co-operation and support and expressed his appreciation of their assistance provided during the course of the certification work.

The Revenues and Benefits Manager addressed the Committee and advised that the recommendations set out in the report had been taken onboard. Monthly reports of overpayments were now being produced which would highlight any areas of concern that may have previously arisen. All work would subsequently be completed by the end of the financial year.

The Committee expressed its appreciation with the arrangements in place to resolve the issues raised.

RESOLVED: That the Grants report for 2012/13 be noted.