Agenda item

Report of Internal Audit Manager.

The Committee considered the report of the Internal Audit Manager regarding the Corporate Fraud Team.

From November the Single Fraud Investigation Service (SFIS) run by the Department for Work and Pensions (DWP) would take over the investigation of housing benefit fraud for Eastbourne. As a result, the staff from the Fraud Investigation team would transfer to the DWP. Although not compulsory, the Council was actively being encouraged to investigate corporate fraud however the Council currently had no resources to carry out the work.

A report to the Council’s Corporate Management Team (CMT) on 24^th June had considered the ramifications of the implementation of the Single Fraud Investigation Service and the opportunity to create a Corporate Fraud team. It was agreed by CMT to retain all the Fraud Investigation team staff to carry out the work not taken over by SFIS and the corporate fraud work. This was ratified for the current financial year in consultation with the Leader of the Council and the Portfolio Holder for Finance.

The Fraud Investigation team cost around £270k per annum and this was funded through the Administration Grant. The Committee was advised that while the grant had been paid in full for this financial year it would be reduced for 2015/16 and cease completely for 2016/17. Other sources of funding would therefore need to be considered. A bid had been submitted in co-operation with neighbouring authorities to secure some funding from government for corporate fraud teams. Further details of possible sources of income were detailed in the report.

Following approval, from 1^st November 2014, the staff from the Benefit Fraud Team would become the Corporate Fraud Team and begin work on setting up processes and start carrying out work on trial areas. Proposals for continuing this work in 2015/16 would form part of the Service and Financial Plan which would be taken to Cabinet in December.

The Committee was advised that work needed to be carried out on job descriptions and person specifications for those affected. It was also essential that a strategy and plan of work for November to the end of March be put in place. As the Council did not have any experience of this work, research must be undertaken to decide the appropriate course of action to complete this work.

A copy of the draft action plan which detailed steps required in setting up the new section was appended to the report. The Committee was advised that should members have any comments regarding the steps in the action plan, they could be emailed to the Internal Audit Manager following the meeting. The Committee were further advised that progress on work would now be reported quarterly to the Audit and Governance Committee.

The Internal Audit Manager was asked regarding possible funding and whether money saved following discovery of a fraud could be moved to the fraud team. The Internal Audit Manager responded that money would not be moved and although it was important for the team to show income, it was important to show the benefits that the team was giving the Council as a whole. The Committee was advised that more research would be undertaken, as indicated by the draft action plan.

The Committee welcomed the proposals to address corporate fraud, following comments from Mr Lloyd Thomas, BDO at the last meeting that the Council needed stronger counter fraud measures to tackle corporate fraud.

RESOLVED: That the report be noted.