Agenda item

The CE introduced the item and informed Members that the Policy had been updated as a result of audit recommendations related to the limited assurance ratings given across the Consortium. He added that the authority would reflect upon both internal and external sources of potential fraud, including benefits payments, sole occupancy Council Tax discounts, Covid grant payments, hardship payments, and the conduct of officers in relation to the receipt of gifts, expenses and/or relationships. It was noted that awareness of potential risks had been addressed, and mitigation measures were in place through the Whistleblowing Policy and National Fraud Initiative. The CE stated that resourcing of mitigation measures had been discussed, though staff were trained to identify fraud, and whilst management were confident that the authority was not exposed to significant risk, further robust training would be arranged for all Revenues, Benefits and People Services staff. It was noted that managers would be asked to give greater consideration to risks of potential fraud, with action taken where necessary, alongside continued data sharing with the National Fraud Initiative. The CE stated that CLT would continue to monitor potential fraud risks, instigate additional training, and review the situation on an annual basis to assess whether any further resource was required, which Internal Audit considered acceptable. On internal fraud risks, it was reported that the payroll system had been strengthened, and the MO maintained a register of gifts and hospitality for staff and elected Members. The CE noted that a corporate Counter-Fraud Awareness Action Plan was included in appendix 3 with a summary of risks and actions, alongside a risk assessment with a RAG rating system.

Questions and Discussion

       i.          Cllr C Cushing asked whether any engagement had taken place with other authorities in the area to find learning opportunities. The CE replied that the Consortium had established that there were learning opportunities and improvements that could be made, and conversations had taken place prior to Covid-19 on the possibility of a creating a combined anti-fraud team to cover all authorities. He added that this had not been pursued as a result of Covid-19, but could be reconsidered in the future. Cllr C Cushing referenced comments in the report on robust training, and asked whether annual training was provided to update and maintain existing knowledge. The CE replied that Revenues and Benefits were two of the largest teams at the Council, and there was therefore a degree of staff turnover that required training to be provided as part of the induction process. He added that refresher training had not been provided recently as a result of Covid-19, though the HR Manager had been asked to address this by the year-end.

      ii.          Cllr S Penfold referred to risk categories and asked how the RAG ratings had been determined, and whether they were based on previous instances of fraud, the likeliness of fraud, or the level of impact. The CE confirmed that it was a combination of all factors that had been used to determine the RAG ratings. Cllr S Penfold asked whether the red risks had previously occurred, to which the CE replied that the Council Tax and Business Rates fraud risk was a response to the £28m lost nationally. He added that the demographics of the District meant that it was less likely to occur in North Norfolk, and many small businesses were eligible for rates relief, but the risk assessment still took into account national risks. It was noted that the number of referrals from NNDC to the National Fraud Initiative were very low, and risks should seen in that context.

     iii.          Cllr H Blathwayt referred to the Covid-19 grants risk, and noted that nationally there had been well publicised cases of fraud, and asked whether there were any known cases in North Norfolk. The CE replied that the national issue centred around the business loans scheme, whilst business grants had not been subject to the same level of concern. Cllr A Brown noted that the Council had won an award for administering approximately £130m of Covid-19 business grants, and asked whether this was evidence of the Council’s confidence in its fraud mitigation measures. The CE replied that the recognition shown by the award and comments received from Government were based on the Councils performance in relation to the speed and efficacy of payment, and all local authorities were now subject to ongoing reporting of fraud and expenditure related to these payments. He added that he was not aware of any significant fraud related to payments made in North Norfolk, though the Council had made nine referrals to the National Fraud Initiative, to which they notified the Council of £3500 Housing Benefit fraud. It was suggested that on this basis, a future decision would need to be made on how much to invest in fraud prevention, beyond the continuation of robust training and existing mitigation measures.

    iv.          Cllr L Withington referred to the counter-fraud processes, and asked whether consideration had been given to the additional pressure any investigations would place on officers and Internal Audit, whilst dedicated resource was not in place. The IAM replied that Internal Audit were able to provide this service, as the workload did not present an unmanageable burden. The CE noted that in the past two years there had only been one instance in which Internal Audit’s services had been required to undertake an investigation.

      v.          The recommendations were proposed by Cllr C Cushing and seconded by Cllr P Butikofer.

RESOLVED

1.     To Approve the updated Fraud and Anti-Corruption Policy.

2.     To note the associated Fraud Risk Assessment for 2021/22

3.     To note the recommended improvement actions

4.     To note the progress on the audit actions.