Agenda item

This report provides an update on the National Fraud Initiative (NFI) exercise.

Discussion:

The Head of Internal Audit and Counter Fraud Shared Service introduced the report which provided an update on the Nationwide matching exercise conducted by the National Fraud Initiative.

Members then raised a number of questions and comments which included:

• National Fraud Initiative (NFI) – it was commented that the NFI was undertaking significant work on Covid fraud investigations and given that the Council had received Covid funds from the Government, it was noted that there had been minimal Covid fraud investigations carried out by the Team. It was asked what scale of fraud reviews had been undertaken against the funds paid out to small businesses and persons. The officer said that a number of cases had been investigated, the majority of which were not validated. There had been occurrences where funds had been paid out as a result of submission of duplicate applications, these had been identified and the funds recouped.

At the beginning of the Nationwide Business Grant scheme, the message was to distribute the funds quickly and this approach caused problems nationally due to checks not put in place to minimise risk. Medway took a different approach and ensured frontline processes were put in place to mitigate risk which resulted in limited numbers of fraudulent cases.

• Benchmarking - in response to a question on whether any benchmarking had been done against other Local Authorities on their experiences, the officer said that he would approach colleagues across the county to get an idea of their matches and results.

• The Chief Operating Officer reiterated that Medway’s deliberate policy to exercise usual practice over distribution of public funds assisted in ensuring the limited instance of fraudulent cases.

• Checks put in place and lessons learnt – in response to a question on when the last review of checks conducted by an external company took place and the re-couped costs, the Chief Operating Officer advised that exercises were conducted periodically by a company who looked for errors in the Councils purchase ledger, the amount recouped varied.

It was asked what lessons had been learnt and how confident officers were in the robustness of the measures in place to mitigate risks. The Chief Operating Officer advised that as part of a review of processes, a number of errors had been identified and stringent checks had been put in place to identify errors going forward.

In response to questions on how much work had been undertaken to identify fraudulent cases and what percentage was identified, the officer said that whilst there had been errors detected in the systems, fraudulent cases had not been identified. There had been an error of duplication of payment of £10000 business relief grant which has been recovered. Assurance can be taken from the fact that at the height of the pandemic the team had been redeployed to frontline to undertake validation of the grants. Quarterly returns were being sent to the Department for Business Energy & Industrial Strategy on the eight different schemes the Council was involved in which meant the Council was being heavily scrutinised on its assurance processes.

Decision:

The Committee noted the content of the report