Agenda item

This report seeks endorsement from the committee for the proposed Counter Fraud & Corruption Strategy and to recommend Council approval.

Discussion:

The Head of Internal Audit & Counter Fraud introduced the report. He explained that the Counter Fraud and Corruption Strategy was subject to annual review, but Member approval only sought when significant changes were required. This was the first significant change since 2022.

Changes to the strategy were required following the Economic Crime and Corporate Transparency Act 2023 which created a new offence of failure to prevent fraud. The offence would occur where a large organisation benefited from the fraud of an employee and had failed to put in place reasonable measures in place to prevent that fraud.

The strategy had been rewritten to provide clarity and a clear policy statement by management to set expectations and make the strategy more understandable for staff. The Head of Internal Audit and Counter Fraud added that the Service had undertaken a self-assessment of against Home Office guidance which would be considered by the Audit Committee in October 2025.

The following issues were discussed:

Audit Procedures – a Member commented on a recent high-profile incident in another authority and asked what measures were in place to prevent similar incidents of fraud in Medway. The Head of Internal Audit and Counter Fraud stated that regular Internal Audits were undertaken to assess effectiveness of internal controls, and there was also assessments of fraud risk as well as fraud awareness training for staff. Council procedures also ensured effective segregation of duties to prevent members of staff having the ability to carry out fraud, however fraud was often found where staff became complacent, so vigilance was required.

Self-Assessment - further information was requested regarding the outcome of the self-assessment, the Head of Internal Audit and Counter Fraud stated that the only defence for organisations was to have appropriate procedures in place to prevent fraud. The self-assessment was based on guidance provided by the Home Office and the results were largely positive. A number of actions had been identified to enhance the protections already in place.

In response to a question about how the service was raising its profile, the Head of Internal Audit and Counter Fraud stated that the service offered monthly counter fraud awareness training and also team specific training. The service also carried out annual surveys on the work of the teams, with the Internal Audit surveys aimed at Service Managers and Assistant Directors who had the most contact with the team and the Counter Fraud survey was for all staff. Once agreed, the Counter Fraud strategy would to be sent to all staff via Meta compliance to raise awareness of the issue. The Member commented that the team provided an excellent service and encouraged Members to take an active part in such surveys.

The Committee discussed the proactive Counter Fraud work currently undertaken by the service. This included investigation of misuse of Blue Badges with Civil Enforcement Officers. Fieldwork undertaken earlier in the year had found 25% of badges had been misused, which compared with 20% nationally. Education had been provided to Civil Enforcement Officers in ongoing enforcement and further similar fieldwork would be undertaken in the future.

It was asked what the trigger was to provide action from the service.

The Head of Internal Audit and Counter Fraud stated that allegations received by the service were triaged then prioritised for investigation based on the quality of information received. The team also undertook proactive work in areas of high risk such as tenancy fraud.

Decision:

a)    The Committee considered the Counter Fraud & Corruption Strategy document presented at Appendix 1 and recommended approval by Full Council.

b)    The Committee agreed that when the Internal Audit and Counter Fraud Service provided surveys to the Council, Members be encouraged to take part.