Agenda item

This report presents to the Audit Committee the Corporate Fraud Risk Assessment 2012/2013 and Fraud Resilience Strategy 2012-2014.

Discussion:

The Audit Services Manager introduced the report advising that in November 2011 the committee had received a report from PKF regarding the council’s level of fraud resilience with a series of recommendations and an action plan for strengthening the current arrangements in place. This was timely in the current economic climate where there was the potential for an increase in fraud against the council. A Corporate Fraud Risk Assessment was being developed and the first outcome of assessments completed was now being reported to the committee.

The first assessment, at Annex A, included identified risk in certain areas, for example Blue Badges (for disabled drivers). It was emphasised that risk of fraud could not be completely eliminated and there would always be some areas at higher risk than others due to the nature of the work. The risk assessment for 2011/2012 provided a benchmark for future years.

Members questioned the value and priority the risk assessments had for the use of resources available. Officers responded that they had found this very useful as it gave a greater understanding of the workings of the council and it was a focussed, structured way in which to talk to staff. It had highlighted a lot of ‘quick wins’ about policies and strategies. It also raised awareness in teams and there were now protocols in place or being developed for working with managers.

Members also asked whether the increase in fees of £30,000 of the external auditor was related to the additional work on fraud risk assessments. The Chief Finance officer assured the committee that there was no connection. The council was one of the first to take part in this scheme, as part of the National Fraud Authority work in the public sector, as officers were aware how beneficial this work could be for the council. The Audit Services Manager advised that the fraud risk assessment being presented here was undertaken internally by her team and not by PKF.  The Fraud Manager added that the council would be scrutinised by outside bodies on this matter and that the Council would be expected to be aware of the various fraud risks and be able to show how it would respond to them.

The committee asked how officers identified fraud risk and whether all service areas in the council were included or were the areas reviewed imposed by the auditors? The Audit Services Manager advised that her team had limited resources on the time it could spend on this issue and so she planned how to spend that time carefully.   The Fraud Manager noted that some areas seemed to be at a low level but it was difficult to measure this purely in terms of financial fraud. For example, the Blue Badge scheme also allowed free congestion charge use which was a hidden saving of the scheme. Members asked that visitor’s parking badges did not seem to have sufficient controls and that these were added to the fraud risk review.

Following a question as to why schools were not included in the information within the report, Members were informed that these were kept separate from this programme as school fraud risk was reported through the Internal Audit Programme and there was a separate risk assessment being undertaken for Schools.

Officers were asked about the introduction of the fraud hot-line (on pages 93 and 99 of the agenda). The committee had recommended that this was taken forward but, following discussion under minute 952 of this agenda, there seemed to be concern at the proposal of three separate numbers (for the Benefit Fraud hot-line, the Whistleblowing hot-line and the Fraud hot-line) causing confusion for the public and staff. Officers were advised that Wokingham Borough Council’s e-mails contained a strap line with their hot-line information on it and officers were requested to look into the possibility of including this information on all the council’s external correspondence. The committee asked to be kept up-to-date on the progress of the establishment of this hot-line following approval of the Whistleblowing Policy.

Decision:

The committee agreed to:

(a)   note the Fraud Risk Assessment 2012/2013 and Fraud Resilience Strategy 2012-2014;

(b)   request that visitor parking badges are included in the fraud risk review;

(c)   request a Briefing Note on the progress of the anti-fraud hot-line.