Agenda item

Update attached.

Officers informed the Committee that the counter fraud section produced a work plan annually which detailed the broad areas of work that would take place. The plan had to be responsive to demand as it was not possible to predict precisely the areas that would require investigation. In developing the plan consideration was given to the national fraud picture both in terms of estimated fraud losses, the areas of emerging fraud risks and the local control environment.

The counter fraud team carried out investigations to a criminal standard with the aim of applying a suitable sanction and enabling the council to recover any losses. The audit service also had a role to play in assisting in providing assurance over the control framework and might carry out specific pieces of work that supported the counter fraud agenda.

Historically, the Audit Commission had produced more detailed work covering local government in their publications around Protecting the Public Purse.  Unfortunately, the Audit Commission team had been disbanded and the survey used to populate Protecting the Public Purse was no more. However, CIPFA had published a document ‘CIPFA Fraud and Corruption Tracker’, based on survey responses from a large number of local authorities.

The largest type of fraud according to value was Housing related. This was true in Havering and the Housing Tenancy Counter Fraud project had delivered real results in this area.

The largest source of fraud in pure numbers of attempt related to Council Tax discounts and Housing Benefits.  In recent years, councils had shifted their focus from benefit fraud to non-benefit fraud due to the transfer of all benefit investigation from councils to the Single Fraud Investigation Service (SFIS), run by the Department for Work and Pensions. 

CIPFA recommended the following:

Public sector organisations should carry out fraud assessments regularly and have access to appropriately qualified counter fraud resources to help mitigate the risks and effectively counter any fraud activity.

All organisations should undertake an assessment of their current counter fraud arrangements.

In line with the Fighting Fraud and Corruption Locally Board suggestion, local authorities should examine and devise a standard and common methodology for measuring fraud and corruption. Once it had been agreed, local authorities should use the measure to estimate levels of fraud and corruption.

It was as important to prevent fraud that had no direct financial interest, such as data manipulation and recruitment, as it was high value fraud

Organisations should develop joint working arrangements where they could with other counter fraud professionals and organisations.

Public bodies should continue to raise fraud awareness in the procurement process, not only in the tendering process but also in the contract monitoring element

Authorities should ensure that anti-fraud measures within their own insurance claims processes are fit for purpose and that there was a clear route for investigations into alleged frauds to be undertaken.

Taking all these considerations into account officers had produced a Fraud Plan for 2017/18.

This was year 3 of the Fraud Team being a oneSource shared service and the Fraud Plan for 2016/17 had seen a new partner join the team in the form of London Borough of Bexley.

This brought extra resources into the team and the added benefit of sharing best practice across all the partners building on the experience of sharing across Newham and Havering that had built up over the past year

The plan for 2017/18 encompassed the three themes taken from the government’s fraud strategy Fighting Fraud Locally and takes account of the estimated fraud losses and emerging fraud trend. The three themes were:

·    Acknowledge - Assessing and understanding fraud risks, committing support and resource to tackling fraud, maintain a robust anti-fraud response.

·    Prevent - Making better use of information technology, enhancing fraud controls and process, developing a more effective anti-fraud culture.

·    Pursue - Prioritising fraud recovery and the use of civil sanctions, collaborating across local authorities and with local law enforcement agencies.

Counter fraud resources would be stretched again in 2017/18 although we had now recruited to the agreed establishment and had been utilising temporary workers where necessary. The sections resources were organised to enable data matching and data analysis to take place to try to detect frauds at the earliest stage possible. This year would see us uploading data sets from Havering’s data warehouse onto a system known as IDIS and performing matching exercises from this data to offer a level of assurance as well as an investigative pool of work. 

Most of the resources were devoted to carrying out investigations to a criminal standard. The team also had capacity for financial investigations which were undertaken in accordance with the Proceeds of Crime Act and could enable the council to claw back funds from criminals in certain circumstances.

The Committee noted the Fraud Plan for 2017/18.