Agenda item
Internal audit final progress report
This report summarises the work of Internal Audit and the Investigation Team and provides an update on progress since the previous report to this Committee on 19 March 2014. Appendices including Brent fraud briefing have been attached to the covering report.
Minutes:
The Committee considered a report that summarised the work of Internal Audit and Investigation Team and provided an update on progress since the previous report to this Committee on 19 March 2014. In outlining the key points, Simon Lane, Head of Audit and Investigations stated that 81 draft (both Mazars and in-house output) against a planned total of 83 individual projects, (representing 98% of the planned output) and 59 final reports (representing 71% of total projects), were issued. He continued that out of the final reports issued to date for which assurance opinions were relevant there had been 1 full; 31 substantial and 19 limited assurance opinions. He drew members’ attention to the summary report setting out the completed audit work attached as appendix 1 to the report and progress achieved on various investigations by the team to date.
In respect of housing benefit fraud, Members heard that the team completed full investigations into 109 cases and identified fraud in 67 of them resulting in 26 individual prosecutions. In addition, 20 cases had administrative penalty (of up to 30% of the value of the overpayment in addition to the overpayment) applied. The team identified housing benefit (HB) and Council tax benefit overpayments in excess of £1.1m which were being recovered and 21 additional cases where no sanction was applied. He continued that there was an overall reduction in cases investigated (40%) due to a number of factors including a reduction in staff dealing with HB fraud, more complex enquiries and fewer multiple claim frauds. The team also completed 222 investigations into housing tenancy fraud and recovered 46 properties, primarily as a result of identifying unlawful sub-letting. On blue badge fraud, 30 cases were investigated and identified 26 cases of fraud/irregularity which resulted in 10 prosecutions.
Simon Lane updated the Committee that 44 cases of internal fraud involving staff were investigated which resulted in 10 dismissals. Other external fraud relating to a case involving direct payments across two councils was successfully prosecuted and was set for asset recovery, however the death of the fraudster whilst serving his sentence meant that recovery was no longer deemed viable.
Aktar Choudhury, Operational Director of Planning and Regeneration attended the meeting to update members on how his department progressed the recommendations made in the audit of Section 106 legal agreements (s106). He started by explaining that s106 was a legal agreement between local authorities and developers, which were usually linked to planning permissions. They were also sometimes known as planning gain, planning benefits, community benefits or planning obligations and were used when there was a requirement to mitigate the impact of a development and the impact itself. Where they were required, developers would normally be expected to complete any s106 agreement before permission can be issued. The Operational Director of Planning and Regeneration continued that the introduction of the Planning Act 2008 and the Community Infrastructure Levy (CIL) Regulations 2010, as amended, would result in significant changes to the way that developments contributed towards the provision of infrastructure required to support sustainable growth across the borough.
Instead, in the future, the Council would seek to secure contributions towards infrastructure through the imposition of a CIL. Despite the changes to infrastructure funding, s106 agreements would continue to provide a valuable means of securing other site specific mitigation required in order to make developments acceptable in planning terms.
In respect of the audit, the Operational Director stated that the key issues identified relate to policies and procedures for the monitoring and enforcement of obligations and enforcement activity to chase up outstanding obligations. At the time of the fieldwork, there were 20 cases (totalling £2,612,550, without RPI) where reminder letters had not been sent out even thought the income was not received after 30 days. Members noted that since the issue was raised, the Monitoring and Compliance Officer had taken steps to address the overdue contributions and as at 3rd April 2014, the total balance of payments not received after the 30 day deadline had reduced to £504,850 (without RPI). He assured the Committee that the department would take forward the recommendations set out in the report.
In welcoming the report, the Committee asked that a breakdown of the Council’s receipts for Section 106 legal agreements be made and circulated to all members.
RESOLVED
that the progress made in achieving the 2013/14 Internal Audit Plan and the review of fraud work be noted.
Supporting documents:
- 4. Final internal audit progress report 2013-14 - Cover, item 9. PDF 204 KB
- 4.1 Internal Audit Progress Report appendix 1, item 9. PDF 240 KB
- 4.2 Internal Audit Progress Report Appendix, item 9. PDF 55 KB
- 4.3 Appendix Brentfraudbriefing202012-13, item 9. PDF 531 KB