Agenda Item No
The Vale of Glamorgan Council
Audit Committee: 25th February 2013
Report of the Head of Accountancy and Resource Management
National Fraud Initiative
Purpose of the Report
1. To inform members of the Audit Committee regarding the National Fraud Initiative (NFI) 2012/13.
1. That the report is noted, and further reports are presented to the Audit Committee in order to provide updates on the progress of NFI 2012/13.
Reason for the Recommendation
1. To be informed of the progress of the NFI as part of the data match exercise in 2012/2013.
2. The National Fraud Initiative is a biennial data match exercise conducted by the Audit Commission. All local authorities have a statutory obligation to participate in this exercise. The Wales Audit Office monitor activity in Wales and they have reported that the 2008/2009 exercise produced savings of £4.5 million and the 2010/11 exercise produced savings of £6 million.
3. The purpose of the exercise is to match data sets provided by the Council with the Council's own internal data and with data sets provided by outside bodies such as other Councils across the UK, the Department for Work and Pensions (DWP), Immigration and the National Health Service in order to identify fraud and error.
4. Examples of the type of issues that matches can identify would include; payroll or pensions being matched to a current Housing Benefit claim to identify undeclared income or an undeclared person at the property; DWP deceased records identify permit holder or care home residents where permits or payments had not been cancelled after the customer passed away; Multiple Insurance claims to different Councils by the same person or families; Persons employed in 2 full time roles at the same time; Incorrect National Insurance Numbers on payroll or benefits systems.
Relevant Issues and Options
5. The Council has successfully provided the required data for the latest exercise to the Audit Commission. The data was provided in October 2012. This is in accordance with the schedule specified.
6. Data sets provided to the Audit Commission are: Payroll; Trade Creditors payment history and standing data; Housing; Housing Benefits; Private supported care home residents; Transport passes and permits - including residents parking, blue badges and concessionary travel; Insurance claimants; Licences including market traders, taxi drivers and personal licence to supply alcohol.
7. The matched data became available via a secure web application on 29th January 2013. Matches on the secure web application are prioritised based on the quality of the matched data and the significance of the match. For instance, a match of national insurance numbers is considered a top quality match, as is any match involving immigration data. In addition, a filter has been incorporated by the Audit Commission in order to identify those matches that are recommended as the most likely to lead to a result and also to enable matches with the highest monetary value and therefore the greatest potential saving, to be prioritised.
8. A total of 4,177 matches were received. Of these, 2,309 related to trade creditors and 177 are recommended matches. The purpose of these matches is to identify potential duplicate creditors, invoices and payments. An Auditor has been allocated to test these matches.
9. The remaining 1,868 matches relate to Payroll, Housing Benefit, Insurance claimants, Housing rents and licence holders, blue badge holders and of these matches 313 remained once the recommended filter had been applied.
10. Initial work on these filtered matches has commenced and results will be reported to the Audit Committee in due course.
11. It should be noted that for this current exercise there were no residential care home, residential parking permit or concessionary travel permit matches received and blue badge matches were minimal, only 9 received and all of these as a result of customers requesting a blue badge from 2 Local Authorities at the same time. The lack of matches in these areas is due to the Council's introduction of 'tell us once'. When a death is notified to Registrars permission is sought to share the information with different agencies including Council Departments and the Department for Work and Pensions. Permits can then be cancelled in a timely manner and matches with the DWP deceased records are avoided.
12. Matches include some Housing Benefit claims where Income Support or Jobseekers Allowance is in payment. Potentially fraudulent claims identified will be investigated under joint working arrangements currently in place with the DWP.
13. In October 2013, Council Tax records will be matched to the Electoral Register in order to identify cases where single person discount is being improperly claimed.
Resource Implications (Financial and Employment)
14. A Key Contact within Internal Audit co-ordinates NFI activity, ensuring that an appropriate Officer is responsible for providing each set of required data in the specified format and to a timetable set by the Audit Commission. Officers are also required to be available to review the matches when they are received.
Legal Implications (to Include Human Rights Implications)
15. The information from the Council has been provided to the Auditor General as requested under statutory powers. Relevant Human Rights and Data Protection issues have all been considered fully prior to providing the information.
Crime and Disorder Implications
16. Participation in this initiative will assist the Council in protecting the public money it looks after.
17. The purpose of the National Fraud Initiative is to identify fraud and error utilising modern data matching techniques across a wide range of participating organisations. The sanctioning of offenders, including prosecution, may follow if appropriate in accordance with the Council's Anti-Fraud & Bribery Policy.
18. Pursuing initiatives to prevent, detect and deter crime is encompassed within the terms of reference under which Internal Audit operates.
Equal Opportunities Implications (to include Welsh Language issues)
19. None as a direct consequence of this report.
20. The work of Internal Audit is intended to assist in the achievement of all corporate and service objectives.
Policy Framework and Budget
21. The proposals in this report do not contravene the policy framework or budget.
Consultation (including Ward Member Consultation)
22. No further consultation is proposed.
Relevant Scrutiny Committee
23. Corporate Resources
Helen Smith - Principal Auditor Tel: 01656 754901
External Audit Manager - Grant Thornton UK LLP
Alan Jenkins - Head of Accountancy & Resource Management