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Agenda Item No 10

 

The Vale of Glamorgan Council

 

Audit Committee 26th November 2013

 

Report from the Head of Accountancy & Resource Management

 

National Fraud Initiative (NFI) 2012/13

 

Purpose of the Report

1.         To update Members on the Council's response to the 2012/13 Audit Commission's National Fraud Initiative (NFI).

Recommendation

THAT the Committee gives due consideration to the content of this report to ensure that all aspects of their core functions are being adequately reported.

 

Reason for the Recommendation

To keep the Audit Committee informed.

 

Background

2.         The National Fraud Initiative (NFI) established by the Audit Commission, is a data matching exercise designed to help participating bodies detect erroneous and fraudulent payments from the public purse.  Initiated in 1996, it is run biennially.  Participants in the scheme include Local Authorities, Fire Services, Pension Authorities, the NHS, Housing Associations, the Student Loan Company and various Central Government departments.

3.         The initiative works by comparing different sets of data, like payroll and housing benefits records, and flagging unusual combinations such as any person claiming housing benefits while failing to disclose his/her employment.  The organisations taking part receive a report on these potentially unusual matches, which they can then investigate to determine the existence of any fraud or error.

4.         A match does not automatically mean fraud, often, there is a simple explanation for the data match and it allows bodies to update their records.  Even where data matching shows little or no fraud or error, this exercise still provides assurance to bodies about their control arrangements.  It also strengthens the evidence for the Council's Annual Governance Statement. 

5.         Although the Audit Commission is soon to be disbanded, it is understood that the NFI exercise will continue, but be managed by another body.  The NFI 2012/13 exercise is now underway and a summary of the matches received is outlined in the body of this report.   

Relevant Issues and Options

6.         The Council received 5,537 data matches for 2012/13 and these are detailed in table 1 below.

Table 1

Type of Match

No

Received

Blue Badges

227

Concessionary Travel

1,087

Creditors History

2,309

Housing Benefit Claimants

1,620

Payroll

131

Private Residential Care Home

42

Insurance Claimants

115

Residential Parking Permits

6

Total

5,537

 

7.         In order to ensure that resources are targeted in the most efficient and effective way, the data returned identifies those matches where it is recommended that an investigation takes place.  Table 2 below provides a breakdown of the matches, the number that the NFI recommended be investigated as a minimum and the number that have actually been investigated and subsequently closed as at 31st October 2013.

Table 2

Match

Total Matches

Rec to Invest- igate

Total Invest-igated As at 31/10/13

Balance

Closed No Issues

Blue Badges

227

197

225

2

225

Concessionary Travel

1,087

1,087

1,087

0

1,087

Creditors History

2,309

177

200

2,109

200

Housing Benefit Claimant

1,620

244

1,270

350

1,270

Payroll

131

40

85

46

85

Private Residential Care Homes

42

4

42

0

42

Insurance Claimants

115

22

46

69

46

Residential Parking Permits

6

3

0

6

0

Total

5,537

1,774

2,955

2,582

2,955

 

8.         The above table shows the number that have been closed and their category code.  As can be seen, over 50% have been closed with no issue.  With the exception of Residential Parking Permits matches all recommended matches have been investigated.

9.         It should be noted that the investigating officer has the opportunity to input a potential saving that has been made as a result of the match being identified and action taken.  For all the matches closed to date, none have reported any savings.

10.      With regard to Council Tax (CT), this extract will be undertaken in March 2014 as requested by NFI.  For the Council Tax matching exercise undertaken in 2010/11 (data extracted February 2012), the following information is known:

172 matches were received (135 CT to Electoral Register and 37 CT rising 18's).  All matches have been investigated and closed and £54,077 worth of "savings" identified as a result of these matches.

11.      Internal Audit coordinates the Council's NFI activities and it is important that Members note that some of the detailed work described here is carried out by other sections.

Resource Implications (Financial and Employment)

12.      If the recovery action were to be successful in all cases, then £54,077 would be realised.  The cost of participating in NFI is £3,750.

Sustainability and Climate Change Implications

13.      None directly from this report

Legal Implications (to Include Human Rights Implications)

14.      Provision of an adequate and effective Internal Audit function is a legal requirement under the Accounts and Audit (Wales) Regulations 2005 as amended.

Crime and Disorder Implications

15.      Pursuing initiatives to prevent, detect and deter crime is encompassed within the terms of reference under which the audit function operates.

Equal Opportunities Implications (to include Welsh Language issues)

16.      None as a direct consequence of this report.

Corporate/Service Objectives

17.      The work of audit is intended to assist in the achievement of all corporate and service objectives.

Policy Framework and Budget

18.      The proposals in this report are in accordance with the policy framework and budget.

Consultation (including Ward Member Consultation)

19.      No further consultation is proposed.

Relevant Scrutiny Committee

20.      Corporate Resources.

Background Papers

None

 

Contact Officer

Helen Smith - Operational Manager - Audit Tel: 01656 754901

 

Officers Consulted

External Audit Manager - Grant Thornton UK LLP

 

Responsible Officer:

Alan Jenkins - Head of Accountancy & Resource Management

 

 

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