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Agenda Item No. 9

 

The Vale of Glamorgan Council

 

Audit Committee: 21st November 2016

 

Report of the Head of Finance / Section 151 Officer

 

National Fraud Initiative

 

Purpose of the Report

  1. To present to Members for review and consideration a status report on the progress made to date on the National Fraud Initiative.

Recommendation

  1. That Members give due consideration to the NFI update report

Reason for the Recommendation

  1. To keep the Audit Committee informed

Background

  1. The National Fraud Initiative (NFI) is a data matching exercise that helps to detect and prevent fraud and overpayments across the UK. Forty-three Welsh public sector bodies take part in the exercise, including local authorities, NHS bodies, police authorities, fire authorities, and Welsh Government. Public Audit (Wales) Act 2004 gives the Auditor General for Wales the power to request data from organisations and undertake the data matching exercises.
  2. The NFI has been run every 2 years since 1996, and to date, has been used to identify fraud and overpayments totalling over £30 million in Wales. The 2014-15 NFI resulted in the detection and prevention of overpayments worth £4.4 million.
  3. Since the abolition of the Audit Commission in March 2015, the NFI has become part of the Cabinet Office, but is coordinated in Wales by the Wales Audit Office in collaboration with equivalent bodies in England, Scotland and Northern Ireland.
  4. Participating organisations submit data to the NFI where it is matched against other data sets using specific criteria. The submitted information is wide ranging and includes data sets relating to housing benefits, council tax, payroll, creditors, licensing, disabled blue badges, concessionary travel, insurance claims, care homes and personal budgets.
  5. Reports containing potential matches are then released to each organisation to investigate. It is important to note that where a match is found, it is not in itself evidence of a fraud and may be an error or an inconsistency that requires further investigation. Historically, the NFI exercise has been conducted biennially although the Council Tax matching (run separately), has recently been changed to an annual process.
  6. Data was submitted by the Council in October 2014 with the results being released in January 2015. Council Tax data is submitted separately and annually with matches often being released the same day. The last Council Tax matches were released in December 2015.
  7. For the 2016-17 exercise, data sets were extracted, checked and uploaded to the NFI secure website during October 2016 with the results expected to be released in January 2017. The Council Tax data will be submitted in December 2016 with the results being released the same day.
  8. Internal Audit acts as the Key Contact and provides access to the reports on the NFI website to the relevant Council departments who are asked to investigate the matches and update the NFI website accordingly.

Relevant Issues and Options

  1. The NFI data matching exercise is an ongoing one, and the data represents the status as at a specific point in time. For departments with matches that remain open, the NFI website is continually being updated either on an individual match basis or on a whole report basis where work has been undertaken offline.
  2. Committee Members were provided with an update report in November 2015 of the progress made by departments of the results that were release in January 2015. The following table provides a further update of those results and the progress made so far by departments against each report group and the types of resolutions being achieved. The exception is Council Tax matches, which relate to the latest Council Tax matches released in December 2015.
  3. In some reports certain matches will be highlighted as being stronger and the NFI recommend these are given priority. However, the NFI advise that each organisation prioritises the order in which matches are investigated depending on the resources available.

TABLE ONE

Report Group

Total Matches

Total Recommended Matches

Processed

% of Recommended Matches Processed

% of Total Matches Processed

Outcomes / Example Resolution

Blue Badge Parking Permit

324

299

324

100%

100%

All matches reviewed.

Example resolution: Pass cancelled and system updated.

Concessionary Travel Pass

921

921

921

100%

100%

All matches reviewed.

Example resolution: Pass cancelled and system updated.

Council Tax

601

601

601

100%

100%

All matches reviewed.

Outcomes:

22 discounts amended to a disregard (e.g. students).

107 discounts cancelled and amended bills sent.

Total value of recovery is £42,249.75

Creditors

2026

121

129

100%

6.36%

All recommended matches within key reports complete.

Example resolution: Investigate matches to establish if they are duplicate payments. Recovery of payments can be initiated where necessary.

Housing (Tenants & Right to Buy)

57

11

11

100%

19.30%

Ongoing.

Example resolution: Confirm data and instigate investigation if required. Reclaim all or part of the discount originally awarded.

Housing Benefit Claimants

1,304

341

271

79.47%

20.88%

Ongoing.

Overpayments totalling £2,747.31 being recovered so far.

Example resolution: removal or amendment of benefit.

Payroll

33

1

33

100%

100%

All matches reviewed.

Example resolution: check data is correct and confirm hours/contracts with other organisation. Amend data held if incorrect.

Payroll to Creditors

81

42

42

100%

51.85%

All recommended matches complete.

Example resolution: Introduction of declarations of interest procedures into a department.

Personal Budgets

41

2

38

100%

92.68%

All recommended matches complete.

Example resolution: Amend or cancel payments.

Private Residential Care Homes

24

7

24

100%

100.00%

All matches reviewed.

Example resolution: Confirm dates when payments should have ended. Reclaim payments if required.

Resident Parking Permit

3

2

2

100%

66.67%

2 permits have expired. 1 being investigated.

Example resolution: End a permit on internal system.

Taxi Drivers

2

N/A

2

N/A

100%

All matches reviewed.

Example resolution: Confirm immigration status and right to work. Revoke licence if necessary.

TOTAL

6,891

2348

3,865

97.01%

56.01%

 
             
  1. Council Tax Matches

Of the matches generated, an initial review identified 205 cases where further information was needed. Letters were sent to confirm eligibility for discount and in 107 cases the discount has subsequently been cancelled. This has resulted in a recoverable amount of £42,249.75 being identified and action is being taken to reclaim this money.

  1. Creditors

There are usually a large number of matches generated for creditors. This is due to difficulty in distinguishing between duplicate payments and regular payments with the limited information used for matching. As mentioned in paragraph 12, the NFI recommend that matches are prioritised based upon local knowledge of systems, working practices and available resources. As a one off exercise in late 2015/16 Internal Audit undertook a review of a number of the recommended Creditors matches as part of the Creditors audit and no issues were identified.

Resource Implications (Financial and Employment)

  1. None as a direct consequence of this report. However, there are resource implications involved in preparation and submission of data and working through the resultant matches. Any resource implications are met within current budgets. In return savings may be identified or money may be recovered

Sustainability and Climate Change Implications

  1. None directly from this report.

Legal Implications (to Include Human Rights Implications)

  1. Public Audit (Wales) Act 2004: Provides the Auditor General for Wales the power to undertake the data matching exercises.

Data Protection Act 1998: There is a requirement under the Act to ensure data quality and to securely store and transmit data.

Crime and Disorder Implications

  1. None as a direct consequence of this report.

Equal Opportunities Implications (to include Welsh Language issues)

  1. None as a direct consequence of this report.

Corporate/Service Objectives

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

Policy Framework and Budget

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

Consultation (including Ward Member Consultation)

  1. No further consultation is proposed.

Relevant Scrutiny Committee

  1. Corporate Performance and Resources.

Background Papers

None.

Contact Officer

Helen Smith - Operational Manager - Audit Tel: 01656 754901

Officers Consulted

N/A

Responsible Officer:

Carys Lord - Head of Finance and Section 151 Officer