How To Write A Corporate Fraud Plan

Transcription

1 6 AUDIT & GOVERNANCE COMMITTEE Tuesday, 3 March 2015 CORPORATE ANTI-FRAUD BUSINESS PLAN (REP1176) EXECUTIVE SUMMARY The Corporate Anti-Fraud Business Plan details the Council s proposed approach to the prevention, detection and prosecution of fraud and corruption. The plan sets out the desired outcomes and management processes aligned to the Council s strategic objectives to provide value for money by identifying any fraud and error across all the Council s activities. This report is presented to the Audit and Governance Committee in compliance with its terms of reference to Monitor Council policies on...anti-fraud and Corruption. Is the report Open or Exempt? Open Wards Affected: All Cabinet Member: Councillor S Allen Cabinet Member for Housing Councillor M Barnard Cabinet Member for Resources & Welfare Reforms Supporting Officer: Name: Mrs Siobhan Martin Job Title: Head of Internal Audit Telephone Number: address: [email protected] 45

2 1 INTRODUCTION 1.1 The Corporate Fraud teams at both Waveney District Council and Suffolk Coastal District Council are managed by the Head of Internal Audit. The Business Plan attached represents the planned Corporate Anti-Fraud work to take place across the two Councils from 1 April A key responsibility within the Audit and Governance Committee s terms of reference is to Monitor Council policies on Anti-fraud and Corruption. 1.3 A Corporate Anti-Fraud Business Plan is presented to the Audit and Governance Committee on an annual basis. Performance data is also presented to the Committee for consideration on an annual basis. 2 BACKGROUND 2.1 The Council has a zero tolerance approach towards fraud and corruption, and the existence of a professional Corporate Fraud team demonstrates the Council s commitment to this objective. 2.2 The Audit Commission (along with other designated responsibilities, eg Head of Paid Service, Section 151 Officer, Monitoring Officer and Head of Internal Audit) requires local authority services to have in place an affective counter fraud strategy and plan. This report demonstrates that the Council has such a plan in place. Each year the Council s external auditors and Central Government (currently the remaining arm of the Audit Commission) note and comment upon the proactive work undertaken by the Council. 2.3 The Corporate Anti-Fraud Business Plan is a direct contribution to meeting the Council s objectives and a key contributor to enabling the Government s austerity measures in reducing public expenditure by reducing fraud. 3 CHANGES TO BENEFIT FRAUD SINGLE FRAUD INVESTIGATION SERVICE (SFIS) 3.1 Benefit and tax credit fraud and error is estimated to cost 5.3 billion per year (published fraud and error statistics). Benefit fraud investigations are currently carried out by the Department of Works and Pensions (DWP) Fraud Investigation Service and by local authorities; Tax Credit fraud is currently investigated by Her Majesty s Revenue and Customs (HMRC). However, HMRC has few investigators employed to look into Tax Credits, as much of their resource is deployed for higher value tax investigations. Currently the totality of an offence committed is not always considered if a customer is committing fraud across benefits administered by DWP, local authorities and HMRC, as each service conducts their own investigation. These arrangements are now considered inefficient and open to charges of unfairness. 3.2 In response to the highlighted disparities outlined above, Government proposed the creation of a single integrated fraud investigation service with statutory powers to investigate and sanction all benefit and tax credit offences, which will combine relevant resources across local authorities, HMRC, and DWP. This service commenced in October 2014 and all 360+ Council s are affected and the programme of change will continue into The aim is to improve efficiency, ensure all offences are taken into account and increase the number of investigations and sanctions. 3.3 Currently the DWP contributes financial sums to the Council to facilitate fraud prevention and detection directly linked with Housing Benefit fraud. This will cease/diminish as from 1 May Existing Local Authority Fraud Investigators who largely work on Housing Benefit fraud activity based at WDC and SCDC will transfer to the DWP, within a new team called the Single Fraud Investigation Service on 1 May There remains residual Housing Benefit fraud work at the Council since a Single Point of Contact must exists. This is a role which will search, sift, transfer, make court statements 46

3 etc. in relation to Housing Benefit fraud activity since the Council is still the administrator of Housing Benefits, and the DWP do not have direct access to our systems (or those of any other Council at the present time). This role will be within the Corporate Fraud Team and will be reassessed in the future. 3.5 All other Corporate Fraud responsibilities remain with the Council under the strategic direction of the Head of Internal Audit. 4 RESOURCING 4.1 The Corporate Counter Fraud team currently consists of 3.2 full time equivalent professional officers and the SCDC team consists of 2.2 full time equivalent professional officers. Effective and efficient joint working with our partner authorities occurs on a regular basis during complicated and cross border case investigations. 4.2 From 1 May 2015 the Corporate Fraud Team will consist of one full time Corporate Fraud Manager and one full time Corporate Fraud Investigator covering both WDC and SCDC sites involved in preventing, investigating, and prosecuting where applicable corporate fraud activity. 4.3 The Council s Head of Internal Audit leads 3 fraud teams across 3 councils, and offers services to 2 more councils, ie Babergh and Mid Suffolk District Council: Ipswich Borough Council (8 FTE) moving to 2 FTE on 1 May 2015 Suffolk Coastal District Council (2.2 FTE) moving to 2 FTE on 1 May 2015 Waveney District Council (3.2 FTE) 4.4 Working practices and procedures will continue to be aligned across the entire Audit Partnership facilitating more joint learning and working. The Council s Corporate Fraud Manager is a member of the Suffolk wide Fraud Managers Forum and also the Suffolk Tenancy Forum. 5 OTHER RELEVANT DOCUMENTS 5.1 The Corporate Anti-Fraud Business Plan works in conjunction with other fundamental documents, which form the foundations for Corporate Anti-fraud activity across the Council. The key supporting documents can be found on the Council s intranet and are listed as follows: Anti- Bribery Policy and Procedure Anti-Money Laundering Policy Anti-Fraud and Corruption Strategy Whistleblowing Policy 6 FINANCIAL AND GOVERNANCE IMPLICATIONS 6.1 The Corporate Anti-Fraud Business Plan aims to deliver a mechanism to prevent, detect and prosecute fraudulent behaviour and thus provide improved value for money given the finite local government resources available. The work of the Corporate Fraud Team is directly aligned to protecting the public purse has been designed to address the areas of concern identified locally and nationally as described within the Audit Commission publication Protecting the Public Purse

4 7 REASON FOR RECOMMENDATION 7.1 To apprise Members of the planned corporate anti-fraud work to be undertaken at the Council. To ensure Members of the Committee discharge their duties and responsibilities in accordance with the Committee s terms of reference. RECOMMENDATION That the Committee comments on and endorses the Council s Corporate Anti-Fraud Business Plan APPENDICES - Appendix A Corporate Anti-Fraud Business Plan BACKGROUND PAPERS Date Type Available From Oct 2014 Protecting the Public Purse Audit Commission Head of Internal Audit 48

5 Appendix A Corporate Anti-Fraud Business Plan

6 CONTENT 1. Introduction 2. Aims and Objectives 3. Working in Partnership 4. Corporate Fraud Focus 5. Methods 6. Performance Measures 7. Legislation 50

7 1. INTRODUCTION The Financial Year will continue to be a year of further development and enhancement in the field of corporate anti-fraud activity both at Waveney District Council and Suffolk District Council under the partnership arrangements; given the ever changing face of fraud. The Corporate Fraud team will be moving away from focusing largely upon Housing Benefit focused investigation into a more corporate focussed approach aligned to our services fraud risks and the priorities identified by central government. This will involve promotion, training, education, deterrence, prevention, detection and investigation work across the range of the organisation s financial systems, in line with the Governments Fraud, Error and Debt Taskforce Policy and tackling fraud against the Public Sector. In 2013, the National Fraud Authority estimated that fraud cost local government 2.1 billion; tackling it is a priority for local councils and the Government given its scale, severity and deficit impact. Local authorities have a duty to safeguard public funds and take responsible steps to ensure that any public money is used appropriately. If fraud is suspected, authorities actively investigate all allegations. This plan has been produced to document the corporate anti-fraud activities planned, which will be delivered by a small, dedicated, experienced and qualified team. 2. AIMS AND OBJECTIVES Our mission is to provide high quality professional Corporate Fraud services to the Council in preventing and detecting fraud and error within Waveney District Council and our partners and to assist cross border agencies where possible. We will investigate allegations of any corporate nature and will proactively seek out fraudsters, using an intelligence led approach to the prosecution of offenders through the Court System. The Corporate Fraud team will maintain the highest working standards and are committed to treating people equally irrespective of gender, age, race, or sexual orientation in accordance with equality and diversity legislation. In the year ahead, it will be necessary for the team to concentrate upon four distinct areas: 1. Develop the team from what was essentially a benefit fraud investigation role into a wider corporate anti-fraud role. 1. Strengthening the Council s fraud and corruption risk management processes and its corporate governance, through promoting greater awareness of the fraud risk. 2. Adding value to the Council by focussing upon outcomes in the areas listed in section 4 of this plan. 4. Taking further advantage of shared service arrangements to provide technical training at lower cost to councils, particularly corporate fraud, housing fraud, Regulation of Investigatory Powers Acts and fraud awareness training. 3 WORKING IN PARTNERSHIP The Corporate Fraud team will proactively work with all services within the Council to combat the threat of any fraud and will assist with identifying and prosecuting any fraudulent activity. The Corporate Fraud team will liaise with other external bodies including: 51

8 Audit Commission The Department of Work and Pensions HM Revenues and Customs Home Office Housing Associations The Police The UK Border Agency National Fraud Agency Other Local Authorities Serious and Organised Crime Agency Social Housing Landlords Any other Organisation committed to prevention and detection of crime By continuing to work together with these organisations, we are supporting the Government s aims to reduce loss through fraud and error, eliminating duplication and inefficiency. In addition, the Council s Corporate Fraud team will work closer than ever with the associated team within the Audit Services Partnership arrangements. The Council s Head of Internal Audit leads 3 fraud teams across 3 Councils, and offers services to 2 more Councils i.e. Babergh and Mid Suffolk District Council: Ipswich Borough Council (8 FTE) moving to 2 FTE on 1 May 2015 Suffolk Coastal District Council (2.2 FTE) moving to 2 FTE on 1 May 2015 Waveney District Council (3.2 FTE) 4. CORPORATE FRAUD FOCUS The Corporate Fraud team will focus upon the following areas in : Housing Tenancy Fraud Right to Buy Fraud National Fraud Initiative Matches (statutory national exercise) Single Point of Contact for Housing Benefit Fraud data transfer etc. to the DWP (residual work retained by the Council following the transfer of housing benefit fraud work to SFIS) Housing Benefit Matching Service data analysis (a service requested by the Anglia Revenues Partnership) National Non-Domestic Rates Council Tax (Reduction Scheme, second homes etc) Insurance Payroll, pension and expenses Recruitment Blue Badge Scheme (in partnership with Suffolk County Council) Procurement Grants Whistleblowing Any other fraud issue which may emerge 5. METHODS The Corporate Fraud team consists of professional fraud investigators and corporate anti--fraud methods in operation include: 1. Promoting corporate fraud awareness to Council Members, Officers, contractors, and the public to encourage good quality referrals / whistleblowing etc. Raising awareness of fraud and related ethical issues is a key element in the overall counter-fraud strategy, and 52

9 is one of particular importance concerning those officers across all teams who are most likely to encounter fraudulent documentation and claims, whether they be Recruitment Officers, Council Tax Benefit Assessors, Private Grant Assessors, NNDR business rates staff, Housing and Homelessness staff, external Housing Groups and Voluntary Organisations, and so on. 2. Undertake selective proactive corporate anti-fraud drives. 3. With the support of Legal Services, prosecute offenders. 4. Publicise successful court cases and corporate prosecutions and produce an annual report upon outcomes. 5. Publicise housing and tenancy fraud awareness in local papers and local house-to-house magazines and via other mediums where appropriate. 6. Working with other partners e.g. housing associations and undertake joint exercises. 6. PERFORMANCE MEASURES We will measure our success by: Monitoring the quality of corporate fraud referrals (inputs) on a monthly basis Measure the results (outputs) and success rate of corporate investigations on a monthly basis Report regularly to Senior Management on key findings Production of an annual report to the Audit and Governance Committee Providing output results to the Audit Commission and other bodies when required. 7. LEGISLATION Any investigations conducted by this service are governed by legislation, which includes the following (not exhaustive): Police and Criminal Evidence Act 1984 Criminal Procedure and Investigations Act 1996 (C.P.I.A) Data Protection Act 1998 Freedom of Information Act 2000 Human Rights Act 1998 Regulation of Surveillance and the Investigatory Powers Act 2000 (RIPA) Criminal Justice Act 1987/1998 Criminal Justice & Public Order Act 1994 Criminal Law Act 1977 Council Tax legislation 1996 Housing Act 1996 The Social Security Administration Act 1992 The Social Security Administration (Fraud) Act 2001 Fraud Act 2006 Forgery and Counterfeiting Act 1981 Criminal Attempts Act 1981 Schedule 4 of the Welfare Reform Act 2009 (One Strike) Social Security (Loss of Benefit) Amendment Regulations 2010 (One Strike) The Bribery Act 2010 Telecommunication (Lawful Business Practice Interception of Communications) Act 2000 Theft Act 1968 Public Interest Disclosure Act 1998 (Whistleblowing) 53