Agenda item

Counter Fraud, Bribery and Corruption Strategy

To present the report of the Head of Audit and Risk.


The report of the Head of Audit and Risk incorporating the Counter Fraud, Bribery and Corruption Strategy 2021-24 was presented for the Committee’s consideration. The report set out the activity that Internal Audit will carry out in the stated timeframe to minimise the risk of fraud, bribery and corruption occurring within and against the Council.


The Head of Audit and Risk summarised the content and objectives of the strategy highlighting that in the absence of a Wales specific strategy the  “Fighting Fraud and Corruption Locally Strategy for the 2020s” (FFCL) publication endorsed by CIPFA has been used  as a basis for the strategic focus; this is the overarching counter fraud and corruption strategy for local government in England and provides a blueprint for a tougher and more up to date response to fraud and fraud perpetrated against local authorities than that found in CIPFA’s Code of Practice on Managing the Risk of Fraud and Corruption (2014) (the CIPFA Code) which was also considered. Similar to the CIPFA Code, the FFCL strategy focuses on five pillars of activity or strategic objectives; these are outlined within the report and will help set out where the Council needs to concentrate its counter-fraud efforts. The Head of Audit and Risk referred also to the National Fraud Initiative, a two yearly data matching exercise which drives much of the counter fraud work and she confirmed that ongoing work on the first tranche of the NFI 2020/21 matches released in January 2021 has not to date shown up any instances of fraud in respect of the Council’s systems.


Points of discussion by the Committee were as follows –


·                    The recognition of the need to strengthen the Council’s approach to procurement as one of the highest perceived fraud risk areas in 2019/20 with there being no consistent system or approach at present; the absence of a procurement policy and/or strategy to provide standardisation was therefore queried. The Head of Audit and Risk clarified that it is the contract monitoring element of the Council’s procurement arrangements that is not centralised and that the audit which is underway will assess the robustness of the Council’s controls and measures to detect and/or prevent fraud and corruption in this area.

·                    Whether the revenue generated by the last review of Council Tax Single Person Discount claims was the result of identifying fraudulent claims and whether in such cases and cases involving disabled parking concession fraud and grant fraud any prosecutions have followed.  The Head of Audit and Risk in confirming that no prosecutions had occurred in the last few years clarified that the review of SPD claims is a Datatank initiative providing  a data verification service; the review screened 11,200 accounts, targeted 2,245 accounts and identified 484 errors with an error rate of 4.3%.

·                    Whether the increased potential for grant fraud arising from Welsh Government’s Covid-19 grant support schemes had been realised when administering the schemes and whether any lessons had been learnt from the experience thus far. The Head of Audit and Risk advised that because of the need to quickly implement expansive stimulus packages to support individuals and business, Welsh Government’s guidance was that upfront low-friction controls be implemented where possible with the focus being on prompt payment. However, the Finance Service’s grants team which included a member of the Internal Audit staff on secondment did carry out pre-payment checks on all grants, and whilst the NFI’s data matches have not identified any frauds to date further work needs to be done before a definitive conclusion can be reached. The Director of Function (Resources)/ Section 151 Officer advised that as an authority covering a smaller geographical area where many businesses are known, the Council was in a better position to identify business support grant claimants as genuine or not. The bulk of the work in the first tranche of grant distribution involved confirming whether or not businesses occupied premises liable for business rates since many small business are eligible for rate relief or are exempt altogether and then updating the Council’s business rates records accordingly. Having established the details and eligibility subsequent tranches of grant distribution were easier to complete and he was therefore confident that 99% of the grant payments made were correct.

·                    That the Strategy is short on reference to bribery and corruption; recognising that these are potentially more difficult to detect, it was asked whether in the Council’s experience any indications of bribery and/or corruption have arisen in day to day activities. Likewise, the strategy does not make reference to prosecuting the perpetrators of fraud only to committing the right support and appropriate resources for tackling fraud. It was suggested that declaring a commitment to prosecuting fraudsters would be an effective preventative measure. The Head of Audit and Risk advised that the audit of procurement arrangements should uncover any vulnerabilities as regards bribery and corruption; as regards using the threat of prosecution as a deterrent one of the five FFCL pillars on which the strategy is based is that of “Pursue” where it is stated that the Council will always seek the strongest possible sanction against any individual or organisation that defrauds or attempt to defraud the Council. The Director of Function (Resources)/ Section 151 Officer highlighted that the Council’s Financial  Procedure Rules at paragraph provide for reporting any breach of criminal law to the police or appropriate prosecuting authority.


It was resolved to note Internal Audit’s strategy for countering fraud, bribery and corruption for 2021-24.


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