Agenda item

·        To present the report of External Audit.

·        To present the report of the Head of Audit and Risk with regard to addressing the recommendations of Audit Wales in relation to countering fraud.

·         A letter by Audit Wales’ Engagement Director dated 19 March, 2020 to the Chief Executive in relation to counter-fraud arrangements was presented for the Committee’s consideration.

Mr Jeremy Evans set out the context to the letter which was a high-level review of counter-fraud arrangements across 40 organisations in Wales including all 22 local authorities. The purpose of the review was to establish whether the arrangements for preventing and detecting fraud in the Welsh public sector are effective. The local fieldwork at Isle of Anglesey County Council comprised a high level evaluation of the Council’s counter-fraud arrangements based on a document review, a self-assessment completed by the Council and some interviews with relevant officers. The Audit Engagement Director wrote to the Chief Executive to set out some of the review’s key findings more formally as opportunities to strengthen the Council’s counter- fraud arrangements had been identified although the limitations on the Council’s resources were also acknowledged. It was felt that the Council would benefit from the following –

·         updating the relevant policies and plans including the anti-fraud and corruption policy and fraud response plan; 

·         promoting a good anti-fraud culture and building fraud awareness amongst staff;

·         undertaking a comprehensive fraud risk assessment;

·         to consider fraud risk as part of the overall risk management process;

·         developing an annual programme  of proactive counter-fraud work covering the risks in the risk assessment;

·         clear communication of the structure, roles and responsibilities in relation to counter-fraud to ensure lines of accountability are understood by all;

·         to consider introducing a corporate case management system;

·         to consider regular use of data analysis to validate data;

·         to consider ways to provide an appropriate level of fraud related information to the Governance and Audit Committee for it to take a proactive role in counter fraud matters.

·         The report of the Head of Audit and Risk setting out the Council’s response to the letter by Audit Wales’ Engagement Director was presented for the Committee’s information.

The Head of Audit and Risk in confirming that an action plan to address the recommendations has been developed and is set out at Appendix 1 to the report clarified that the Audit Wales’ letter was received at the onset of the Covid 19 pandemic following which all non-essential work was postponed and Internal Audit staff were redeployed within the Council. However the Counter Fraud, Bribery and Corruption Strategy was presented to and approved by the Committee at its December, 2021 meeting and covers all the matters raised by Audit Wales excepting the procurement of a case management system which it was deemed is not relevant to Anglesey because of the very small number of fraud cases arising (one to two cases per year) which do not justify the outlay and would not represent value for money. Also, the policy for the Prevention of Fraud and Corruption forms part of the Constitution and as such is revised annually as part of the regular review of the Constitution. Four of the ten recommendations have been implemented and the remaining five will be completed during the year; progress will be reported in the end of year annual report.

Although it recognised that the Covid-19 pandemic had disrupted normal business, the Committee queried the 3 year delay from the receipt of the letter to implementing the recommendations. The Committee further questioned whether the introduction of working from home arrangements for the majority of staff had increased the risk and opportunity for fraud citing the significant amount of money lost by Central Government due to fraudulently claimed Covid support funds.

The Head of Audit and Risk advised that a member of Internal Audit staff was seconded to the Finance Service’s grants team which dealt with and distributed business support grants during the pandemic thereby providing an element of assurance and increasing the capacity for detecting fraud. All post payment assurance checks to date have not identified any instances of fraud. Dealing with the pandemic also meant that resources and efforts had to be prioritised and the issues raised within the letter by Audit Wales were not considered as such at the time.

It was resolved to note the issues raised by Audit Wales along with the progress made in addressing the recommendations made by Audit Wales in relation to countering fraud.