2. ARSB - IA Progress and Performance Jan 2025
Renfrewshire Council · 20 January 2025
Back to Audit, Risk and Scrutiny Board — 20 January 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
___________________________________________________________________ To: Audit, Risk and Scrutiny Board On: 20 January 2025 ___________________________________________________________________ Report by: Chief Auditor ___________________________________________________________________ Heading: Internal Audit and Counter Fraud Progress and Performance for Period to 31 December 2024 ___________________________________________________________________ 1. Summary 1.1 The Internal Audit Annual Plan was approved by the Audit, Risk and Scrutiny Board on 18 March 2024. Internal Audit measures the progress and performance of the team on a regular basis using a range of performance indicators. This report monitors progress from 1 April 2024 to 31 December 2024, in terms of the delivery of the Audit Plan for the year and compares actual performance against targets set by the Director of Finance and Resources. 1.2 In terms of Counter Fraud, no formal performance targets for fraud investigation have been established for the following reasons. A major part of their work involves being the single point of contact (SPOC) for the Department for Work and Pension’s (DWP) Single Fraud Investigation Service and the Service Level Agreement for this work contains time targets for completing this work. The types of fraud referrals received to date are wide ranging and the team’s objective is to concentrate on investigating those referrals considered to contain the greatest fraud risk. They are also involved in promoting fraud awareness and assisting with the implementation of adequate fraud prevention measures within the Council. 1.3 All of the Internal Audit Team and Counter Fraud Team are currently working on a hybrid basis and also undertake home/site visits when the need arises. We also provide advice and support where necessary to council services.
Page 2
1.4 The report details progress against local and national initiatives involving Internal Audit and the Counter Fraud Team from 1 April 2024 to 31 December 2024. ___________________________________________________________________ 2. Recommendations 2.1 Members are invited to note the Internal Audit and Counter Fraud Team progress and performance to 31 December 2024. _________________________________________________________ 3. Background 3.1 The progress and performance of the Internal Audit Team is subject to regular monitoring using a number of performance measures. The Director of Finance and Resources has set annual targets for the team to demonstrate continuous improvement. In terms of the Counter Fraud team, there are time targets in place for responding to requests from the DWP’s Single Fraud Investigation Service. Due to the diverse nature of fraud referrals no formal performance targets have been established and the outcomes from investigations is regularly monitored by management. 3.2 Internal Audit and the Counter Fraud Team support a variety of local and national initiatives through participation in professional practitioner groups and co-ordination of national initiatives such as the National Fraud Initiative. 3.3 This report measures the progress and performance of both the Internal Audit and Counter Fraud Team for the period from 1 April 2024 to 31 December 2024. 4. Internal Audit Team Performance (a) Percentage of audit plan completed as at 31 December 2024 This measures the degree to which the Audit Plan has been completed. Actual 2023/24 Annual Target 2024/25 Audit Plan Completion Target to 31 December 2024 Audit Plan Completion Actual to 31 December 2024 92.0% 90.0% 66% 71.2% Actual performance is ahead of target.
Page 3
(b) Percentage of assignments complete by target date This measures the degree with which target dates for audit work have been met. Target 2024/25 Actual to 31 December 2024 95.0% 100% Actual performance is ahead of the target set for the year. (c) Percentage of audit assignments completed within time budget This measures how well the time budget for individual assignments has been adhered to. Target 2024/25 Actual to 31 December 2024 95.0% 100% Actual performance is ahead of the target set for the year, although this may reduce over the remainder of the year. (d) Percentage of audit reports issued within 6 weeks of completion of audit field work This measures how quickly draft audit reports are issued after the audit fieldwork has been completed. Target 2024/25 Actual to 31 December 2024 95.0% 97.3% Actual performance is ahead of the target set for the year, although this is likely to reduce over the remainder of the year. 5. Review of the 2024/25 Internal Audit Plan 5.1 Our 2024/25 Audit Plan is subject to ongoing review in light of any organisational risks arising, and also to determine whether any assignments will have to be amended or cancelled as result of us being unable, for any reason, to undertake the work planned. At this stage we are not recommending any further amendments to the plan. 5.2 However, some of the assignments have taken longer than anticipated and some of the next quarter’s assignments commencement dates are likely to be delayed as the team have been involved in a number of audit investigations which are given priority. Each investigation will be reported to the Board as soon as any disciplinary proceedings have been concluded. These investigations have also resulted in most of our contingency budget being utilised. 5.3 In addition, the team is also carrying a vacancy since the retiral of the Chief Auditor in June and the Assistant Chief Auditor is covering this post. A vacancy factor was built into the Plan but the majority of this
Page 4
time has now been utilised. One of the Senior Auditors has just been appointed to cover the Asst. Chief Auditors role on a temporary basis. 5.4 Discussions are still ongoing with the Chief Financial Officers (Section 95 Officers) of Inverclyde Council and West Dunbartonshire Council to consider the resilience risks facing Internal Audit and Counter Fraud Teams and to explore possible options which would address the resilience issues all three councils are facing. As all the teams work differently, this is taking some time to collate the information required. This work should be concluded, early in 2025 and a report detailing the outcomes of this work and any recommended action will be considered at a future Finance, Resources and Customer Services Policy Board. 5.5 It should be noted that the delivery of financial savings is not an objective of this exercise, and each Chief Financial Officer is committed to maintaining the current level of resource. 5.6 As the team’s main focus is on completing assignments, it should be noted that we are forecasting at this stage that there will be some underspend in areas of non-operational time. However, the Audit Plan progress will be closely monitored over the next period and any changes required to the Internal Audit Plan will be brought to this Board for approval. 5.7 In January 2025, we will be commencing our annual planning process and consulting with all the Council’s Senior Management Teams to enable us to prepare our 2025/26 Internal Audit Plan. 6 Counter Fraud Team Progress and Performance 6.1 In line with the Service Level Agreement, the Counter Fraud Team act as the Single Point of Contact (SPOC) to route potential housing benefit fraud referrals to the DWP, liaise with the Council’s Housing Benefit Team and DWP Fraud Officers and retrieve the necessary evidence for the DWP Fraud Officers from the Housing Benefit System. Where a suspicion of fraud arises, the team investigate and report their findings to management. Where appropriate, follow-on action is taken, such as reporting the matter to Police Scotland for further investigation, or directly to the Procurator Fiscal. In addition, they also work jointly with DWP Fraud Officers on criminal fraud investigations which focuses on the investigation and prosecution of the Local Authority administered Council Tax Reduction Scheme and Social Security benefit fraud. In addition to investigation work the team also undertake fraud prevention work. 6.2 During this quarter, we have mainly been working on various fraud referrals received which we have determined to be suitable for further investigation and we are continuing to validate any bank account or remittance contact changes received from the Council’s suppliers and contractors. However, we do have a long-term absence within the team and this is resulting in a slight delay in investigations being completed.
Page 5
6.3 The financial and non-financial results for the period (April 2024 to December 2024) are noted in the table below. Financial Outcomes Period to 31 December 2024 (£) Cash savings directly attributable to preventative counter fraud intervention 2,720 Cash recoveries in progress directly attributable to counter fraud investigations 59,037 Notional savings identified through counter fraud investigation, (e.g. housing tenancy and future council tax) 360,907 Housing Benefit Savings Attributable to Joint Working by Counter Fraud and DWP Counter Fraud Officers 46,520 Other DWP Benefit or Tax Credit Savings identified through other Counter Fraud work or through joint working with DWP 63,385 Non-Financial Outcomes Period to 31 December 2024 Housing properties recovered 4 Housing applications amended/cancelled 52 Housing Allocation Priority Changed 0 Blue badge misuse warning letters issued 25 Blue Badges Cancelled 2 Supplier/Contractor Checks Undertaken 155 6.4 Our notional savings are based on the methodology prepared by the Cabinet Office. 7. Local and National Initiatives Scottish Local Authorities Chief Internal Auditors Group 7.1 The Local Authorities Chief Internal Auditors Group met 3 times during this quarter. The primary focus of these meetings was to submit a joint response to CIPFA on the following two consultation documents :- a) Application Note- Global Internal Audit Standards in the UK Public Sector b) Code of Practice for the Governance of Internal Audit in Local Government 7.2 Both these documents have now just been formally issued and the intention is that they should be implemented from 1 April 2025. CIPFA have stated that they expect any required changes to working practices to be implemented throughout 2025/26 in stages.
Page 6
7.3 A review will be undertaken in the next quarter to assess what amendments are required to our current internal audit processes to enable us to fully conform to the new Global Internal Standards and these associated documents. A report detailing the recommended actions required will be brought to this Board. Scottish Local Authorities Investigation Sub-Group 7.4 The Local Authorities Investigation Sub-Group also met in December and we received a very useful presentation regarding a major council tax fraud by an employee which occurred at another local authority. National Fraud Initiative 7.5 All of the required data sets to date have been submitted on time to the Cabinet Office and in late December 2024 we have received some of the data matches. Work will commence on these matches by Counter Fraud Staff and Service Staff in January 2025. Implications of the Report 1. Financial - The Council has in place arrangements to recover the any overpayments identified from the work of the Counter Fraud Team and the National Fraud Initiative. 2. HR & Organisational Development - None 3. Community Planning – Safer and Stronger - effective internal audit is an important element of good corporate governance. 4. Legal - None 5. Property/Assets - None 6. Information Technology - None 7. Equality & Human Rights - None 8. Health & Safety – None 9. Procurement - None 10. Risk - The progress and performance reported relates to the delivery of the risk-based internal audit plan and the mitigation of the risk of fraud and error. 11. Privacy Impact – None
Page 7
12. COSLA Implications – None 13. Climate Risk – None 14. Children’s Rights - None ________________________________________________________________ Author: Karen Campbell – 07768354651