Agenda item

Report by the Chief Internal Auditor

7.1       The Committee considered a report by the Chief Internal Auditor, which presented the refreshed Anti-Fraud and Corruption Strategy and Framework, in line with best practice.  The Internal Audit Manager, Counter Fraud introduced the report which sets outs the approach to counter fraud work. The report refreshes the Strategy to take into account changes in regulations, anti-fraud and money laundering activity, and an emphasis on changes in organisational culture.

7.2       The Committee discussed:

• The role of Culture and how it affects the organisation
• Staff leavers and overpayments
• Whistleblowing Policy and raising issues with outside bodies
• Internal powers of investigation, links to the Police and monitoring of social media in support of investigations 
• Effect of increased homeworking as a result of the Covid-19 pandemic and impacts of fraud
• E-learning and how to follow up to ensure the lessons are implemented

7.3       Officers responded:

• Efforts to establish zero tolerance to fraud, having robust policies and making sure individuals are aware of the policies and their responsibility to report instances of fraud.
• Payroll is a key part of the annual audit, looking at the controls which should pick up the issues of leavers.   The Council also participates in the biannual national fraud initiative which involves payroll matching with other authorities, which allows the authority to pursue overpayments.
• Outside bodies with which a concern could be raised include the External Auditors and Protect (formerly Public Concern at Work).  Other sector specific bodies include Ofsted, the Care Quality Commission and the Health & Safety Executive.   
• A benefit of the Orbis partnership is a team of investigators who work to PACE (Police and Criminal Evidence Act) standards.  Investigations have been shared with the Police for criminal prosecution if it is considered appropriate.  Monitoring of social media is done with appropriate RIPA (Regulation of Investigatory Powers Act) sign off, but is not commonly used as there are other sources of evidence.  To reduce the risk of staff being groomed to participate in a fraud there is considerable fraud awareness and e-learning made available, together with participation in fraud awareness week in November each year.  Greater integration with banks in assisting staff to avoid fraud in their personal lives was suggested.
• A Fraud risk assessment was used to log changes in operational procedures resulting from the pandemic on the risk register, and risks were shared with the Finance team.  The log also records changes to business controls as a result of increased homeworking.  The Service works on changes to processes and workarounds by way of advice and challenge to Teams, which have been logged to assist with a return to ‘Business As Usual’ working. Such changes may provide more efficient solutions, but should be reviewed to ensure they are capable of being sustained as a lasting solution.   Any changes will undergo a process of assurance.  The Audit Plan for 2020/21 is being reviewed to ensure it covers the changes to working practices and the potential increased risk of fraud as a result of the pandemic.
• E-learning and maturity of the organisation in terms of fraud awareness is measured by use of periodic online fraud surveys.  The Orbis structure allows comparisons and benchmarking with other organisations to be done.  Fraud risk workshops are held with specific teams, to support the e-learning.  Councillors can find details of the anti-fraud resources available on the Council’s intranet pages.

7.4       The Committee RESOLVED to endorse the updated Anti-Fraud and Corruption Strategy and Framework.